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Vietnamese Fashion Market and Fashion Trends in 2021

CEO Tinh Phung
The Vietnamese fashion market has seen its fair share of ups and downs, especially in the wake of the global pandemic. In this article, we will delve into the latest trends and market insights, shedding...

The Vietnamese fashion market has seen its fair share of ups and downs, especially in the wake of the global pandemic. In this article, we will delve into the latest trends and market insights, shedding light on the challenges and opportunities that lie ahead.

Market Revenue Declined

The fashion market revenue in 2020 suffered a significant decline of over 10% compared to the previous year due to the impact of the epidemic. However, despite this setback, clothing sales still accounted for more than 50% of the industry's total revenue. The rise of media channels and online shopping platforms has been remarkable, with Lazada leading the way, followed closely by Sendo, Facebook, and Tiki.

Vietnamese Fashion Market Source: VIRAC GSO

The younger demographic, aged 25-34, emerged as the group that spends the most on fashion. This is hardly surprising, as young people have always been keen on investing in their appearance. Additionally, this age group is quick to grasp new trends and is greatly influenced by media and celebrities. Interestingly, women in Vietnam spent slightly more on fashion than men in 2020.

Fashion Trends in Vietnam Source: VIRAC Statista

The average revenue per product experienced a slight decrease in 2020, mainly due to consumers cutting down on spending. According to a survey by Asia Plus Inc. on Vietnamese fashion consumption behavior, price has become a more significant criterion than brand popularity. Furthermore, luxury goods sales witnessed a significant decline, primarily driven by the impact of the epidemic.

Luxury Fashion Market in Vietnam Source: VIRAC, Euromonitor

Market Share of Typical Fashion Companies

The Vietnamese fashion market has witnessed the entrance of numerous international brands, such as H&M, Zara, and Uniqlo, gradually dominating the scene. Currently, over 200 foreign fashion brands, offering mid to high-end products, have established official stores in Vietnam. This influx of international brands has put domestic fashion companies with a small market share under pressure.

International Fashion Brands in Vietnam Source: VIRAC, Euromonitor

According to data from Euromonitor, no single business in the Vietnamese fashion market holds more than a 2% market share. Adidas Group currently has the largest market share with 1.5%. The top three enterprises in the Vietnamese fashion industry are all international brands, highly popular among Vietnamese consumers.

Following these top three brands, several Vietnamese enterprises own familiar local brands like Biti's, Canifa, Viet Tien, and May 10. These domestic brands are mostly concentrated in the office wear segment. While some Vietnamese brands, such as Foci, have faced challenges and even closed down, the overall quality of products produced by Vietnamese enterprises is comparable to many international brands.

Backlog of the Vietnamese Fashion Market

There is no breakthrough to the world, including the region.

Despite being one of the major countries exporting textiles and garments worldwide, the Vietnamese fashion market is still relatively unknown on the global fashion map, including the region. Most textile products are outsourced and exported under foreign brand names. Despite having many talented designers recognized and highly appreciated by the international community, Vietnamese fashion is yet to gain widespread recognition. Efforts should be made to bolster the domestic fashion industry through strategic media partnerships to promote Vietnamese brands globally.

Inferior in the domestic market

The domestic fashion business has long lost its competitive advantage to international brands, even on home turf, due to poor design and small scale. Despite improvements in materials and designs over the years, the major fashion companies in Vietnam still heavily rely on outsourcing.

Suffusing of counterfeits

Counterfeit goods continue to plague the Vietnamese fashion industry. The situation has worsened with the extensive integration and digital transformation. Smuggling, fake stalls, and the sale of counterfeit famous brands have become increasingly sophisticated, with a significant presence in the online environment. Many supermarkets, fashion stores, and online fashion shopping channels in Vietnam openly sell products of unknown origin, boasting diverse designs at much cheaper prices than authentic items. While efforts have been made to crack down on this issue, counterfeit goods still flood the market, causing difficulties for both the fashion market and the Vietnamese fashion industry as a whole.

Spontaneous Business

The rise of spontaneous businesses has led to a lack of professionalism among many Vietnamese fashion start-ups. Though their first collection may sell well, they often struggle to maintain long-term sustainability in the market. The absence of suitable strategies for brand management and promotion in the long run is a significant challenge. Additionally, many young brands resort to copying designs from international brands and sell them at lower prices, solely aiming for short-term profits. This lack of a systematic and methodical approach to operating fashion brands hinders the effective development of the domestic fashion industry in Vietnam.

Fashion Trends for 2021

Sustainable Fashion

In recent years, the Vietnamese fashion market has witnessed the emergence of global fashion brands that prioritize sustainability. These brands offer the latest designs at affordable prices while ensuring environmental, social, and economic sustainability in their supply chains, production processes, and consumption patterns. With improving incomes and an increasing sense of responsibility toward the environment, young Vietnamese consumers are embracing sustainable fashion. In the coming years, the industry will focus more on materials produced from environmentally friendly sources, recycled materials, and reducing the use of harmful chemicals. Energy-saving production processes and ensuring fair labor conditions will also be prioritized.

The Popularity of Influencer Marketing

Influencer marketing has become a significant media strategy for fashion brands in recent times. Platforms like Facebook, YouTube, Instagram, and TikTok have become popular channels for Key Opinion Leaders (KOLs) to introduce new brands and designs. KOLs also often represent brands in lookbooks and promotional videos. Brands carefully select influencers who have a follower base that aligns with their target customers. Some famous fashion KOLs in Vietnam include Chau Bui, Decao, and Son Tung MTP.

Video Content

As e-commerce continues to grow, video content is becoming increasingly attractive and is expected to dominate social media. Whether it's short videos on platforms like TikTok and Facebook/Instagram stories or longer content on YouTube, videos are proving their superiority. Research by Cisco suggests that by 2022, around 82% of online content will be in the form of videos. Livestreams have also proven to be effective in boosting sales for fashion brands, with many large-scale shopping events being held through livestreams.

Increasing Popularity of E-commerce Distribution Channels

Traditionally, people preferred buying fashion items in physical stores to ensure the quality and fit of the products. However, recent improvements in e-commerce platforms have led to a shift in consumer behavior. Stricter regulations on product presentation and descriptions have increased consumer trust in online clothing purchases. The COVID-19 pandemic has further accelerated this trend, as people adopted online shopping habits to minimize the risk of spreading the virus. With the convenience of online shopping and better management of goods on e-commerce websites, more consumers are turning to online channels to satisfy their fashion needs.

Second-Hand Business

Many Vietnamese fashion enthusiasts are increasingly interested in second-hand clothing and accessories. Instead of buying expensive new items that are seldom worn, people opt for used products as a cost-effective alternative. Some individuals specifically search for branded items at more affordable prices. While being budget-friendly, second-hand fashion also promotes environmental protection and minimizes waste. It allows consumers to embrace unique and unconventional styles. Moreover, the creative transformation of old clothing items allows for self-expression. Vintage styles and hip-hop aesthetics often resonate well with imported second-hand clothes, which typically offer spacious and airy designs.

Conclusion

The Vietnamese fashion market has faced challenges and undergone transformations in recent years. The impact of the pandemic has reshaped consumer behavior, forcing businesses to adapt and embrace online channels. However, opportunities exist for sustainable fashion, influencer marketing, video content, and the growing popularity of e-commerce and second-hand fashion. With the right strategies and a focus on quality and innovation, the Vietnamese fashion industry can continue to thrive in the dynamic global landscape.

Please note: This article has been written based on the provided content and does not include external information or links.

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