Three foreign fashion brands opened shops in early September – Stradivarius and Massimo Dutti from Spain, and H&M from Sweden. Vietnamese queued up at H&M shop on the opening day.
What Zara and H&M accomplished with their first shops in Vietnam, according to analysts, showed the attractiveness of the fast fashion market. Uniqlo will also open in Vietnam soon.
An analyst said the fact that Vietnamese are rushing to buy fast fashion is understandable, because it is a growing tendency in many countries.
|What Zara and H&M accomplished with their first shops in Vietnam, according to analysts, showed the attractiveness of the fast fashion market. Uniqlo will also open in Vietnam soon.|
Zara, H&M and other high-street brands are threatening luxury brands. The ‘big guys’ now have to cut production costs to improve competitiveness and instead of launching seasonal collections, they now just introduce more collections throughout the year.
The analyst said that Zara is following a wise strategy in Vietnam with selling prices 15-20 percent lower than in Thailand, Singapore and Malaysia for selected items. The products available in Vietnam are priced from VND149,000 to over VND1 million per product.
H&M also pursues a ‘reasonable pricing strategy’. However, H&M prices are lower than Zara.
Besides the pricing strategy, the success of fast fashion brands is also determined by their capability to launch new products.
Zara, for example, can design, produce, do marketing and distribute a new product to 93 countries with 2,213 shops within two weeks.
Le Quynh Trang, CEO of Multimedia JSC, said that competitive prices are not enough to bring success.
“The designs must change continuously and designers need to satisfy users’ requirements,” she said.
As foreign fast fashion brands have both important factors, considered the key to success, analysts have warned that the market share for Vietnamese fashion brands will shrink.
Ninomaxx, Foci, Hagattini, Viet Thy, PT2000, BlueExchange and Ttup, once famous brands, are losing their market share. Thoi Trang Viet, the company which owns Ninomaxx brand, and once had 200 shops, has just restructured the network and cut the number to 64, with most located in the south.
Though Thoi Trang Viet’s director Nguyen Huu Phung is optimistic about the business, but analysts say it will have to make changes to retain its market share.
Nguyen Van Thoi, president of TNG, also commented that in the fashion industry, losing and gaining depends on how quickly fashion brand owners launch new products. Therefore, Vietnamese companies need good design staff.