Vietnamese brands in the face of the influx of “instant noodle” fashion

As soon as she saw the Zara dress for nearly 800,000 VND hanging on the shelf, Ms. Ngan - an employee of a bank in Hanoi decided to buy it as a birthday present for her young daughter. With this amount of money, she could buy 3 products of the domestic fashion brand, but the new design of the dress was the deciding factor that made the young mother not hesitate at all.

The choice of Ms. Ngan and many other young people shows that many Vietnamese are willing to spend money on foreign brands instead of domestic fashion brands. A recent survey by Niesel also shows this trend. The survey shows that Vietnamese people rank 3rd in the world in terms of love for branded goods, after China and India.

The arrival of foreign giants reminds the market of once-famous domestic brands that are running out of steam after a period of rapid growth.

Appearing in the early 2000s, there were quite a few fashion brands that could be mentioned such as Foci (Nguyen Tam Fashion Company), NinoMax (Viet Fashion Company), BlueExchange (Basic Green Fashion Company), PT2000 (Pham Tuong 2000 Garment Company)... Among these, Foci has disappeared, the rest still exist but are quite obscure.

Founded in 1999, Foci was very successful when it was positioned in the mid-range segment. Eight years later, the company expanded its system to 60 stores in most major cities. After 14 years of existence, Foci suddenly announced its withdrawal from the market at the end of 2012, which the business owner explained at that time was "having difficulties due to reduced purchasing power, unable to compete with cheap Chinese goods".

Not completely disappeared like Foci, but names like Ninomaxx, BlueExchange, Viet Thy... are fading away and are existing weakly compared to their golden age a decade ago.

From more than 200 stores nationwide, the Thoi Trang Viet system is gradually shrinking, the company also "killed" the Maxx Style brand - one of the 3 product lines targeting the popular segment. Instead of developing and expanding stores on major fashion streets, the number of existing stores of Ninomax is currently concentrated mainly in popular shopping centers. With the remaining 2 brands, N&M and Ninomaxx, Thoi Trang Viet is determined to consolidate its market share by changing product designs. However, facing the wave of competition from foreign giants, experts say that the company will also face a lot of competition.

Some other fashion brands that are considered to have a place in the market such as May 10, Viet Tien, An Phuoc... only focus on a rather narrow segment, office fashion.

Experts say that in the fashion retail industry in many countries, Zara and H&M have long been called “slaughterers” when they started to join the trend of reducing costs and lowering prices to increase competitive pressure. If domestic brands in the same segment do not wake up and reconsider their steps, the storm that will fall on Vietnamese brands is certainly not far away.

The exhaustion of Vietnamese fashion brands after a period of rapid development is explained by experts. In addition to difficulties in costs and premises, Vietnamese businesses are also exhausted because they cannot grasp new design trends, cannot bring style experiences to consumers, and cannot change the way they promote products...

“Need money and a unique identity”, is the definitive answer of Mr. Le Tien Truong – General Director of Vietnam Textile and Garment Group (Vinatex) when asked about the conditions that can help Vietnamese fashion stand firm and compete with the massive influx of foreign giants.

Mr. Truong admitted that building a Vietnamese fashion brand is not easy. “We can completely make products that Zara and HM sell in the Vietnamese market, even higher quality products at only 60% of the price, but whether or not to position a Vietnamese fashion brand on the world fashion map is another matter,” he said.

Vinatex General Director analyzed that world fashion brands are built and divided into: economic powerhouses like the US; countries known as 'cultural centers, with deep potential values' like Italy, France... and finally groups with their own personalities like Japan, Korea...

According to Vinatex CEO, for consumers to decide to open their wallets to buy a product, first of all, they must “admire that country”. Consumers are willing to buy 2 expensive products instead of 3 cheap shirts because they have a certain admiration.

Citing the case of China, he further explained that although this country is the world's fashion factory, up to now there has not been a recognized international fashion brand, because "consumers still think that Chinese clothes are cheap".

For Vietnam, "our problem is that we have not chosen a direction to create our own identity and too many fashion designers are 'dying'."

“From the design stage to the time it is put on the supermarket shelves, half of the fashion products have to endure the discount cycle. That means you can sell the first shirt and make a profit of 500%, but this profit will have to be shared with all the discounted products after that, even the last one for charity,” he explained.

Another point, according to the General Director of Vinatex, that helps popular fashion brands like Zara, HM... initially win big when entering the Vietnamese market, is because these brands apply 4.0 technology, organize production in large chains (big data) according to market demand... When a shirt model is selling well, they are willing to increase production by 200% to produce and immediately distribute that model on the market, and vice versa.

“To do this, there is nothing more than applying technology, production and coordination in large chains,” he concluded.

Mr. Minh