On average, every year Vietnamese people increase their spending on apparel by 10%: This proves that Fast Fashion is a fertile land.
AEON Retail Group has just launched a low-cost fast fashion brand – My Closet – at Binh Tan Shopping Center, Ho Chi Minh City. The highlight of this brand is the My Closet t-shirt line, which costs only about 6 USD ~ 150,000 VND.
This move attracted a lot of attention, not only wondering how AEON will compete in the already crowded and fierce game; but also by a retail “big man” – Mobile World Investment Joint Stock Company (MWG) of Mr. Nguyen Duc Tai – just “jumped out” after 6 months of joining.
Mobile World (MWG) hastily closed because of “disillusionment”
In October 2021, MWG launched 5 new brands including AVA Fashion. This is considered a strategy the Company has put in place to take advantage of the opportunity to expand into the post-Covid-19 retail market. With a population of nearly 100 million people and being ranked in the group of countries with the strongest middle-class growth of the decade, so despite the impact of the epidemic, Vietnam’s retail market according to MWG has never lost its strength. interesting.
“As someone who has been in the industry for a long time, MWG finds opportunities in the context that the retail market has many gaps after the epidemic waves, and in new fields, there is no real leader in the market. school ”, said the company representative.
Particularly in the fast fashion segment, MWG cited data from Asia Plus that the value of Vietnam’s textile and garment consumption per year is very large, reaching about 5 – 6 billion USD (120,000 – 140,000 billion VND). Thus, the fashion industry also has opportunities when Vietnam does not have too many names with wide coverage.
Therefore, MWG develops its own product line with the brand AVA Fashion. Similar to AEON, MWG also orders outsourcing at some domestic companies such as May 10. According to the strategy, if successful, AVA Fashion will add accessories such as shoes, bags, hats, etc., in addition to clothes.
However, after only 6 months, the AVA Fashion game officially ended. Sharing about this, CEO Doan Van Hieu Em said that the policy with 5 new chains will be tested: With effective chains, it will accelerate, while the potential segment will stop.
“Initially, AVA Fashion planned to follow the path of Zara and H&M: Promote R&D and design, then outsource. At the same time, AVAFashion will personalize the Vietnamese body better than foreign brands. However, things do not go smoothly when Vietnamese consumers are still not excited about the new brand, “ Mr. Hieu Em added.
AEON Vietnam jumps into fast fashion again
With AEON, with the same orientation to exploit the retail market as MWG, the fast fashion segment is one of the Group’s promotion strategies from 2022. It should be emphasized that developing private-label products was AEON’s previous orientation, and fast fashion lines such as T-shirts…, the Group has implemented a trial period of 2020-2021.
Commenting on the potential of this field, a representative of AEON Vietnam said that the fashion market in Vietnam is very attractive, because of the young population structure and they love new trends. The reality shows when many companies have entered this market, and famous Japanese brands such as Uniqlo and Muji are also present at AEON shopping centers in Vietnam.
“AEON Vietnam wishes to meet the changing tastes and needs of young people . AEON will deploy this field with a try & error strategy, ie experiment – adjust to find the most effective model “, AEON representative shared with us.
Currently, My Closet is aimed at young female customers (aged 16-24), the catalog currently has about 400 different products, focusing on everyday fashion products (T-shirts, shorts, etc.) … colors are mainly bright colors such as red, yellow).
Competitive advantage is the price, the discount rate AEON Vietnam builds up to 50-75% compared to competitors. Equivalently, the average price for the My Closet t-shirt line is only about 6 USD, ~150,000 VND – half of the same product of other brands is 300,000 VND.
My Closet targets young female customers (aged 16-24), the catalog has about 400 different products so far.
My Closet is ordering processing by local manufacturers, sales will take advantage of the distribution system between centers and stores of AEON to reduce production costs.
According to the outlined plan, in the coming time, the Group will expand at AEON Vietnam stores in the country, introduced on AVN’s e-commerce platform. Moreover, My Closet also soon has a roadmap to be exported to neighboring markets such as Malaysia…
In short, Vietnam is identified as a key market next to the host country Japan. By 2030, AEON will not only expand its operation scale, but also aim to build its own brands. As for My Closet, AEON aims to make the new brand the company’s first breakthrough in the fast fashion segment.
The land is crowded with people: A piece of cake is not easy to eat
Regarding the market, according to a recent consumer research report, Vietnamese people increase their spending by 10% on average every year: This proves that Fast Fashion is a fertile land.
Noting, more and more international brands are entering the Vietnamese market and dominating such as H&M, Zara, Uniqlo… Currently, there are more than 300 foreign fashion brands from mid-range to high-end brands that have official stores. in Viet Nam.
Spending a lot of money to exploit the market, Zara has clearly demonstrated the potential of the Vietnamese fashion market, when it was only in the first 4 months of its operation in Vietnam. According to data from VIRAC, in 2016, Zara Vietnam achieved a revenue of 321 billion VND, an average revenue of 2.8 billion VND/day. Then in 2017, the number skyrocketed to 1,100 billion. It is known that this year, Zara opened new Pull & Bear, Stradivarius, Massimo Dutti stores under the Zara system and opened more Zara stores in Hanoi. In the first half of 2018, the revenue of Zara Vietnam system continued to increase by 133% and reached nearly VND 950 billion….
Despite its growth, Zara since 2019 seems to be “weakened” gradually in the Vietnamese market. Not only by competitive pressure, but also by the challenge of changing shopping behavior, especially after Covid-19. Not only Zara, other foreign brands are similarly challenged.
As a result, according to data from Euromonitor, in the Vietnamese fashion market, no business holds more than 2% of the consumption market share. The largest market share is Adidas Group with 1.5% market share. In which, the top 3 enterprises are all foreign enterprises owning many famous brands.
The domestic brands that can survive today are all senior and rear-end enterprises. However, only focus on office groups such as Viet Tien, Biti’s, Canifa, …