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Vietnamese garment exporters turn to local market

27
Feb '12
Vietnamese garment exporters are now returning to domestic markets and are finding ways to compete with imported products in their home market. It is because Vietnam has a huge domestic market of around 90 million consumers, compared to around 20 million people in Vietnamese garment export market like Taiwan.

For example, in October 2011, Saigon Garment Co., or Garmex Saigon, made a comeback in the home market by associating with Blue Exchange, a fashion trademark of Blue Co.

The company intends to set up a retail centre for its fashion goods in HCM City's Tan Phu District. The alliance has also earned the company a right to use the Hong Kong office and other links of Blue Exchange to draw more customers and look for new sources for raw material, as it next plans to penetrate in the retail fashion market in other countries in the region.

Garmex Saigon's earlier effort to penetrate in the domestic market through launch of the Saga brand in 1997 could not succeed, and compelled the firm to shut its outlet network that existed from HCM City to Nha Trang, just within few years. However, the firm's current attempt to enter the domestic market is being looked upon as a more judicious, professional move.

According to analysts, so far, just few firms like Viet Tien or An Phuoc have succeeded in establishing a retail stores chain or building a brand for high-class fashion items in Vietnam. Likewise, there are only a few brands like Blue Exchange, Sea and Foci that have proved successful amongst young consumers with average income.

On the other hand some brands like Mattana of Nha Be Garment, or San Sciaro and Manhattan of Viet Tien, which intended to cater to domestic demand, are yet to get prominent presence.

Some garment firms are, however, still sticking to production for export markets rather than making in-roads in the domestic market, as they perceive that establishing a sound foothold in Vietnam requires production of fashion goods in lines with local market sentiments, and not in bulk as for export market.

Moreover, high cost of setting up retail shops in Vietnam and concerns about fake and counterfeit goods and sourcing of raw inputs are among the reasons impeding successful penetration of many firms in the local market.

In addition, there are some preconceptions that have robbed Vietnamese trademarks of an effective and extensive distribution channel, which could have otherwise helped the industry in enhancing its market share. Traditional Vietnamese markets with great scope of bulk sales are pre-dominantly ruled by China-made counterfeit goods bearing international labels. Also, items sold in these markets usually are considered to be inferior quality products, without trademarks.


Fibre2fashion News Desk - India


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