Vietnam’s fashion brands lose ground in home market

The Zara shop at Vincom Center in HCM City, for example, is crowded with office workers during lunchtime, international travelers and even customers from Hanoi. 

All of them queue in front of fitting room and checkout counter and wait for their turn. Trang, a customer from Hanoi, said she planned to buy many products, not only for her, but for her friends and relatives as well.

Zara and many other well-known fashion brands such as Mango, GAP and Topshop have opened in Vietnam and expanded their networks.

Meanwhile, shops distributing Vietnamese fashion products are not as busy. 

A fashion shop on Hai Ba Trung street in district 3, HCM City, could not attract many visitors, though it was running a sale promotion program. A saleswoman said unlike previously, customers only buy some items.

Nhung, a private fashion product trader, commented that there are two groups of customers. First, young customers with high income tend to choose international brands. The customers order products on foreign websites or buy products when they travel abroad.

For example, they will try to buy Zara’s products in Spain, H&M products in Germany and GAP products in the US.

“In general, they have to pay VND500,000-2 million for every product, including the shipping fee,” Nhung said.

Meanwhile, people with limited income choose domestic brands.

Private traders, who distribute branded products which are carried to Vietnam by individual travelers (the products are not subject to tax), said their business still has been going smoothly though brands have opened their shops in Vietnam.

According to Nhung, the models offered by fashion brands are very diverse and not all models are available at shops in Vietnam. This means that customers still have to order the models they want with private traders. 

Sean T.Ngo, director of VF Franchise Consulting, noted that most international fashion brands enter Vietnam through franchises.

Sources said H&M has fulfilled necessary procedures to open in 2017. Meanwhile, Uniqlo from Japan is looking for Vietnamese partners for a franchise contract.

Competing with well-known brands such as Zara, Uniqlo, H&M and Forever 21 will continue to be difficult. 

The common characteristic of the brands is that they offer products for both women and men, teenagers and children. They also set up large retail premises of thousands of square meters.