A) The current situation of Vietnam’s fashion market

    1. Market revenue declined.

      Revenue from the fashion market in 2020 has decreased by over 10% compared to 2019 under the impact of the epidemic. In particular, clothing still contributes a great sales with more than 50% of the industry’s total revenue. Media channels and online shopping received remarkable growth when people began to have the habit of shopping online. Lazada accounts for about a half of the total revenue of online fashion shopping channels, followed by Sendo, Facebook, Tiki …

                                                  Source: VIRAC GSO

      Young people aged 25-34 are the group that spends the most on fashion. This is reasonable because young people always pay attention and are willing to spend on their appearance. Besides, this is also the group that quickly grasps new trends and has consumer behaviors that are influenced by the media and celebrities. In which, the proportion of spending on the fashion of women in Vietnam is slightly higher than that of men, reaching over 50% in 2020.

      Source: VIRAC Statista

      The average revenue per product decreased slightly in 2020 as consumers cut down spending. According to a survey by Asia Plus. Inc on Vietnamese fashion consumption behavior, price is always a higher criterion than the brand’s popularity, plus the impact of epidemics, the sales of luxury goods have decreased significantly.

      Source: VIRAC, Euromonitor

    2. Market share of some typical fashion companies.

      There are more and more international brands entering the Vietnamese market and gradually dominate such as H&M, Zara, Uniqlo, … Currently, there are more than 200 foreign fashion brands from mid to high-end products that have their official stores in Vietnam. The “landing” of many foreign fashion brands has pushed the domestic fashion industry which has only a small market share shrinking. 

      Source: VIRAC, Euromonitor

      According to the data from Euromonitor, in the Vietnamese fashion market, no business holds more than 2% of the market share. With the largest market share, Adidas Group holds 1.5% market share. In which, the top 3 enterprises in Vietnamese fashion companies are all from abroad with many famous brands which are very popular with Vietnamese consumers.

      Following the top 3 are Vietnamese enterprises that own familiar Vietnamese brands such as Biti’s, Canifa, Viet Tien, May 10 … Some domestic brands that are considered to have a foothold in the market such as Viet Tien, Nha Be, An Phuoc, May 10, … are also concentrated in the office product segment. Some domestic brands such as Foci, although once considered a “luxury brand” with large chain stores, have closed. Vietnamese businesses outsource to many major fashion brands in the world, so the quality of products produced by Vietnamese enterprises, in fact, is not too different if compared to the products of many international brands.

    3. Backlog of the Vietnamese fashion market.

    • There is no breakthrough to the world, including the region.

      As one of the countries exporting textiles and garments in the world, but Vietnam’s fashion market is still unfamiliar with the world fashion map, even in the region. Exported textile products are still heavily outsourcing and exported under the names of foreign brands. Although Vietnamese fashion possesses many impressive talent design faces that are highly appreciated by international colleagues but still not widely known, it is necessary to improve the domestic fashion industry in combination with the media. to bring Vietnamese brands to the world.ㅤ

    • Inferior in the domestic market

      The domestic fashion business has long lost its competitive advantage with international brands, even in the home field due to poor design and small scale. Although there have been many improvements in materials as well as designs over the years, the operations of the main fashion companies in Vietnam are still heavily outsourced. ㅤ

    • Suffusing of counterfeits

      Counterfeit is always an issue in the Vietnamese fashion industry. Especially in the context of extensive integration, digital transformation, the situation of smuggling, stalls, and counterfeit of famous brands in the world is sophisticated, and even developed in the network environment. Most supermarkets, fashion stores, even online fashion shopping channels in Vietnam blatantly sell products of unknown origin, with diverse designs and much cheaper than authentic items. Although in 2020, the Vietnam Directorate of Market Surveillance has discovered and solved many cases of selling counterfeit goods, but the sale of counterfeit goods is still rampant, causing difficulties for the Fashion market in particular and the Vietnamese Fashion market in general.

    • Spontaneous business

      The spontaneous business trend is accompanied by the lack of professionalism of many Vietnamese fashion start-ups: the first collection may sell well but not sustainably, and cannot be maintained for long in the market. There is no suitable strategy for managing and promoting the brand in the long term … Many young brands even copy designs from international brands and sell them at cheaper prices in order to profit without aiming for long-term development goals. Much of the reason lies in the fact that Vietnam currently does not have an environment and a methodical school for operating fashion brands to develop the domestic fashion industry effectively and systematically.


