Econ
Vietnam retail market: Impression from the wave of fast fashion
Report from the retail department of Savills Vietnam shows the presence of series of fast fashion brand is a sign for the strong development of Vietnam retail market.
After Zara coming to Vietnam, the Vietnam fashion market once again feel the heat with Hennes & Mauritz AB (H&M) officially launched in Ho Chi Minh city in the beginning of September, not mentioning Uniqlo also plans to access the Vietnam market.
After Zara, other branches of Inditex such as Stradivarius, Pull & Bear, Massimo Dutti also joined the Vietnam market, with an aim to the potential young customers of Vietnam. The wave of fast fashion (contemporary term used by fashion retailers to express that designs move from catwalk quickly to capture current fashion trends) shows the Vietnam retail market has significantly transformed compared to the estimation 4 or 5 years ago from international organization, in which said Vietnam retail market would need at least 10 years to be fully developed.
This impressive breakthrough of the market stems from the high demands of Vietnamese customers for imported products with reasonable prices, which is only partially met through the hand carried goods sources. Evidently, revenue of Zara Vietnam is currently in the top 5 for the highest revenue stores of the brand in the world. This is seen as strong motivation for other fashion brands such as Uniqlo and Forever21 to approach Vietnam fashion market.
According to the estimation of Hanoi Supermarket Association, approx. 50% of the retail market shares in Vietnam is belong to foreign companies. However, experts said the number in reality is even higher. Based on this estimation, in the future, operation of domestic retailers can be narrowed due to the lack of experience, investment scale and qualified human resources.
Besides, the Vietnam retail market is seen as promised land for foreign investors. As such, they are willing to invest into local enterprises to serve the purpose of expanding the retail market and development in fields of food & beverage, entertainment, education. The manufacturing process for retailing is also progessing posivitely, with the trend of producing goods at site is growing, due to competitive price and meet the demand of customers.
The biggest difference, according to Savills Vietnam is that, foreign enterprises always carefully implement their retail system with strategy, long term vision, while vietnamese enterprises are considered as flexible and quickly adapt to any changes, as they understand the customers behavior and culture . However, in international playground, this kind of flexibility is not an advantage anymore, despite this can apply in Vietnam.
Besides, Vietnamese retailers are mainly focusing on the commerce aspect, which includes 2 phases: building brand and selling products. Reason for this is not only Vietnamese enterprises do not want to develop sustainable, but due to the fact that the larger the sacle, the more things go out of control. When companies cannot overcome the breakpoint and going down, leaders of domestic retailers often think about selling the enterprise and loof for other opportunities.
As such, if companies want to develop sustainably, they have to think about a long term strategy and focus on qualified and professional personnel before going in a marathon which requires a lot of efforts and money. Experience and information gained through this process will support domestic retailers in looking for the right direction, gain market shares and building long term brands for sustainable development.
After Zara, other branches of Inditex such as Stradivarius, Pull & Bear, Massimo Dutti also joined the Vietnam market, with an aim to the potential young customers of Vietnam. The wave of fast fashion (contemporary term used by fashion retailers to express that designs move from catwalk quickly to capture current fashion trends) shows the Vietnam retail market has significantly transformed compared to the estimation 4 or 5 years ago from international organization, in which said Vietnam retail market would need at least 10 years to be fully developed.
This impressive breakthrough of the market stems from the high demands of Vietnamese customers for imported products with reasonable prices, which is only partially met through the hand carried goods sources. Evidently, revenue of Zara Vietnam is currently in the top 5 for the highest revenue stores of the brand in the world. This is seen as strong motivation for other fashion brands such as Uniqlo and Forever21 to approach Vietnam fashion market.
According to the estimation of Hanoi Supermarket Association, approx. 50% of the retail market shares in Vietnam is belong to foreign companies. However, experts said the number in reality is even higher. Based on this estimation, in the future, operation of domestic retailers can be narrowed due to the lack of experience, investment scale and qualified human resources.
Besides, the Vietnam retail market is seen as promised land for foreign investors. As such, they are willing to invest into local enterprises to serve the purpose of expanding the retail market and development in fields of food & beverage, entertainment, education. The manufacturing process for retailing is also progessing posivitely, with the trend of producing goods at site is growing, due to competitive price and meet the demand of customers.
The biggest difference, according to Savills Vietnam is that, foreign enterprises always carefully implement their retail system with strategy, long term vision, while vietnamese enterprises are considered as flexible and quickly adapt to any changes, as they understand the customers behavior and culture . However, in international playground, this kind of flexibility is not an advantage anymore, despite this can apply in Vietnam.
Besides, Vietnamese retailers are mainly focusing on the commerce aspect, which includes 2 phases: building brand and selling products. Reason for this is not only Vietnamese enterprises do not want to develop sustainable, but due to the fact that the larger the sacle, the more things go out of control. When companies cannot overcome the breakpoint and going down, leaders of domestic retailers often think about selling the enterprise and loof for other opportunities.
As such, if companies want to develop sustainably, they have to think about a long term strategy and focus on qualified and professional personnel before going in a marathon which requires a lot of efforts and money. Experience and information gained through this process will support domestic retailers in looking for the right direction, gain market shares and building long term brands for sustainable development.
