The 'battle' for market share in the domestic fashion industry.

Báo Quảng Ninh•23/07/2023

Considered a "lucrative market," Vietnam has attracted a continuous influx of foreign fashion brands. This has created fierce competition for market share among domestic businesses.

Production workers at a factory belonging to Garment Corporation No. 10.

Foreign brands are flooding the market.

Over the years, the number of foreign fashion brands entering the Vietnamese market has steadily increased. According to statistics, there are currently more than 200 foreign fashion brands, ranging from mid-range to high-end, such as Chanel, Giovanni, Mango, Zara, H&M, Uniqlo, Warehouse, Topshop, CK, Nike, Levi's, etc., that have entered the Vietnamese market and are continuously expanding their retail networks.

In the first few months of 2023, Uniqlo continuously opened new stores in many locations. Thus, after only 4 years in Vietnam, this Japanese brand has reached the milestone of 19 retail stores in Vietnam.

H&M, which launched its first store in Vietnam in 2017, now has a presence in 5 provinces and cities across the country with 12 stores. Recently, the brand officially launched its online store, hm.com, in the Vietnamese market with a diverse range of products for all customer segments.

At the end of 2022, the South Korean youth clothing brand MLB opened three large stores in Ho Chi Minh City and Da Nang. Currently, the brand has 18 stores nationwide. Global corporations have the advantage of well-known brands. Therefore, upon entering the Vietnamese market, they quickly reach the younger generation – a customer group highly interested in fashion, constantly changing styles, and fast-paced designs.

Even AEON Group (Japan), considered an "outsider" to the garment industry, recently launched My Closet – an affordable fast-fashion brand. This demonstrates the "attractiveness" of the Vietnamese market.

According to Statista, the Vietnamese apparel market is projected to reach US$7.33 billion by 2025 and has significant room for growth.

The market has great potential.

Amidst export difficulties, exploiting the domestic market with its purchasing power of 100 million people is the foundation that helps textile and garment businesses maintain production and operations. To avoid dependence on export orders, many textile and garment businesses have focused more on capturing market share domestically. However, even on their "home turf," Vietnamese textile and garment businesses are facing fierce competition from foreign fashion brands.

Recently, several leading domestic fashion manufacturers, such as May 10, Duc Giang, Viet Tien, Nha Be, and Viet Thang, have focused on researching and launching diverse product lines in terms of design and style, and promoting their brands to conquer the market. Notably, May 10 Corporation, to exploit the domestic market, has focused primarily on office wear; developed high-end fashion lines for women and men's fashion for young people; and expanded its retail chain both online and offline.

According to Mr. Than Duc Viet, General Director of May 10 Corporation, the company proudly boasts 100% of its products designed and manufactured in Vietnam; and has a market research team that continuously updates on fashion trends and new technologies in the fashion industry. In the domestic retail fashion sector alone, May 10 currently has more than 20 brands such as May10 Expert, May10 Classic, Eternity GrusZ, Cleopatra… with 60 stores and fashion centers and over 200 dealers nationwide.

Besides offering high-quality products with diverse designs, types, and prices that are popular with consumers, the company is also chosen by many businesses and organizations as a supplier of office uniforms, such as Vietinbank , An Binh Bank (ABBank), the State Treasury, etc.

Not only May 10 or Duc Giang, but other textile and garment businesses such as Viet Tien Garment Corporation, Nha Be, Viet Thang, etc., are also constantly investing in improving designs and expanding their distribution chains to increase market share, enhance business efficiency, and bring products directly to consumers.

Mr. Cao Huu Hieu, General Director of Vietnam Textile and Garment Group (Vinatex), observed that businesses are currently in a favorable position to focus on the domestic market. While 10 years ago, Vietnamese consumers preferred ready-made clothing from foreign countries due to their lower prices, many consumers are now shifting towards Vietnamese-made garments seeking higher quality products.

Seizing this opportunity, fashion brands from major domestic companies have developed specific business strategies to exploit the promising domestic market. To win over domestic consumers, Vinatex plans to expand its fashion retail stores and centers in several other provinces and cities across the country, gradually establishing itself as one of the leading trusted destinations for Vietnamese consumers seeking domestically produced products.

Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Garment Association (Vitas), noted that the domestic market, worth nearly $5 billion, is being targeted by domestic businesses through changes and the application of various methods in product design and brand promotion to conquer the market. The Association will continue to work closely with businesses, coordinating with international organizations to implement support programs for businesses in management, green transformation, new technologies, brand building, and trade promotion... in order to boost production and market development.

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