B) The impact of the SARS-CoV2 epidemic on the Vietnamese fashion market

In early 2020, retail stores had to close to control the spread of the disease. Sales of clothing in 9M/2020 reached 198 trillion VND, of which the consumption of office clothes such as suits, shirts, trousers… decreased significantly due to complicated epidemics, many businesses closed their retail branches causing the social unemployment rate to increase.

Not only reducing the total revenue of the industry, the demand for fashion products of high-end brands has also declined, due to the need to prioritize essential items when tightening spending in times of epidemics. The domestic fashion business has been underdogs on the home turf and is now more and more struggling.

During the epidemic, masks became an essential item in Vietnamese daily life. In the first outbreak, masks were always out-of-stock and were the key product to help many Vietnamese textile and garment enterprises generate revenue. Many designers also create a collection of masks, hats/glasses that are poisonous, strange, and beautiful as a new accessory to express the personality of the wearer. Many Vietnamese businesses turn to manufacturing and exporting masking products to generate replacement revenue to stay on the market.

C) Trends of the Vietnamese fashion market in 2021

    1. Sustainable fashion

      In recent years, the Vietnamese fashion market has recorded the arrival of fashion brands in the world and received many positive business results. The ability to allow customers to access the latest designs at affordable prices has created the attraction of “fast fashion” to Vietnamese consumers. However, the short lifecycle causes these “fast fashion” items to be soon thrown away, causing negative impacts on the environment, people, and resources.

      Meanwhile, sustainable fashion – the supply, production, and consumption of fashion products designed in a way that ensures environmental, social, and economic sustainability – is forecast to be an inevitable trend in the context that  Vietnamese people’s income is gradually improving and young people’s sense of responsibility for fashion products and the environment is increasing. In the coming time, the fashion industry will focus more on sustainability including materials produced from environmentally friendly sources, recycled materials, and fewer chemicals; the production process ensures energy-saving factors, labor welfare, …

    2. The popularity of influencer marketing

      Influencer marketing gradually become a media method that being invested by fashion brands recently. Facebook, Youtube, Instagram, TikTok… are popular channels for KOLs to introduce new brands and designs. Besides, KOLs are also the representative face in the lookbook, promotional videos of brands.

      Brands often choose influencers with a set of followers that match their target customers. Some famous fashion KOLs in Vietnam nowadays: Chau Bui, Decao, Son Tung MTP, …

    3. Video content 

      Along with the growth of e-commerce, video content is becoming increasingly attractive and forecast to dominate social media. Whether it’s short videos like videos on TikTok or Facebook / Instagram stories or long videos on Youtube, video content will prove its superiority in the future. By 2022, about 82% of online content will be in the form of video, according to research by Cisco.

      Besides, Livestream is also showing its usefulness in boosting sales for fashion brands. Many large-scale shopping events are being held on the Livestream, and this is becoming increasingly common.

    4. Distribution on e-commerce channels is increasingly popular

      In the past, people only preferred the traditional form of buying because they were afraid the risks that the products received were not the same as the photos, as well as the difficulties in return … Especially for fashion items, customers always want to come to a store, to try and buy.

      Recently, consumers have gradually turned to online shopping channels. The main reason is that the management quality of goods on e-commerce sites has been better. Stricter regulations on product images and descriptions help improve consumer trust with online clothing. Besides, Covid-19 is also the cause of the online shopping trend for fashion items. The quarantine and the restriction on crowds make people form online buying habits to limit the spread of the epidemic.

    5. Second-hand business

      Many Vietnamese fashionistas pay special attention to used products, also known as second-hand clothes. Instead of spending a large amount of money to buy new clothes and accessories which are expensive but only wear very little, many people choose old clothes and accessories as a way to save costs.

      Many people are also interested in second-hand clothes with the hopes of picking up branded items at a cheaper price. There are products which are used items, but still very new, with beautiful appearance and good quality. Second-hand fashion not only helps consumers save a decent amount of money but also ensures unique and strange costumes. Also, the use of second-hand items contributes to environmental protection and minimizes waste because fashion has always been considered the second polluting industry in the world.

      Many young people love second-hand clothes because they can transform discarded items into fancy outfits, allowing them to unleash their creativity. Old clothes are often imported from abroad, mainly with spacious and airy forms, so they are suitable with classic vintage, hip-hop style.

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