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2024-03-22 -
Local fashion brands struggle to compete in domestic market

Local fashion brands struggle to compete in domestic market

HÀ NỘI —  A recent report on the local fashion market of the Vietnam Industry Research and Consultancy (VIRAC) found that Vietnamese fashion brands are losing out in the local market, which is increasingly dominated by international brands.

Fashion market revenue in  二0 二0 decreased by more than  一0 per cent from  二0 一 九 due to the COVID- 一 九 pandemic, said the report, adding that popular local brands such as Biti's, Canifa, Việt Tiến and May  一0 all ranked behind Adidas, Zara and H M in terms of sales.

The top three fashion retailers in the country in  二0 二0 were Adidas, Zara and H M. Experts have said the enthusiasm of Vietnamese people for foreign fashion brands has helped them make trillions of đồng in the country.

While the revenue of big local brands has not been reported, according to H M's annual report in  二0 二0, the brand's revenue in Việt Nam hit SEK 四 五 三 million (US$ 五 四. 三 million), up about  四. 四 per cent from  二0 一 九. The brand also opened its ninth store in the country last year.

Local media reported that a few months after launching in Việt Nam, H M achieved revenue of VNĐ 二 二 七 billion (US$ 九. 七 八 million) in  二0 一 七 and reached VNĐ 七 六0 billion in  二0 一 八 and VNĐ 一. 一 一 六 trillion in  二0 一 九.

They also said Zara Vietnam recorded VNĐ 三 二 一 billion in revenue in  二0 一 六, more than VNĐ 一. 一 trillion in  二0 一 七 and nearly VNĐ 一. 七 trillion in  二0 一 八.

As for Uniqlo, although it has not announced revenue and profit figures yet, the Japanese fashion giant has continuously opened many new stores since entering Viet Nam at the end of  二0 一 九. The brand now has eight stores in Việt Nam.

While more and more fashion stores have closed in the pandemic, during the April  三0 and May  一 public holidays, H M in Vincom Đồng Khởi in HCM City was full of people waiting in line to buy clothes. Zara, another foreign fashion brand located next to H M in the same centre, was even more crowded while Uniqlo, a Japanese fashion brand nearby, was even busier again.

VIRAC's report on May,  七 said: "More and more international brands are entering the market which is increasingly dominated by H M, Zara, Uniqlo.”

The VIRAC report calculated more than  二00 foreign fashion brands from mid-range to high-end have official stores in Vietnam.

Data from Euromonitor shows fashion giants lead the Vietnamese fashion industry, with Adidas, Zara and H M the three businesses holding the largest market share in the local fashion market.

Local fashion brands struggle to compete in domestic market

VIRAC said local fashion brands, on the other hand, were dwindling, saying: "The domestic fashion business has long been the underdog in the local market and the situation is even worse now."

According to the report, poor designs and the small scale of many local businesses made it tough for them to compete.

Phạm Xuân Hồng, chairman of the HCM City Association of Garment Textile Embroidery and Knitting, told local media: “Vietnamese love famous brands so they enjoy buying products from foreign giants when they enter the country. In addition, the foreign brands also serve them with products of diverse models at suitable price segments.”

The trading of fake products at markets and stores and on e-co妹妹erce platforms has also caused difficulties for Vietnamese businesses. — VNS