VietNamNet Bridge - Vietnamese businesses believe there will still be enough customers for Vietnamese products, despite growing competition from foreign fashion stores.

In September 2016, Spanish-owned Zara made its debut in Vietnam and announced the sales of VND5.5 billion on the opening day. Some days ago, H&M confirmed it is going to open its first shop in Vietnam at Vincom Dong Khoi in HCMC.

On June 9, Old Navy inaugurated its first shop in Vietnam, while Mango has been present in Vietnam for a long period and has many loyal customers.

A senior executive of a Vietnamese fashion brand commented that the domestic fashion market can be divided into three segments – high-end, high-street and low-end. 

Vietnamese businesses believe there will still be enough customers for Vietnamese products, despite growing competition from foreign fashion stores.

Vietnamese fashion brands have to struggle in all three segments. Even in the low-end segment, Vietnamese brands cannot compete in prices and designs with counterfeit goods and China-made products.

In such conditions, some fashion brands try to conquer niche markets by developing products with their own designs and reasonable prices. However, in customers’ eyes, the products are just ‘a little bit better than low-cost products or imports from China’.

Meanwhile, some brands set relatively high prices for products and have to spend a long time on every model. Therefore, he said, it will be a thorny path for Vietnamese brands to compete with Zara, Mango or H&M.

Nguyen Tiep, public relations director of NEM, a Vietnamese office-fashion brand, which is the only brand which has factories throughout the country. 

He said NEM doesn’t fear foreign rivals.

The executive commented that foreign brands have colorful marketing campaigns and satisfy the Vietnamese fondness for foreign products. “Frankly speaking, Zara’s products are incomparable with some Vietnamese brands,” he said.

Tiep believes that Vietnamese are not loyal to one brand. If Vietnamese businesses understand that the ‘life expectancy of Vietnamese customers’ taste’ is getting shorter, they will compete by launching new products.

That is why NEM is confident about its competitiveness. “We have factories throughout the country and we don’t depend on producers. Therefore, we need only two days to launch a new product, while other brands need two weeks or one month,” he said.

A branding expert commented that Zara cannot compete with Vietnam’s brands in price and it is unaffordable for the majority of Vietnamese. 

Though Zara is positioned as ‘high street brand’, it is still expensive compared with the Vietnamese income. Its products are still priced at VND300,000-500,000 even with discount rate of 50-70 percent.

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