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Vietnamese Fashion Brands Are Restructuring To Survive In The Domestic Market

Textile and garment is one of the key production industries of the economy, accounting for 12 - 16% of the total export turnover of the country. Every year, Vietnam exports billions of USD of textile products. However, Vietnamese brands are facing fierce competition with foreign fashion brands in the domestic market, especially in the affordable and mid-range segments.



Vietnamese fashion brands lose market share to foreign fashion brands.

Vietnam's domestic fashion market is considered a potential market for foreign brands to enter. In a short time, a series of famous brands such as Hennes & Mauritz (H&M), Zara, Mango, and Topshop have actively promoted the process of penetrating the Vietnamese market.


It is estimated that more than 200 foreign fashion brands have entered Vietnam. The influx of these foreign fashion brands has made the domestic fashion industry extremely competitive. Foreign fashion brands account for more than 60% of the domestic market share and are estimated to have an average growth rate of 15-20%.


Currently, Vietnamese fashion brands are facing fierce competition from imported fashion and are in danger of losing their position in the Vietnamese market. Particularly, only the high-end product lines of trousers, shirts, vests, and office wear from May10, An Phuoc, and Viet Tien still have a place in the Vietnamese market.


Realizing that the domestic fashion market is being quickly dominated by foreign brands, Vietnamese brands are determined to promote development and regain market share before the domination of foreign fashion brands.


May 10

May 10 was formerly a military garment factory in the Viet Bac War Zone, one of the leading enterprises of Vietnam's textile and garment industry. May 10's products have been exported to many countries around the world and are very popular with both domestic and foreign consumers. Currently, May 10's products are sold in over 200 stores across the country.


With a history of establishment and development associated with the socio-economic development of Vietnam, May 10 has affirmed its position as its revenue has been increasing gradually over the years. In 2022, the company's revenue reached more than VND4,500 billion, an increase of nearly VND1,000 billion compared to 2021.


Although the brand is currently facing a lot of competition from foreign competitors, May 10 still maintains its performance when the profit after-tax in 2022 reaches more than VND 123 billion, nearly double that of 2021.


An Phuoc

An Phuoc is one of the leading garment brands in Vietnam. Starting from a small garment factory, after more than 20 years of operation, An Phuoc has become a renowned company in the Vietnamese garment industry, particularly in men's fashion.


Realizing market trends and needs, An Phuoc has promoted upgrading its system as well as its business strategy. In 2022, An Phuoc achieved revenue of more than VND2,200 billion and its profit after tax increased year by year. In particular, An Phuoc's profit after-tax was recorded at VND588 billion in 2022.


Viettien

Viettien Garment Corporation was established in 1975, specializing in men's products with diverse quality products. In the domestic market, Viet Tien has more than 1,300 stores spread throughout the provinces. Viet Tien's products are varied, with many product lines: Viet Tien, Viet Long, Smart Casual, Manhattan, San Sciaro, etc.


The year 2021 has been a difficult one for Viet Tien, with pressure from foreign competitors and damage from the Covid-19 pandemic resulting in a net profit of only VND83.4 billion, a decrease of more than 42% compared to 2020. This is the lowest net profit in the history of Viet Tien Garment Joint Stock Company.


However, in 2022, Viet Tien had an extremely good transformation when revenue reached VND8,464 billion and profit after tax increased to more than VND177 billion. This positive change has affirmed Viet Tien's position in the Vietnamese domestic fashion market.


YODY Fashion

Starting in 2009, the Hi5 fashion brand underwent a journey of development. In 2014, it was officially renamed YODY. It is now considered one of the successful startup brands in the Vietnamese fashion industry.


YODY has chosen a market coverage strategy with 220 stores covering 46 provinces and cities in Vietnam. By applying a different business strategy, not focusing on large markets such as Hanoi and Ho Chi Minh City like other fashion brands, YODY has been able to reduce competition from outside brands.


Although it has been on the market for over a decade, YODY has affirmed its position as the revenue level has been trending higher over the years. Especially in 2022, YODY achieved a revenue of VND2,730 billion with a profit after-tax of VND151 billion. With a profit like this, YODY can be placed on par with long-standing brands in the Vietnamese fashion market.

The Blue Exchange

Blue Exchange is one of the oldest fashion brands in Vietnam, established in 2001. It has over 300 stores across Vietnam's provinces and cities, offering product lines from clothing to fashion accessories.


Although it is a long-standing brand, the business situation of Blue Exchange is not very stable due to competition from many sides. In 2021, this brand prospered when the profit after tax reached VND25 billion, the highest profit in the last five years for Blue Exchange. However, Blue Exchange's profit dropped sharply to only VND187 million in 2022.


