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The number of people in the rich and super-rich groups changes, and Vietnam becomes a potential market for luxury goods.

From 2017 to 2022, the number of super-rich individuals in Vietnam is rapidly increasing. Currently, there are over 1,059 people with net assets exceeding 30 million USD. Additionally, Vietnam has a relatively young population, with an average age of 32.5 years old. This demographic is considered a potential market for luxury products.



Vietnam is increasingly becoming a popular destination for international brands, ranging from fast fashion to luxury and high-end retail. Major brands like Dior, Louis Vuitton, and Chanel have established stores in major cities in Vietnam. However, the number of stores is limited as these brands cater to a niche market of Vietnamese consumers. While luxury fashion may not appeal to the masses, there is a small segment of customers who are willing to pay for these high-end items, resulting in consistently high revenue.


Vietnam is an outstanding market in Southeast Asia with strong demand. The difficulty of moving abroad for Vietnamese people also partly affects the domestic shopping needs of Vietnamese consumers. Currently. Besides opening stores in Vietnam, many major brands in Europe have cooperated with main distribution businesses for many high-end domestic brands.


Mitra Adiperkasa


Mitra Adiperkasa is an Indonesian corporation that established a company in Vietnam in 2016 to sell Zara, a well-known luxury fashion brand from Spain owned by the Inditex group. In addition to Zara, Mitra Adiperkasa also distributes other Inditex Group brands such as Pull&Bear, Stradivarius, and Massimo Dutti, making them the official distributor of these brands in Vietnam. Furthermore, in 2022, Mitra Adiperkasa opened Digibox, an Apple Official Authorized Reseller store.


Due to the impact of the epidemic in 2021, Mitra Adiperkasa's revenue decreased slightly compared to the previous year. Entering 2022, when the luxury goods market in Vietnam began to grow strongly with the launch of Digibox, this company's revenue grew again. Specifically, Mitra Adiperkasa recorded a revenue of 1,608 billion VND in 2022, an increase of 67.4% over the same period last year.


Similar to its revenue, Mitra Adiperkasa's profit after tax in 2021 also decreased significantly, by approximately 18 billion VND. However, in 2022, the after-tax profit of this business is expected to experience a significant growth, with a profit of over 155 billion VND in just one year, a remarkable increase from the previous year's 18 billion


IPPG


IPPG was established in 1986 and is the leading retail business group in Vietnam and accounts for 70% of the domestic international brand market. Initially, IPPG invested in more than 30 projects in Vietnam such as paint factories, zipper production and export of household appliances, bamboo and rattan, etc. IPPG officially entered the field of branded goods business through 2 Member companies DAFC and ACFC.


DAFC


By 2005, IPPG officially decided to expand its high-end fashion retail business. DAFC was established to distribute more than 50 high-end fashion, jewelry, and watch brands in the world such as Rolex, Burberry, Armani Exchange,ect


Although DAFC had to close many stores during the epidemic, the company's revenue still remained stable, fluctuating around 1,500 billion. By 2022, DAFC has increased the company's revenue to 2,189 billion VND. Profit after tax also tends to increase and reach more than 136 billion in 2022.


ACFC


Based on understanding the potential of the retail market and customer needs, in 2009, IPPG continued to expand and lead the mid-range fashion segment with member company ACFC. Currently, ACFC distributes more than 24 brands and has a system of more than 270 stores located in the centers of major cities. ACFC brands are exclusively distributed in the Vietnamese market such as Nike, Mango, Levi's, Gap, Old Navy, Calvin Klein, Tommy Hilfiger, Mothercare, OVS,ect.


Business situation of ACFC slowed down in 2021 due to the impact of the epidemic, but in 2022, this business has recovered and grown even stronger, reaching VND 2,932 billion. Although in 2021 this business suffered a loss of nearly 50 billion VND, by 2022 ACFC has transformed and recorded a profit of 197 billion VND.


Net revenue of some luxury product distribution businesses
Net revenue of some luxury product distribution businesses

Tam Son


Tam Son International Joint Stock Company was established in 2005, part of Openasia Group. Tam Son provides high-end products from fashion (Hermès, Kenzo, Boss...) to watches, jewelry (Patek Philippe, Vacheron Constantin, Chopard...) and lifestyle products (Bang & Olufsen, Lalique, Diptyque…). Up to now, this business has owned more than 70 retail stores in Hanoi and Ho Chi Minh City.


