Made-in-Vietnam fashion products have become more preferable by Vietnamese customers thanks to their good quality and materials, though the designs have not been really diversified.
Domestic products preferable
The shoes stall at Fashion Trade Fair
The fashion shop at No. 9 Tran Nhan Tong Street in Hanoi has been specializing in Chinese-made clothes for many years. Believing that Chinese-made products are still dominating the market, as they fit the pockets of the majority of Vietnamese customers, the owner of the shop admitted that more and more Vietnamese customers have favoured Vietnamese-made products.
The shop owner said that though selling Chinas products, she and her family members all use ‘made-in-Vietnam products.
She said that last week she spent VND 500,000 on trousers and a overcoat, and she has been happy with the purchase as the design was very good while the prices were reasonable.
Demand is driven by oil and gas prices. The profitability of individual companies depends on engineering expertise and efficient production. Oil and gas equipment - Large companies have economies of scale in purchasing. Small companies can compete effectively by specializing. The US industry is highly concentrated: the top 50 companies account for 80 percent of revenue.
The favour towards domestically made products by Vietnamese consumers could be clearly seen at the Fashion Trade Fair 2008 held in Hanoi several days ago. The trade fair gathered 150 companies, 90% of which are domestic fashion brand names.
The organizing board of the trade fair said that the unexpected increase in the number of visitors and buyers at the trade fair this year (10,000 visitors a day) shows the context of peoples tightening of their purse strings and has reflected the attractiveness of domestic fashion brand names.
Nguyen Van Liem, Head of the Hanoi branch of the Hai Phong-based Thong Nhat Shoes Company, said that with the prices of 70-120,000 per pair of sports shoes, the company made VND 40 million in turnover in the first day of the trade fair.
Lam Bich Ngoc, a staff member of Ace Life Insurance, was seen purchasing a lot of face-flannels at the trade fair. She related that in the past, she had to buy Chinese-made products at VND 15,000 per unit, but now she pays only VND 9,000 for Vietnam-made products, which have the same thickness and size.
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A lot of customers at the trade fair said that though domestic products do not have diversified designs, they have good quality and reasonable prices. Beautiful overcoats made by Vinatex, Phuong Dong, Nha Be and Viet Tien are priced at VND 200,000-400,000 , which prove to be affordable for Vietnamese customers.
Export companies eyeing domestic market
A lot of garment and shoe companies said that the domestic market with 86 million consumers is now their top priority, especially when the worlds economy has been falling into recession which has been affecting Vietnams exports.
Vu Hai Binh, Director of Da Lat Wool Company, who has been making products for export to Eastern European countries for the last 20 years, said that the domestic market has become more bustling with high demand from customers. She said that the taste of Vietnamese customers has become closer to the worlds, which makes the domestic market more and more attractive for the companies, which had been focusing on exports before.
The Thong Nhat Shoe Company once also focused on making products for export. However, after the equitisation, and thoroughly considering the taste of Vietnamese customers, the company decided to conquer the domestic market by developing the products with the prices of some VND 100,000 per product.
Hanoians still give prominence to the handiness and durability of sports shoes. The shoes with the prices of VND 200,000-300,000 per pair which are more fashionable but have the same quality will see the sales go more slowly than the products with more reasonable prices, according to Liem.
Nguyen Thanh Ngan from the Vietnam Textile and Garment Groups Market Survey and Promotion Division, said that not in all cases, Vietnamese customers prefer foreign made expensive products. In fact, Vietnamese customers have a high demand for domestically made products, while the problem is that whether domestic producers can meet their demand.
Admitting that domestic products have been attacked by cheap products from China, Phuong Anh, Marketing Director of Hoang Duong Textile Company, which owns the Canifa brand name, said that Vietnamese companies have advantages in technique, product quality and sale prices, but they still have to try more to diversify designs.
An official from the Garment No. 10 Company said that all garment companies have been returning back to the home market after many years of trying to penetrate foreign markets. They have only one month left to cement their firm position on the domestic market before the retail market is open for foreigners. The companies well understand that if they want to have good reputation on the international market, they first need to perform well on the domestic market.