Fast fashion brands scale up for growth in Vietnam
|AEON’s new low-cost fashion brand hopes to compete with the raft of other options in Vietnam. (Photo: VIR)|
Despite being a rookie, My Closet also has clear development orientations, focusing on young customers, particularly female customers aged 16-24.
The main products will be everyday fashion items like t-shirts and shorts with diverse designs and bright and youthful colours.
AEON introduced My Closet to Vietnam as most popular global brands are already present, which could be seen as a somewhat risky move. Whether this brand can establish itself among giants like H&M, Zara, and Uniqlo in the current market remains to be seen.
“We aim to make it AEON’s first foray into fast fashion,” Yasuyuki Furusawa, general director of AEON Vietnam, told international media.
Yasuyuki explained, “Vietnam’s fashion market has a lot of potential as the population is young and loves new fashion trends. AEON Vietnam also wants to meet the changing tastes and needs of young people.”
My Closet tries to compete with established brands in the market with pricing and its available ecosystem. Its products are priced from $6-9, which is up to half of the asking price of popular Western brands.
“The production of My Closet is carried out by local manufacturers. In order to meet the changing tastes of customers, we regularly update new models and take advantage of the distribution system between our stores to reduce production costs, enabling us to offer goods at competitive prices,” Yasuyuki said.
In addition to My Closet, AEON is also developing other private labels for accessories, sports, and home appliances.
According to data from the Vietnam Retailers Association, there are currently more than 200 foreign fashion brands present here, accounting for more than 60 percent of the market share and ranging from affordable to high-end goods.
After five years, Swedish brand H&M owns 12 stores in five major cities in Vietnam. Elsewhere, Zara – owned by the world’s largest fashion group, Inditex – has been present in Vietnam since 2016, with two stores in Hanoi and Ho Chi Minh City.
Combined, the two Zara stores have brought in more revenues than high-end fashion retail chains such as Tam Son Fashion – which distributes Hermes, Bottega Veneta, and Boss – and MaiSon International Retail, which sells Mango, Topshop, Charles & Keith, and other brands.
Following Zara Vietnam’s success, Mitra Adiperkasa Group – Inditex’s partner in Indonesia and also the distributor of Zara in Vietnam – has brought other fashion brands to the country such as Massimo Dutti, Pull & Bear, and Stradivarius.
Meanwhile, Japanese brand Uniqlo has had an impressive expansion rate. Since its debut in Ho Chi Minh City in 2019, Uniqlo has increased the total number of stores to 11, including the largest one in Southeast Asia.
Tadashi Yanai, president of Uniqlo owner Fast Retail Group, said at the opening event of the first Uniqlo store that it plans to open 100 stores in the next 10 years.
In addition to easily recognised names, the fast fashion market has also recorded the presence of new brands such as Cotton On and Muji, along with international fashion brands that acquired domestic brands. And in 2020, Global Fashion, the owner of shoe and handbag brand Vascara, officially merged into Stripe International from Japan.
However, the market has also witnessed the retreat of new names, such as AVA Fashion of Mobile World Group (MWG) after just six months of launching. Similar to AEON, the company also outsourced products to a number of domestic companies. While AVA Fashion’s website is now closed, MWG has also launched shops for sportswear, mother and child products, and jewellery.
MWG CEO Doan Van Hieu Em admitted, “AVA Fashion initially planned to follow the path of Zara and H&M. However, things did not go smoothly as Vietnamese consumers did not get excited about the new brand.”
According to Statista, the apparel market in Vietnam is forecast to reach $7.33 billion by 2025 and there is still plenty of room for exploitation. Data from the Vietnam National Textile and Garment Group shows that every year, Vietnamese people spend about $4.3 billion on clothes, and the rate is expected to increase steadily by about 10 per cent annually.