Tam Son's revenue will grow rapidly in the period 2020-2022 and especially increase significantly in 2022 reaching 4,745 billion VND. Accordingly, Tam Son's profit in 2022 also increased extremely high, reaching 849 billion VND, double the previous year.

MAISON


Maison Joint Stock Company was established in 2002 and has quickly become one of the largest fashion distribution companies in introducing high-end and luxury fashion brands in Vietnam. Maison is a distributor of nearly 20 famous fashion brands such as: Puma, Fila, CHARLES & KEITH,ect.


In 2022, Maison's business situation is extremely good when revenue is double that of 2 years ago, reaching 2,785 billion VND. In particular, Maison's profit after tax will grow very high in 2022. This company has recorded a profit of 554 billion, an increase of 5.5 times compared to the previous year.


H&M


H&M is a famous Swedish fashion brand and was present in Vietnam in 2017. H&M is one of the companies that initiated the fast fashion movement to keep up with changing fashion trends. . H&M is known as the Swedish fashion giant as this brand has dominated the fast fashion market for many years.


Unable to avoid the impact of the covid pandemic, both H&M's revenue and profit in 2021 decreased significantly, but by 2022 this number has recovered. Specifically, H&M's revenue in 2022 will reach 1,396 billion VND, an increase of 66.7% compared to the previous year. Profit after tax reached more than 118 billion VND, 46 billion higher than in 2021.


GUCCI


Gucci is a renowned fashion brand that was founded in Italy in 1921. It specializes in high-end clothing, accessories, and leather products. Since entering the Vietnamese market in 2007, Gucci has established a strong reputation in the country's luxury goods market.


Despite the difficult market situation, Gucci's business in Vietnam is still developing very well. In 2022, Gucci's revenue in Vietnam reached more than 1,000 billion, while this number in previous years was only a few hundred billion. Gucci's profit after tax also grows extremely well, reaching 282 billion VND in 2022, an increase of 239.1% compared to the previous year.


Profit after tax of luxury product distribution businesses
Profit after tax of luxury product distribution businesses

LOUIS VUITTON


Louis Vuitton entered the luxury fashion market in 1854 in France. Louis Vuitton officially arrived in Vietnam with its first store located in the Metropole Hanoi hotel in 1997 and has always been a familiar destination for fashionistas.


Louis Vuitton's business activities in Vietnam in the period 2020-2022 are quite stable with revenue and profits growing year by year. In 2022, Louis Vuitton's net revenue will reach 2,360 billion, an increase of 49.6% compared to the previous year. Profit after tax of this brand also grew extremely well, reaching 330 billion.


CHANEL


Chanel is one of the famous brands in France with the most high-end fashion, perfume, and cosmetic product lines. Entering the Vietnamese market in 2011, Chanel has grown strongly, becoming a prestigious luxury brand and popular with Vietnamese consumers.


In the first 2 years of the period 2020-2022, Chanel's business situation did not change too much. By 2022, when the luxury products market begins to grow strongly, Chanel's revenue in Vietnam will increase rapidly. Specifically, this brand's revenue will reach 2,186 billion VND in 2022, an increase of 57% compared to the previous year. Chanel's after-tax profit also nearly doubled compared to the same period last year.


DIOR


Dior is the world's most prestigious, luxurious, luxury fashion and beauty brand founded in 1946. Dior is favored by many fashion lovers because of the sophistication and uniqueness in each product design.


Dior's business activities in Vietnam are developing very well. The brand's revenue tends to increase year by year. By 2022, this brand's revenue has reached 1,718 billion, an increase of 833 billion compared to 2021. Dior's profit after tax in 2022 also increased sharply, twice as high as in 2021.


ADIDAS


Adidas is a multinational company from Germany, specializing in the production of shoes, clothing and accessories. The main products of the Adidas brand include shoes, clothes, hats, socks, sports bags... As of 2022, Adidas has seven accessory factories, 24 garment factories, and 21 shoe factories in Vietnam.


Although Adidas' revenue and profits in Vietnam decreased in 2021, by 2022, the brand's business situation has recovered as before. Adidas' revenue in 2022 will reach 1,987 billion VND and profit after tax will reach 122 billion VND.


It can be said that 2022 is a quite successful year for Vietnam's luxury product market when most luxury goods distribution businesses have extremely good revenue growth this year. The revenue of all businesses is not less than 1,000 billion. According to the report, Vietnam is a key growth market in the Asia-Pacific region for brands and retailers.

Source: Vietdata's luxury goods industry report in 2023

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