Euromonitor Apparel and footwear in Vietnam analysis

APPAREL AND FOOTWEAR IN VIETNAM - ANALYSIS
Country Report | Mar 2019

EXECUTIVE SUMMARY

Market Sizes

Apparel and footwear experiences strong performance in 2018

Sales of Apparel and Footwear

In 2018, apparel and footwear in Vietnam recorded double-digit current value growth,
mainly due to higher living standards, a gradual increase in average incomes and strong
development of social networks. According to the General Statistic Office, the GDP of
Vietnam grew by 7% by the end of 2018. Therefore, over the review period, consumers
were increasingly willing to spend money on dining out, travelling and purchasing
apparel and footwear, even for premium brands.
During the review period, the strong performance by internet retailing was the most
significant factor contributing to the current value growth of apparel and footwear in
Vietnam. According to the Ministry of Information and Communication, the number of
internet users in Vietnam has increased dramatically from 50.3 million people in 2016
to over 64 million people by the end of 2017. This was mainly due to the government’s
policy to expand the internet network to rural areas across the country. In addition, the
government also wants to apply the internet and technology to various aspects of
society such as operation management, education and business due to convenience,
high accessibility and cost effectiveness. As a result, the strong penetration of the
internet has changed consumers’ shopping behaviour dramatically, including
movement from mass to premium products and online shopping. By the end of 2020,
the government aims to increase the number of people purchasing products through
internet retailing to 30% of the total population and is predicted to continue launching
policies to meet the expectation. Over the forecast period, the strong development of

modern channels and internet retailers will create huge opportunities for Vietnamese
consumers buying branded products from anywhere within the country at reasonable
prices.

Retail Value RSP - VND billion - Current - 2004-2023

102,998

Forecast

200,000

150,000

100,000

50,000

0

2004

2018

Sales Performance of Apparel and Footwear
% Y-O-Y Retail Value RSP Growth 2004-2023

10.9%

International brands start to penetrate Vietnam

As Vietnam became a member of various international organisations, especially the
Trans-Pacific Partnership and APEC, a number of new international brands entered the
country and received a huge welcome from Vietnamese consumers due to their brand
reputation and Western designs. These cities are usually the main target market of any
new international players because of their huge population as well as higher number of
mid- and high-income consumers. Moreover, as Vietnamese consumers have become
increasingly aware of the importance of improving their physical appearance and tend
to buy branded products, there was a gradual movement from purchasing economy
products to premium brands in large cities in 2018, especially Hanoi and Ho Chi Minh
City. Various multinational brands such Zara, H&M, Pull & Bear, and Stradivarius
entered Vietnam in the last two years of the review period and experienced healthy
current value growth, despite their high prices.
Over the forecast period, with a huge population of over 95 million people and higher
awareness of healthcare, Vietnam is becoming an attractive country for foreign
companies to invest in. For example, Uniqlo is expected to open its first store in Ho Chi
Minh in 2019.

2023

Forecast

20%

15%

10%

5%

0%

2004

2018

2023

Unbranded goods and counterfeits continue to dominate
Over the review period, due to their lower prices and increasing resemblance to
famous brands, unbranded products and counterfeits continued to take a large share of
sales away from legal apparel and footwear in Vietnam. Another reason for their
prevalence is their strong distribution networks throughout the country, with access to
traditional markets. Most of these goods are mainly imported from nearby countries
such as China and Thailand or made by small local companies or individuals.
Vietnamese consumers can easily buy counterfeit and unbranded goods from various
channels such as local stores, online retailers or open markets across the country, and
rarely face any obstacles or serious legal pressure. Overall, as the vast majority of
Vietnamese consumers are highly price sensitive, resisting the temptation of
counterfeit, unbranded and unauthorised products is unlikely for the foreseeable
future.

Sales of Apparel and Footwear by Category
Retail Value RSP - VND billion - Current - 2018

Growth Performance

Apparel
60,208.2

Footwear

42,789.6

Sportswear
7,918.3
0%

APPAREL AND FOOTWEAR

102,997.8

CURRENT
YEAR %
GROWTH

10%
% CAGR
2013-2018

15%
% CAGR
2018-2023

Social networks become most effective channel for advertising
products
In 2018, social networks became the most effective way for companies to interact with
new customers and increase value sales. Facebook remained the most popular social
network. Customers can easily update new products launched by companies and tend

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to decide after reading feedback from other users. Moreover, Facebook Livestream has
become a popular trend in Vietnam for promoting products to consumers due to its
entertainment, practicality and reducing concerns from customers. Each livestream
from celebrities such as signer Toc Tien or blogger Chole Nguyen can receive over
150,000 views and 3,000 comments from Facebook users. Most of these users are
mainly female, live across the country and are from any income segment.

