16:34 | 18/10/2017 Trade
(VEN) - The Vietnamese fashion retail market is undergoing significant change, with the entry of a great many world leading brands.
“Fast fashion” wave
Pham Thai Binh, Head of Retail Leasing at Savills Ho Chi Minh City, said Vietnam is undergoing economic transition with profound changes in customers’ consumption behavior. Surveys conducted by many prestigious international agencies about four to five years ago showed that it would take the retail market of Vietnam a decade to reach a certain level of development.
However, many experts have been surprised by what they are witnessing - the market’s impressive breakthrough because of the community’s rocketing demand for reasonably priced imported goods. Zara, one of the world’s biggest fashion brands, set prices for selected items at 15-20 percent less than its stores in Malaysia and Singapore, triggering a craving for fashion in Vietnam. Zara Vietnam is one of the retail chain’s five best sellers. This has encouraged other foreign brands to enter the Vietnamese market. Two famous “fast fashion” brands, H&M from Sweden and Uniqlo from Japan, will soon open stores in Ho Chi Minh City, and rumor has it Forever 21 might join them.
While consumer appear to welcome the trend, the increasing presence of foreign fashion brands will confront Vietnamese businesses in the field with challenges, forcing them to improve in order to survive the competition. Binh said Vietnam has been highly rated for its purchasing power of imported goods, whether its economy experiences fast or slow growth. Here in Vietnam, reasonably priced “fast fashion” has become the fastest growing industry, followed by the cinema, entertainment and cuisine industries. Retailers in Vietnam have gradually become more responsive to daily needs of their customers and are offering more affordable prices.
The Hanoi Supermarket Association has estimated that foreign brands make up about half of Vietnam’s retail market. “While foreign businesses are professional and prudent with long-term strategies and visions, their Vietnamese counterparts are flexible and adaptable, as they know Vietnamese consumers’ tastes well. However, such flexibility should only be a strength in domestic provincial markets, but not foreign markets. Vietnamese businesses need to build longer-term strategies and develop professional staffing if they are to survive competition with foreign rivals and develop on a sustainable basis,” said economist Vu Vinh Phu, former president of the Hanoi Supermarket Association.
Domestic textile and garment enterprises should take the initiative and turn challenges into opportunities. Many of them are changing significantly. Canifa, for example, has diversified its range of products while improving product design and approaching buyers through new channels. Meanwhile, higher-grade domestic brands including Elise, Alcado, Coco Shin, and Magonn, among others, are renovating their product design in accordance with international fashion trends to better satisfy their customers.