OWEN

Owen is a Vietnamese domestic men's fashion brand, established in 2008 by the Viet Nam Kowil Fashion Joint Stock Company. Through its development process, OWEN has risen to become one of the most prestigious fashion brands in the domestic market. Currently, OWEN has more than 180 stores spread across the country.


Owen's business situation in 2022 is better than in previous years. The revenue of this brand reached VND341 billion, an increase of more than VND100 billion compared to 2021. Especially, Owen's profit after tax in 2022 is extremely high, reaching VND16.5 billion, five times higher than in 2021.


HOANG PHUC International

Hoang Phuc International was established in 1989, one of the first fashion retail chains specializing in distributing men's brands in the country. Currently, Hoang Phuc International owns six world-famous brands: Kappa, Dr Martens, Ecko Unltd, Superga, Replay, and Staple, which are sold at nearly 50 stores in the country.


Hoang Phuc International is a long-standing, branded fashion chain with an annual revenue of hundreds of billions; however, the profit that this company brings is very low. Only in 2021 will the profit slightly increase to more than VND11 billion.


In 2022, the company's revenue continues to grow, reaching VND789 billion, an increase of nearly VND300 billion compared to 2021. However, the restructuring of the brand towards male, female, and child customers in 2022 has caused costs to increase, resulting in a profit after tax of only VND1.8 billion.


Canifa

Fashion brand Canifa was established in 2001 with more than 100 stores. Canifa offers fashion lines for both men and women, as well as for boys and girls.


Canifa's revenue has grown steadily in recent years, reaching VND1,400 billion in 2022. Although revenue has always grown steadily, Canifa has continuously reported losses of tens of billions. However, there is a bright spot in Canifa's profit that shows that the loss is decreasing significantly; in 2020 the company suffered a loss of nearly VND200 billion, but by 2022 this loss will only be VND56 billion.


ELISE

Elise, which operates in the field of apparel and fashion design, was established in 2011. Elise specializes in distributing product lines such as office fashion, streetwear, party, basic line, limited line, and attached fashion accessories.


In 2022, this company achieved a revenue of VND800 billion, an increase of more than VND150 billion compared to 2021. After suffering a huge loss of more than VND85 billion in 2021, in 2022, ELISE has transformed, with the profit after tax increasing to VND95 billion.

Seedcom Fashion Group

Seedcom Fashion Group is the management company of famous fashion brands JUNO and HNOSS. It currently owns 27 showrooms under the HNOSS brand and 68 showrooms under the JUNO brand.


According to reported data, in 2021 the company has suffered a net loss of nearly VND30 billion. This is a time when Vietnamese fashion brands are competing fiercely with foreign brands, so Seedcom has faced difficulties during this period.


In 2022, Seedcom achieved revenue of VND547 billion, an increase of nearly VND200 billion compared to 2021. After suffering a large loss in 2021, by 2022 the profit after tax had changed from negative to positive, reaching VND5 billion.


IVY Moda

Established in 2005, IVY Moda has now become a renowned fashion brand in Vietnam. It began with office fashion for women and achieved much success. Currently, IVY Moda has launched several product lines: IVY Senora high-class evening dress, IVY Accessorize high-class accessories line, IVY You streetwear product line, and IVY Secret lingerie line.


In recent years, due to the impact of fierce competition in the Vietnamese fashion market, the revenue of this brand has been only VND350 billion. Not only that, the profit of IVY Moda has also been extremely meager at only a few tens of millions.


NEM

NEM was established in 2002, specializing in the design and manufacture of women's clothing. NEM provides customers who are 25 years old or older, have a high and stable income, and especially love new and unique fashion models.


NEM's period 2020-2021 extremely was difficult. It suffered losses of several tens of billions of dong. In 2022, NEM's business prospered, with revenue reaching nearly VND600 billion, a slight increase of nearly VND200 billion compared to 2021. NEM no longer suffered losses of tens of billions, but instead had a profit of more than VND20 billion.


M2

M2 was born in 2001, is a pioneering fashion business unit following the supermarket model. The business direction of M2 is to sell a variety of types and models. Products sold at M2 serve officials, employees, workers, and students, including the middle class.


In 2022, this brand's revenue reached VND121 billion, up 43% compared to the previous year. After suffering a loss of VND344 billion in 2021, by the end of 2022, M2 had a profit after tax of VND374 billion.


In the current difficult context, the domestic purchasing power has decreased significantly and foreign fashion brands are massively attacking Vietnam, making the competition in the domestic fashion market extremely fierce. Conquering the domestic market of Vietnamese fashion brands is difficult, challenging, and risky.


Fashion trends and consumer psychology change rapidly over time, so in order to compete in the domestic fashion market, Vietnamese brands need to learn about consumer habits and purchasing power in this market, creating products that meet domestic demand. If businesses are not agile and do not update and innovate, they will be left behind in this competition.


Source: Vietdata's 2022 Vietnam Fashion industry report


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