Underwear industry boosts the bottom line in Vietnam

They haven’t made a lot of money yet, but the momentum is shifting from a market once dominated by foreign brand names to one in which Vietnamese domestic companies are taking the lead.

The market has venture investors seeing 50 shades of green with its multi-billion plus market potential per year in terms of revenue, a spokesperson for a leading clothing producer in HCM City recently said.

“Just do the math the—with a population of 90 million, if one person bought six products per year, and each sold for VND100,000, the  revenue could potentially hit VND36,000 billion annually.”

At BigC discount stores, Vietnamese men’s underwear has been selling at prices ranging VND50,000-300,000 each while women’s bras have been varying from VND125,000-300,000.

Vietnamese made products have been value priced, selling at roughly half that of foreign brands and sales have been steadily on the uptick, a store manager at BigC in district 10 of HCM City has reported.

“I feel more positive about this market,” the manager said, adding that previously we found it hard to sell foreign brands of women’s bras with much higher prices, but with the competitive pricing of Vietnamese trendy underwear, sales have been red hot.

The Co.op mart in HCM City in turn has reported sales are busting out all over as the store has increased its floor inventory from one to three shelves with Vietnamese items now taking up 30% of floor space.

“Four years ago, most underwear and lingerie items we sold were from China as there were only a handful of Vietnamese products on the market,” said Hoa, a trader at the Ba Chieu market in Binh Thanh district.

However, over the past two years, the number of domestic products has multiplied substantially, Hoa added and they now account for over 20% of my business with the balance primarily from China.

Two years ago the An Phuoc Garment, Embroidery & Shoes Co. Ltd expanded and opened a factory in Nha Trang and it now has 83 An Phuoc-Pierre Cardin stores and nine Bonjour stores nationwide, with plans to open a dozen more

It’s very difficult to scale up a business and meet the capital requirements for facilities and inventory as the company is strapped for cash, a company representative said –  but the demand is there if we can muster the funds needed.

General Director of Son Viet Garment Joint Stock Company Ha Xuan Anh said in the recent four-five years, sales of Made-in-Vietnam underwear and lingerie have been thriving, particularly with middle-class shoppers.

On the real low end, Chinese products still dominate the market Anh said. 

For underwear, there are now three-four Vietnamese brands that are most favoured by men. “Our products account for 30% of the Vietnam market, and they are also exported to Thailand, Myanmar and Singapore.

“Each month the company produces in excess of 400,000 items,” Anh noted.

Anh said this year, the company targets to raise its revenue by 150% that of last year and introduce a new collection of designs and products for children and pregnant women.  

There is an old saying in the industry that the best way to assess the state of the economy is to look at underwear sales—and by that measure the temperature of the Vietnam’s economic well-being looks pretty good.