Vietnam's garment businesses struggle for survival

06 Jul '12

2 min read

To reduce reliance on imported inputs, which raises the production costs of garment items beyond their export price, Vietnamese apparel and textile enterprises have been advised to check their material areas while devising their business plans.

Pham Xuan Hong, Deputy Chair of the Vietnam Textile and Apparel Association (VITAS), said Vietnamese garment firms now greatly depend on imported raw inputs, and procures around 90 percent of their cotton and 70 percent of fibre material requirements from foreign countries.

Mr. Hong said that as export markets have contracted due to reduced demand, VITAS is motivating domestic garment enterprises to develop local market, but in the absence of Government support, businesses are unlikely to succeed in tapping the same.

He said it would not be possible for local garment business to make in-roads in the domestic market, as long as counterfeit and low grade products continue to be available at shops and traditional markets.

Nguyen Ngoc Hoa, Deputy Chair of the Vietnam Retailers’ Association, said that Vietnamese firms are in a disadvantageous position in the retail industry, and are battling an unfair war. Compared to foreign retailers, who have strong financial abilities, superior management technologies and a capacity to bear losses for few years to develop market, Vietnamese retailers are not that big and they lack superior technologies as well.

Besides, in Vietnam, it is easy for foreign retailers to set up new retail points, growing their sales networks, enhance competitiveness and sub-siding domestic retailers, while dodging laws.

In this regard, the Vietnam Retailers’ Association has filed a complaint before the concerned Ministries and the Government, but a decision is still awaited.

Fibre2fashion News Desk - India

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