| Textile and garment exports accelerate on the billion-dollar race. Textile and garment businesses resume production immediately after the Lunar New Year. |
In 2023, due to difficulties in export orders, many Vietnamese businesses sought to invest and develop further in the domestic market.
For example, last year Duc Giang Corporation - JSC launched the HERADG collection, using environmentally friendly natural fibers such as silk, poplin, recycled fabric, etc. Along with a series of other fashion brands such as S.PEARL, Paul Downer, DGC, Forever Young, Duc Giang Garment's fashion products are increasingly gaining a foothold in the market.
Similarly, with May 10 Corporation - JSC, the company's office wear products are becoming increasingly well-known to consumers. Confident in the competitiveness of May 10's products in the market, Mr. Hoang The Nhu, Deputy General Director of May 10, stated: May 10 focuses on product quality and aesthetics by investing in its design team. Currently, May 10 has a network of more than 10 creative designers who have received very thorough training, and then invests in controlling input materials to suit the Vietnamese market.
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| Domestic textile and garment market: A tough nut to crack. Photo by Thu Huong |
In addition, May 10 implements solutions to improve pre-sales, during-sales, and post-sales services, enhancing customer experience through digital technology . When searching for products, customers can experience them through a 3D application before choosing styles, colors, etc., before making a decision. “ During the product usage process, customers can provide quick feedback and updates, and that is how May 10 builds trust and credibility for the business, ” said Mr. Hoang The Nhu.
Despite systematic and strategic investment, developing the domestic market remains challenging for local textile and garment businesses. The small market size and fierce competition from foreign brands are major contributing factors.
Mr. Le Tien Truong, Chairman of the Vietnam Textile and Garment Group, once shared that the size of Vietnam's domestic textile and garment market is only around 5 billion USD - a figure far too small compared to the production capacity of businesses in the industry.
Furthermore, many domestic and foreign fashion brands have been using various technology platforms for distribution in Vietnam, making the competition increasingly fierce in the domestic market. Over 200 foreign fashion brands such as Giovanni, Mango, Zara, H&M, Uniqlo, Warehouse, Topshop, CK, Nike, and Levi's have entered the Vietnamese market and are planning to expand their stores.
2023 also saw the expansion of several major brands' stores in Vietnam, most notably Uniqlo. Currently, with 8 factories and 240,000 workers producing Uniqlo products in Vietnam, Uniqlo products made in Vietnam supply 2,400 Uniqlo stores worldwide. In addition, despite the less-than-optimistic economic outlook, Uniqlo opened 7 new stores in 2023, bringing the total number of its stores in Vietnam to 22.
According to Osamu Ikezoe, General Manager of Uniqlo in Vietnam: "In three years of development, with both physical and online stores, we have achieved our goal of penetrating and expanding in the Vietnamese market. This achievement is a driving force for the expansion of new stores in the near future to meet the strong demand of customers."
In addition, H&M currently has a presence in the five largest cities and provinces of Vietnam with more than 12 stores. Last year, the brand focused on investing further in its online store. At the end of 2022, MLB, a youth-oriented brand from South Korea, opened three large stores in Ho Chi Minh City and Da Nang. Currently, the brand has opened 18 stores nationwide.
Foreign fashion brands have advantages over domestic companies in terms of long-established brand names, capital, human resources, technology, and market experience. The preference for foreign goods among a significant portion of Vietnamese consumers is also a favorable factor for foreign brands.
Besides competing with foreign fashion brands, according to Mr. Hoang Ve Dung - Chairman of the Board of Directors of Duc Giang Corporation - JSC, the difficulties in developing the domestic textile and garment market also lie in design, raw materials, and sales, which are three equally challenging areas requiring concentrated investment to resolve.
Besides businesses with clear orientations and strategies, developing the domestic market is considered a "lifeline" by domestic textile and garment businesses when the export market is facing difficulties.
“ Businesses are connecting with each other to fulfill domestic orders, but in reality, the domestic market remains difficult due to inflation and low purchasing power. This is a general solution to compensate for production losses, not a strategic direction, ” emphasized Mr. Pham Xuan Hong, Chairman of the Ho Chi Minh City Textile, Garment, Embroidery and Knitting Association.
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