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Inflation eats into consumer clothing buying power
Apr '11
Garment manufacturers and suppliers are compelled to scale down their production, owing to a fall in demand for garment products in relation to high inflation.

Huong, a leading fabric supplier at HCM City's Soai Kinh Lam and Tan Binh wholesale markets, which specializes in fabric distribution to garment firms across the country, said that, presently the sales hardly match 30 percent of the sales during same period last year.

Initially, the three firms that Huong operates sold around one million metres of fabric per month, but now they hardly sell 200,000 metres of fabric per month.

Huong further revealed that, the 10 garment manufacturers who regularly buy fabric from her to produce garments, have scaled down their production. Thanh Hang, owner of a garment unit based in Tan Binh district, has cut down his workforce from 20 to 11 workers. Likewise, Hai, another garment manufacturing firm has also reduced its order size from previous 10,000 metres of fabric per month, to just 2,000 metres per month.

Vien, proprietor of a office which specializes in selling fabric and garment fabric on Tan Binh District's Ba Gia Road said that, usually April is the peak season for fabric sale, as this is the appropriate time for garment firms to purchase fabric for preparing garments for summer season, but presently the markets are very sluggish and just a few tailors have contacted them to place orders, he added.

Further, Nguyen Huu Toan, Director of Saigon 2 Garment Company's Sanding Fashion Center stated that, in spite of a rise in prices of all kinds of goods and services, earnings of regular workers have not risen, which compels people to cut down on their spending on items other than essential items like food, rice and vegetables.

The countrywide business of the fashion house registered a fall of 25 percent, during the review period. The Centre stated that, there has been a fall in demand for garments from consumers, as many of them have totally stopped purchasing and even those who are purchasing have also curtailed their demand, like for instance, the customers who initially used to buy three or four items are now buying just one.

Deputy General Director of Viet Tien Garment Corporation, Phan Van Kiet, also revealed that the growth rate of Vietnam's domestic brands in the local market has reduced significantly from last year's 40 percent to just 25 percent, now.

With regards to his firm, Kiet said that, production planning has been reviewed to avoid stockpiling.

Further, Sanding too stated that, it has been required to curtail the number of items for each design. Initially where Sanding produced 200 to 300 products for each design, now it produces just 100, Toan stated and added that, garment firms faced similar crisis in 2008, but this time the situation seems to be more serious. Fabric prices have gone up to almost double, while the material stocks have reduced significantly.

Kiet while speaking on the purchasing power said that, last year whereas one was able to buy four shirts for one million dong, this year he would be able to purchase only two to three shirts with that much money.

Also, the situation is forcing the buyers to curtail their expenses on clothes to spend money on food, as food prices have also gone up considerably.

Fibre2fashion News Desk - India

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