VietNamNet Bridge - Many Vietnamese fashion brands which were once strong have gone downhill because they cannot compete with foreign brands.


Foci, Sea, Sifa, N&M, Viet Thy, Dan Chau and Sanding, for example, 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 make products for export. 

Only 20 percent of producers keen on domestic market

Pham Xuan Hong, general director of Saigon Gon 3 Garment Company, a big exporter, said 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.

Many Vietnamese fashion brands which were once strong have gone downhill because they cannot compete with foreign brands.

Many 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, the results remain unsatisfactory, even though the companies have good production workshops, labor force and technologies.

A producer, who asked to be anonymous, said he was pessimistic about the domestic market, especially when TPP takes effect, under which the import tariff will be cut to zero percent.

“The imports will become cheaper. This means that Vietnamese garment companies will be more miserable,” he said.

According to the Vietnam Textile and Garment Group (Vinatex), only 20 percent of garment companies are keen on them domestic market, and have only reserved 20-25 percent of their capacity to make products for domestic consumption. They are focusing on making products for export.

This explains why the textile & garment industry development plan by 2020-2030 says that the export market will still be the major market, while the domestic market is ‘important’ and ‘should not be ignored’.

Vinatex, the largest textile & garment producer, now has 70 member companies, but only a few of them can live on the home market. The majority of others don’t intend to expand in the home market.

Le Quang Hung, chair of Garmex Sai Gon, noted that it was very costly to develop the domestic market. The retail rent in advantageous positions in HCM City is as high as $500,000 a year for one shop.

“We don’t have sufficient labor force and financial resources to develop the home market,” he explained, adding that Garmex Sai Gon focuses on making products for export and doing outsourcing for Blue Exchange in low production season.

Nguoi Lao Dong quoted its sources as saying that Thai imports to Vietnam have increased by 30 percent, and Thai fashion products by 70 percent. 


NLD