Competitive Landscape
Company Shares of Apparel and Footwear
% Share (NBO) - Retail Value RSP - 2018
Viet Tien Garment JSC

7.9%

After Facebook, Zalo Group is a popular local social network and has become a regular
communication channel to Vietnamese consumers. In September 2018, Zalo created a
conference named “ Zalo Business” to notify companies and internet users about its
advertisements and effective selling methods through the Zalo network. In the future,
Zalo Group has decided to invest in developing and improving its Zalo Shop, Zalo Ads
and Zalo marketplace to optimise its interaction between companies and internet
users. Over the forecast period, social networks are predicted to be the most effective
way to advertise apparel and footwear. Together with a gradual improvement in the
number of internet users, busier and more stressful lifestyles will become two
significant factors contributing to the rapid value growth of internet retailing and
changing customers’ shopping behaviour steadily in the future.

Inditex, Industria de Di...

2.1%

Blue Exchange Co Ltd

1.2%

Binh Tien Dong Nai Imex ...

0.8%

H&M Hennes & Mauritz Vie...

0.7%

Kowil Fashion Vietnam JS...

0.6%

Viet Fashion Co Ltd

0.5%

Pierre Cardin SA

0.5%

Triumph International (V...

0.5%

Apparel and footwear predicted to record healthy growth

adidas Vietnam Co Ltd

0.4%

PVH Corp

0.3%

Punto Fa SL (Mango)

0.3%

Nike Inc

0.3%

Gap Inc, The

0.2%

Levi Strauss & Co

0.2%

Quadrille & Vera Interna...

0.2%

An Phuoc Garment Co Ltd

0.1%

Giordano International L...

0.1%

Kering SA

0.1%

Others

82.9%

Despite the tough competition from unbranded and counterfeit products, apparel and
footwear is predicted to experience positive current value growth over the forecast
period. The first contributing factor is the accelerating level of disposable incomes,
leading to higher living standards. Secondly, the increasingly strong influence from
social networks as well as the globalisation process have greatly enhanced Vietnamese
consumers’ standards in general and specifically in apparel accessories, showing
increasing interest in Korean or Western fashion styles. A greater amount of money is
being spent on these items through reliable sources such as modern channels and
online retailers, especially in big cities such as Hanoi and Ho Chi Minh.
Over the forecast period, apparel and footwear is expected to record healthy current
value growth due to gradual economic improvement and increasing living standards.
International agreements would help to increase Vietnam's reputation in ASEAN and
become an attractive country for foreign countries to invest. Hence, an increasing

number of international brands is predicted to enter Vietnam and attract a higher
number of consumers to buy branded products. The unit price of international brands is
predicted to marginally decrease due to reduced tariffs up to 0% for members within
TPP or APEC. This factor would help to stimulate the demand amongst Vietnamese
consumers in the future.

Brand Shares of Apparel and Footwear
% Share (LBN) - Retail Value RSP - 2018
Viet Tien

7.9%

Zara

1.7%

Explanations of words and/or terminology used in this report are as follows:

Blue Exchange

1.2%

Other terminology:

Biti's

0.8%

H&M

0.7%

Pierre Cardin

0.5%

Ninomaxx

0.5%

Triumph

0.5%

Owen

0.4%

Mango

0.3%

DEFINITIONS

GBO refers to global brand owner, which is the ultimate owner of a brand.
NBO refers to national brand owner, which is the company licensed to distribute a
brand on behalf of a GBO. The NBO may be a subsidiary of a GBO or it may be a
completely separate company. Share tables at both GBO and at NBO level are
provided in the report. Reference to shares in the report analysis is at NBO level.

SOURCES

adidas

0.3%

Sources used during the research included the following:

Levi's

0.2%

Summary Research Sources

Winny

0.2%

Vera

0.2%

Genera l Sta tis tics Office

Gap

0.2%

Minis try of Indus try & Tra de

Pull & Bear

0.2%

Vietna m Cha mber of Commerce & Indus try

An Phuoc

0.1%

Da i Su Ha ng Viet

Giordano

0.1%

Converse

0.1%

Others

84.0%

Official Sources

Trade Associations

Business Studies & Assistance Center

Gia y Da Viet
Vietna m Lea ther & Footwea r As s ocia tion
Vietna m Textile & Appa rel As s ocia tion
Trade Press

Ba o Ha Tinh

Increasing share

Decreasing share

No change

Ba o Moi
Bus ines s Review, The
Ca fé F
Công Ly News
Doa nh Nha n Sa i Gon
Dung Ha ng Viet
E-News pa per of Indus try & Tra de
Entrepreneur Forum
Ha Gia ng News Online

© Euromonitor Interna onal 2019

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Official Sources

Business Studies & Assistance Center
Sa i Gon Gia i Phong Online
Sa i Gon News
Sa igon Tiep Thi Online
Sa igon Times Online
Textile & Ga rment News
Tha nh Nien Online
Tha o So, The
Tin Moi
Tin Tuc Online
Tuoi Tre Online
Vietna m Bus ines s Forum
Vietna m Bus ines s News
Vietna m Economy Times
Vietna m Inves tment Review
Vina corp
VTC News

Source: Euromonitor Interna tiona l

© Euromonitor Interna onal 2019

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