What Zara Vietnam shows at its first store in Vincom after a year has shown the incredible charm of the fast - fashion business school (fast fashion - instant noodle fashion). The impressive breakthrough of the market stemmed from the pent-up demand for imported goods at affordable prices, and dripping satisfaction from portable products.
Vietnam is in a period of economic transition, with profound changes in consumer behavior of customers. About 4-5 years ago, surveys from many prestigious international organizations identified that Vietnam's retail market needs a decade to develop. But so far, many experts have been really surprised by what they are witnessing.
Vietnamese people are very fond of foreign products
According to Mr. Pham Thai Binh, Head of Retail, Savills Ho Chi Minh City, Vietnam is always appreciated for the consumption of imported goods, regardless of whether the economy is adding or subtracting. "Fast fashion" with the outstanding feature of reasonable price is currently the fastest growing category.
Revenue of Zara Vietnam is currently in the top 5 best selling stores globally, Sau Zara, Inditex's "brothers" such as Stradivarius, Pull & Bear, Massimo Dutti also penetrate into the Vietnamese market, aiming for more. potential customers.
For H&M, Vietnam is the 5th country after Singapore, Malaysia, Indonesia and Thailand where this brand has a presence, and many consumers also expect that H&M will "make a story"?
The outstanding revenue from the seniors in the Vietnamese market is a strong motivation for other fashion houses like Uniqlo, Forever21, ... to penetrate the market in the coming time.
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Own sales strategy
Retail businesses operating in Vietnam are more agile to meet the daily needs of customers and offer prices that are more affordable to consumers.
To win the hearts of domestic consumers and compete with portable products, Zara's Indonesian management unit also applies a special price policy, lower than regional countries such as Thailand, Singapore, Malaysia, ... from 15-20%, with selected products. For the company, the motto that makes a pricing strategy is to survey the consumption and income of each market and to price products based on the amount of money that customers are willing to spend.
Its own strategy has made foreign units faster
Its own strategy has made foreign units faster
The "affordable" price policy to attract a large number of buyers has been applied by H&M in more than 3,000 stores in more than 53 countries. The wide network of suppliers and partners allows this brand to be affordable and without large spread across markets.
The price of H&M is also expected to be lower than Zara, and the goal of targeting the highest number of buyers is also reflected in its criteria for selecting a retail space with an area of 2,000-3,000 square meters of the company.
Not only prices, but also brands' designs are constantly changing. The handshake with famous designers such as Karl Lagerfeld or Balmain has brought a new position to the Swedish fashion house, in the "fast fashion" space.
Foreign retailers dominate the domestic market. In general, the retail market has opened up but this door is not really wide enough to aim at protecting local retailers.
According to estimates by the Hanoi Supermarket Association, about 50% of Vietnam's retail market share belongs to foreign businesses (DN). It sounds quite humble, but in reality, this number is overestimated.
If you do a comparison between Vietnamese and foreign companies, there will be a lot of difference. The characteristics of foreign enterprises are methodical, careful and strategic, long-term vision, meanwhile, Vietnamese enterprises are considered to be flexible and adaptable because they understand the habits and culture of consumers. use.
However, in the international playground, this flexibility is no longer an advantage, although that strength can be applied to a number of new markets in the provinces. If you want to develop sustainably, Vietnamese businesses need to build longer and farther strategies and focus more on building a team of professional personnel to prepare for this "race" that needs this endurance.
While domestic enterprises are struggling to find the way, capital ... foreign enterprises have skipped these steps and aim for market share - which seems quite "luxury" for domestic enterprises.
Another fact is that Vietnamese retail businesses are still doing the main business - including 2 phases: branding and selling. The reason for this situation is not that Vietnamese enterprises do not want to continue to develop and build sustainably, but mainly because the larger the scale, the higher the ability to get out of control.
When it is not possible to pass the period of saturation and decline, the leaders of domestic enterprises often make decisions to transfer and look for other opportunities.