Interviews
Garment producers stand to lose even domestic markets
06 Jan '09
2 min read
Being ranked the ninth in ranking of the world's largest textile and garment exporter with one of the highest growth rates, Vietnam's textile and garment industry is seeing a potential to be in the world's top five in 2010. However, in the domestic markets, this very sector appears not to be doing so well in building brand names and competing with imported products.
The beginning of the new year has increased the worries of the domestic, in light of a recession in international markets and also not having a foothold in the local markets and competition from brands from China and other countries expected to increase, who also have been affected by the slowdown and are on the prowl for new markets.
In the last few years home grown companies have invested in brand building, but since it is a long process, the exercise is taking time. At the same time these companies cannot afford to ignore this 85 million strong consumer base, what with exports seeming to be getting difficult with each passing month.
Despite their best efforts, Vietnam's enterprises have been able to dominate only 30 percent of the domestic market. Moreover, a weak distribution system annuls all efforts on part of these companies. These companies have invested in technological advanced equipments and have access to an abundant and low cost labour.
But the effects are nullified as the weakness lies in the knitting and auxiliary industry. Nearly 70 percent of auxiliaries need to be imported and additionally there are no innovations in design. The only saving grace is the price competitive edge, but is not able to cater to the fashion conscious, high spending power young generation.
These companies also face the bleak prospect of their domestic markets being opened to foreign retail enterprises in 2009, after which the heat of competition is expected to increase. If the domestic industry does not pour investment in to brand building and come out with innovative designs, it stands to loose even the market share it has gained in the last few years.
The beginning of the new year has increased the worries of the domestic, in light of a recession in international markets and also not having a foothold in the local markets and competition from brands from China and other countries expected to increase, who also have been affected by the slowdown and are on the prowl for new markets.
In the last few years home grown companies have invested in brand building, but since it is a long process, the exercise is taking time. At the same time these companies cannot afford to ignore this 85 million strong consumer base, what with exports seeming to be getting difficult with each passing month.
Despite their best efforts, Vietnam's enterprises have been able to dominate only 30 percent of the domestic market. Moreover, a weak distribution system annuls all efforts on part of these companies. These companies have invested in technological advanced equipments and have access to an abundant and low cost labour.
But the effects are nullified as the weakness lies in the knitting and auxiliary industry. Nearly 70 percent of auxiliaries need to be imported and additionally there are no innovations in design. The only saving grace is the price competitive edge, but is not able to cater to the fashion conscious, high spending power young generation.
These companies also face the bleak prospect of their domestic markets being opened to foreign retail enterprises in 2009, after which the heat of competition is expected to increase. If the domestic industry does not pour investment in to brand building and come out with innovative designs, it stands to loose even the market share it has gained in the last few years.
Fibre2fashion News Desk - Vietnam
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