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Competition pushes Vietnamese fashion brands downhill

Vietnam’s strong fashion brands have gone downhill as they cannot compete with foreign brands. Brands like Foci, Sea, Sifa, N&M, Viet Thy, Dan Chau and Sanding, have fallen into oblivion. Many garment companies, which vowed to conquer the domestic market in the ‘return home’ movement, have given up and shifted to making products for export.

According to Pham Xuan Hong, General Director of Saigon Gon 3 Garment Company, a big exporter, the company has set up several showrooms in HCM City, but they have been taking losses. The domestic market has been very difficult to exploit, even for experienced producers of garments for export.

Exporters, who decided to focus on conquering the domestic market some years ago, as export markets shrank in the global economic crisis, have spent big money to develop their distribution networks. However, results remain unsatisfactory, even though the companies have good production workshops, labor force and technologies.

Manufacturers say, they are pessimistic about the domestic market, especially when TPP takes effect, under which import tariff will be cut to zero per cent. According to the Vietnam Textile and Garment Group (Vinatex), only 20 per cent of garment companies are keen on the domestic market, and have reserved 20-25 per cent of their capacity to make products for domestic consumption. They are focusing on making products for export.