With the arrival of foreign fashion brands, analysts say Vietnam’s fashion industry is floundering. Many fashion brands have come to Vietnam, resulting in ‘fast fashion’ trend among Vietnamese youth. In early September, the Swedish brand H&M opened its shop in HCMC. Earlier, Zara opened one outlet in Hanoi and another in HCMC. Zara’s first shop in HCMC reported revenue of VND5.5 billion on the opening day, the highest among Zara’s shops overseas.
The success of Zara in Vietnam has prompted Inditex, the group which owns Zara Bershka, Stradivarius, Massimo Dutti and Oysho, to bringing other brands to Vietnam. Reports say that Stripe International from Japan is going to take over Vietnamese NEM. Nguyen Tiep, PR Director of NEM, confirmed the two sides are negotiating Stripe’s capital contributions. Vietnam began seeing a tsunami of foreign brands since early 2015, when tariff was cut. There are around 200 foreign fashion brands in Vietnam. The huge influx of foreign brands shows the country is an attractive market. According to Vinatex, the domestic garment market is valued at $4.5 billion and has a growth at 20 per cent per annum. Vietnamese spend VND100 trillion on clothes each year. A Nielsen report reveals clothing is the third priority item among Vietnamese, post food and savings.
Despite the fact that the market is huge and promising, domestic fashion brands are facing problems. Well-known brands such as Ninomaxx, Blue Exchange, Viet Thy, Foci, Sifa, PT 2000, Sea Collection and Dan Chau, which had hundreds of shops, have reduced their network. In 2013, Ninomaxx, which felt the impact of foreign companies, decided to change its shop model into a one-stop shop Ninomaxx Concept and restructured the company. Ninomaxx’s Chair Nguyen Huu Phung says the company had to carry out reform on products, distribution, customer service and labour. The brand is currently down to 60 shops as against 200 earlier.