Vietnam is one of the fastest growing economies of the South-East Asian countries. Acquisition of WTO membership by Vietnam has boosted up the growth prospects for its textile and apparel industry. Increasing fashion consciousness of the Vietnam consumers also boost the market of branded apparels. A recent research report of the country's retail industry scenario states that Vietnam apparel market is estimated to grow at a CAGR of 15% by 2012.
Vietnam has acquired the WTO membership after a 12 year wait, and this gives the country greater access to international markets. Industry analysts positively assert that, this will boost the country's exports, especially in the textile sector and attract more investment. On the other hand, some critics also argue that the increased competition will affect the local manufacturers.
Domestic market for branded apparels:
Domestic garment sales for the country have recorded a growth rate of 15% per annum, accounting for one fourth of the total production of the country. Domestic market is estimated to be around $4.5 billion USD, and is expected to grow to reach $6 billion USD by 2010. Apparel market of the country is export-oriented, and demand for branded and quality garments within the country also keeps rising simultaneously. Growing presence of branded apparel in big cities of the country has supplemented to the growth of this sector. Notable fashion brands such as Giordano, D&G, Gucci, Mango, Bossini and Valentino have established successfully in the Vietnam market, and have a good response from the customers.
In an exclusive interview with &sec=article&uinfo=<%=server.URLEncode(1752)%>" target="_blank">Fibre2Fashion, Mr. Le Quoc An, Chairman, Vietnam National Textile Garment Group (VINATEX), goes into raptures over the performance of Vietnam textile industry during the past year. He says, "Despite of the fact that the year 2008 came with challenges including global financial crisis, fierce competition with textile and garment powerful countries, domestic high inflation, labor fluctuation, the first 10 months of the year 2008 witness 7.6 billion USD in textile and garment export, a growth of over 20% year-on-year."
The biggest market challenge for Vietnam comes from China both at the domestic and the global market. It is believed that local brands were not able to keep pace with the aspirations of the younger generation in terms of design and quality in which China is better off. High end products will feel the heat of recession more than mass consumed products in which China has a competitive edge. Branded apparel sector in Vietnam will also face price competition in global markets from its competitors'.
Apparel industry is the largest industrial employer, and the second largest export industry in Vietnam. The country is already a low-cost apparel supplier to many countries in the EU. If free trade efforts prove successful, it is poised to become a big apparel source for US. Today, Vietnam is on the radar screen of the global apparel market, having the focus of many international brands. It is also being considered as a global export power house.