Vietnamese fashion brands battle against foreign companies

For many years, Vietnamese fashion brands have had to struggle against Chinese imports. 

Nowadays, they have to compete fiercely with Thai brands in the market segment for average income earners and luxury brands from Europe, the US, Japan and the Republic of Korea.

About 200 foreign fashion brands are present in Vietnam, holding 60% of the domestic market share. 

The bestsellers are mid-tier ones such as Giordano and Bossini and high-end ones bearing CK, Mango and D&G brands.

Experts noted that the Vietnamese market with over 90 million people and an average annual growth rate of 15-20% is a “fertile land” for foreign businesses.

Analysts noted that many Vietnamese brands have scaled down their operation in recent years because of an unsatisfactory business performance.
Foci, a brand of Nguyen Tam Fashion Company, had as of 2007 opened 60 fashion brands throughout the country, eight years after it debuted in 1999. However, the number of Foci’s shops have reduced gradually in the last three years. 

Sources said Ngo Thi Bau, the owner of Foci brand, does not “like” fashion anymore, and wants to develop restaurant chains.

Ninomaxx, a well-known fashion brand for youth, has cut the number of shops from 200 to 50. The closing of a series of Ninomaxx shops in 2013 triggered the rumor that the company was about to go bankrupt.

Even high-end fashion brands, which were seen as immune to the effects of recession, have also reported a slowdown in sales.

Nguyen Thi Dien, general director of An Phuoc Company, admitted that there were many shops with very low sales, but An Phuoc still must maintain them to polish the image of the brand. 

Experts noted that despite great efforts made, Vietnamese businesses still find it difficult to compete with foreign brands. Canifa, a brand of Hoang Duong Trade & Service Company, is an example.

Canifa turned up in the domestic market in 1997 as a brand of wool-made products for domestic consumption and export. 

The brand made a breakthrough in 2014 when it launched many products into the market with diverse designs. Canifa’s products have become a favorite in the domestic market.

However, Canifa, starting as a wool product maker, cannot develop strongly because its products can be sold only in autumn and winter, while Canifa shops are deserted in summer.

A branding expert noted that if Canifa or any other Vietnamese business focuses only on making seasonal products, its production costs will be high, and they will not be able to compete with other rivals, especially foreign brands.