Joining the international fashion and sports equipment supply chain: 5 factors to consider

Sharing at the Vietnam - EU Forum within the framework of the event series "Connecting international supply chains" (Viet Nam International Sourcing 2023) organized by the Ministry of Industry and Trade in coordination with the People's Committee of Ho Chi Minh City on the afternoon of September 14, Mr. Dang Quoc Thang - Production Director of Decathlon Vietnam's textile industry - said: In 2020 and 2021, the Covid-19 pandemic has strongly impacted the global economy and manufacturing industries, leading to disruptions in the supply chain. Along with that, the instability of the world political situation has created a double impact on the global economy when inflation increases rapidly and demand declines, creating large inventories. The consequence of that impact is a change in customer consumption habits, where customers are increasingly paying more attention to price, product life cycle, durability as well as product origin. This leads to a shift in strategy, specifically shifting the supply chain and purchasing of brands.

Not out of the general trend, Decathlon also encountered many difficulties. These difficulties are forecasted to continue in 2024. However, sports goods are still an inevitable need when after the Covid-19 pandemic, many people pay more attention to health care. This is an opportunity for the fashion and sports equipment industry to develop positively in the medium and long term.

Mr. Dang Quoc Thang - Production Director of Decathlon Vietnam's textile industry shared at the forum.

Despite many difficulties, according to Mr. Thang, this is also an opportunity for businesses to change and find new directions.

Assessing the Vietnamese fashion and sports equipment market, Mr. Thang said that currently, the Vietnamese fashion and sports equipment industry is facing fierce competition with Bangladesh. Therefore, to compete with other countries, Vietnamese businesses need to pay attention to 5 factors.

Accordingly, businesses need to promote lean production, optimize processes and reduce production costs, and build a culture of continuous improvement.

"During a working session with Chinese customers, many buyers said that in 2024, product prices will decrease by about 10%. Therefore, if businesses do not produce leanly and reduce product costs, it will be very difficult for businesses to compete," Mr. Thang informed.

At the same time, businesses must promote green production, use renewable energy (solar energy...), and build a roadmap to stop using coal. "If any factory uses coal, Decathlon will not cooperate. And if we want to participate, we must enter Decathlon's supply chain, so we must have a roadmap, at least after 2025, we will have to convert and completely eliminate fossil energy," said Mr. Thang.

Along with that, increase autonomy in production. Previously, most Vietnamese factories only did processing, but in reality, if the enterprise had the ability to research samples and produce, buyers would also be very interested. At the same time, research and gradually invest in automation and digitalization of design, quotation, and production management processes towards an advanced factory model and increase autonomy and decision-making.

In addition, to increase competitiveness in the supply chain, businesses must adapt to smaller orders and shorter delivery times. Another important criterion is to maintain a regime to retain, train and develop quality human resources to prepare for the recovery and acceleration phase.

According to Mr. Thang, Decathlon always wants to find reliable and highly autonomous manufacturers and partners. In the supplier selection process, Decathlon will prioritize businesses that meet the criteria of responsibility to workers and the community; Corporate responsibility to the environment; Ensuring factors of competitive prices, fast delivery time and good quality. In addition, businesses must also have sufficient financial capacity.

“We attach great importance to the responsibility of suppliers to workers, the community and the environment. These are the prerequisites and uncompromising factors when we choose our partners,” Mr. Thang affirmed.

Decathlon is a French sports corporation that owns many exclusive sports brands such as Domyos, Quechua, Kalenji, Nabaji... The products of this corporation are not only consumed domestically but also exported to many markets around the world.

Specifically, this group currently has more than 1,700 stores in 68 countries. Decathlon's traditional stores range in size from 1,000m2 to 12,000m2. Therefore, becoming a supplier of this group will help Vietnamese products improve their competitive position in the global supply chain.

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