(TIỂU LUẬN) ESSAY SUBJECT MICROECONOMICS THEME ANALYSIS OF FAST FASHION MARKET IN VIETNAM

Bộ Giáo dục Đào tạo Foreign Trade University ECONOMICS ==========000========== ESSAY SUBJECT: MICROECONOMICS THEME: ANALYSIS OF FAST FASHION MARKET IN VIETNAM Group Class Major Teacher NHĨM Hồ Chí Minh City, March 31st, 2022 TIÊU CHÍ ĐÁNH GIÁ: • Nội dung thuyết trình • Teamwork • Cách thuyết trình/ trình bày báo cáo • Trả lời câu hỏi bạn giảng viên CÁC NỘI DUNG CẦN THIẾT: • Trình bày vấn đề (Topic) nêu khái quát lý thuyết sở vấn đề • Nêu thực tế dùng lý thuyết để phân tích thực tế • Kết luận học rút • Tên thành viên nhóm phần làm việc người U CẦU: • Nhóm: - 10 sinh viên • Thời gian: tuần học cuối • Nội dung u cầu: dùng mơ hình cung - cầu để phân tích thị trường sản phẩm, dịch vụ VN Ví dụ: thị trường vàng, thị trường dầu mỏ, • Viết, in nộp báo cáo ( cho GV ) nộp online lên link • Bài báo cáo tối thiểu 25 trang A4 • Deadline: Trước 17:00 - 12/04/2022 • Thuyết trình lớp THƠNG TIN LIÊN HỆ: Đối với Giảng viên: • Họ Tên: Phạm Văn Quỳnh • Email: phamvanquynh.cs2@ftu.edu.vn Đối với Thành viên: • NHĨM Họ tên: Nguyễn Bùi Hồi Mỹ • Email: k60.2115027053@ftu.edu.vn MARKET RESEARCH - TEAM Number of members: Họ Tên: Đinh Thanh Ngân o MSSV: 2115027112 Họ Tên: Võ Trương Ngọc Trâm o MSSV: 2115027121 Họ Tên: Vũ Trí Huy o MSSV: 21150271134 Họ Tên: Nguyễn Bùi Hoài Mỹ o MSSV: 2115027053 Họ Tên: Trần Thị Khánh Hân o MSSV: 2115027044 Họ Tên: Huỳnh Ngọc Quế Trân o MSSV: 2115027123 Họ Tên: Nguyễn Hoàng Huy o MSSV: 2115027139 Họ Tên: Đào Nguyễn Minh Như o MSSV: 2115027063 NHÓM Lời The global fashion industry in general and Vietnam in particular, the fast fashion market has a great influence and helps the fashion industry to develop significantly Be aware of the benefits, potential opportunities and downsides of the fast fashion market in Vietnam Group would like to take great responsibility for analyzing the assumption of this market in Vietnam from the perspective of first-year students – Foreign Trade University - CSII Although, while working as a team, there were some inadequacies in data information, the 5th group still actively solved the difficulties that the team was facing and jointly pushed the team to complete the best work Đại diện nhóm - Lời cảm ơn To complete this report, Group would like to sincerely thank Mr Pham Van Quynh for his help to help group learn and provide data and materials during the course of study and the topic Because of the limited knowledge, in the process of doing and completing, we are not immune to mistakes, looking forward to receiving comments from you In particular, I would like to sincerely thank everyone in the group for uniting and building together throughout the past time, and collecting information to complete the work of each individual in particular and the report in general Đại diện nhóm -“Điều kỳ diệu xảy bạn biết tin tưởng vào thân Nếu bạn mơ ước Bạn làm được” – Walt Disney NHÓM 5 Table of Contents A ANALYSIS OF THE SIZE OF THE FAST FASHION MARKET AND COMPETITORS MARKET SIZE COMPETITORS: B THE GROWTH OF THE FAST FASHION MARKET .10 THE REVENUE OF FAST FASHION INDUSTRY IN VIETNAM: 10 THE RACE TO DOMINATE THE MARKET OF FOREIGN BRANDS: .11 “GOLD MINE IN VIETNAM”: 12 C MARKET TRENDS 12 INCOME AND MARKET: 12 SUSTAINABILITY: 12 MARKET STRATEGY: 13 MARKETING: 13 IMPACT OF COVID-19 ON THE FAST FASHION MARKET 14 D DEMOGRAPHICS AND SEGMENTATION 15 SEGMENT BY GEOGRAPHIC LOCATION 15 MARKET SEGMENTATION BY DEMOGRAPHIC 16 MARKET SEGMENTATION ACCORDING TO PSYCHOLOGY 18 MARKET SEGMENTATION ACCORDING TO BEHAVIOR 19 E PROFITABILITY OF THE MARKET 20 F THE DETERMINING FACTORS OF SUCCESS 24 PRODUCTS 24 PRICE: 25 COMMUNICATION: 25 HUMAN RESOURCES: 26 G DISTRIBUTION CHANNEL 26 H COST STRUCTURE 30 MATERIAL STRUCTURE: 30 GENERAL AND MANAGEMENT COSTS: 31 LABOR COST: 32 COST OF OPERATING THE STORE: 33 TAX: 33 NHÓM A ANALYSIS OF THE SIZE OF THE FAST FASHION MARKET AND COMPETITORS MARKET SIZE a Synopsis • Fast fashion is a term used to describe clothes that are produced quickly at a reasonable price and always keep up with the trends of the times • Some well-known brands such as H&M, Zara, Uniqlo constantly entice customers with new goods each week, month, and season b Manufacturers’ goals Develop new items in a short period of time at a low cost to suit customer demands as quickly as possible c Popularity It’s becoming more and more popular as a result of its low cost, the design of the item is always changing to catch up with the trends of the times Moreover, the number of items is not much, causing the demand of consumers' preferences to increase and accepting spending on demand also increases Create a challenge for manufacturers to constantly grasp the trend to create more unique points NHĨM d Benefits • High Profit Minimizes • Attrition Capture market opportunities with competitors • Attract to encourage consumption and review products • Constant innovation over time, strong development e Disadvantageous • Wasteful and easily replaced by ever-changing fashion • Pollution, poor product quality in some manufacturing places as well as poor working conditions • The majority of fast fashion production is produced from outside countries, causing a downturn in the U.S economic market as well as many other places based on intellectual property • Wisdom: Some designers claim that their design is mass-produced, losing its inherent value f Motivation • Diverse designs, eye-catching • Small quantity items increase the desire to love • Convenient because of the popularity, ease of contact, and sales NHÓM g Customers trends Prices Ages 12-18 Demands Trending and unique with a variety of clothes Stable price from designs, colors as well as trendy styles The trend 100,000VND-300,000VND of pursuing local brands 18-30 30-40 Stable long-term style, suitable for many Stable price from purposes Simple and more hobbyistic 500,000VND There is no need for seasonal prominence but The price is stable freely, tends to age, suitable for both color and style spending can be high and Youthful tendency low depending on the item COMPETITORS: a An overvi ew of the compe tition in Fast Fashio n: Fast fashion is challenging the traditional fashion industry with new collections and product lines launched in a seasonally orderly manner In fact, it's shopping website not surprising that brands are constantly launching will usually be new designs, even in just one week to catch up with given priority to new trends in the market be selected b Competition between brands: (Chart) • Therefore, most of Strengths: Each brand will have its own the companies strengths, not only in terms of product designs, have goods brands are often known to consumers with located in outstanding products A good example is expensive Uniqlo, known as one of the "Giants" in simple locations such as fashion in Japan and Asia When it comes to large shopping Uniqlo, people will immediately think of simple centers, clothing T-shirts, printed funny images suitable for shopping areas for customers who not have much time to young people, In choose clothes every morning Such T-shirts are addition, airlines not only easy to coordinate with other are also in the process of creating NHÓM online shopping • • items, but also easy to wash and ensure the quality of channels to the product Besides, one of the other prominent fast improve service fashion brands is, its linen shirt was once one of the quality as well as best-selling products of Southeast Asian countries, compete with because of the climate in this region, the company has brands in the same grasped the situation and succeeded in conquering industry customers Moreover, placing Price: The price of similar products often varies stores in central negligibly, so the Price will not be the reason to decide locations is also a whether the consumer has the choice to buy in that way to promote Company or not the brand, attract Convenience: Because of the era of technology 4.0, curiosity and consumers put convenience first Brands with the attract fashionable location of the goods as well as having an online properties.  • • • Promotion: Brands regularly work with well-known Formed very artists to bring their style closer to buyers For example, early, but it was in 2019, UNIQLO was a huge success with the UNIQLO not until the x KAWS collection, which sold out within minutes of its 1960s that really launch in China and around the world The launch event a time when the of the Collection caused a great disturbance in the region, fast fashion and it was because of that chaos that caused curiosity and industry stimulus of the product, generating a huge turnover for developed both sides significantly Link to the article: https://bitly.com.vn/qix6x6 "like a duck in Discountable: Discount Brands offer promotions to water" because attract rival customers: Black Friday discounts, vouchers, of its "instant" discount codes, discounts for new collections, nature (diverse Form, Model: The variant of the product includes color, designs that fit form, size, and style Each year, the average company trends and rotate launches more than 3000 products to meet the needs of continuously, the consumers The competition between brands is not small, they use all kinds of ways NHÓM price is not high) There are the reasons why they attract so to change products accordingly to pull customers many costumers.  towards them In the past, brands from Europe often Especially in the did not have size XS, but when introduced to Asia, Vietnamese they adjusted and supplemented to suit the human market, because organs of customers and make their customers the per income satisfied More than ever.  of the people is not high, for B THE GROWTH OF THE FAST FASHION MARKET them, the fashion brands are seen as "fast fashion" KOL aim viên for Nam Trun g fast fas Hình Rapid fashion consumption by occupation in different regions of Vietnam Based on Vietnam's career statistics in 2020, the n majority of users of fast fashion items are ite university-level or at least high school graduates ms Those who need to change a lot in fashion are KOL hio • Young or office workers and students make up the majority people: of fast fashion items as well as the population of Busy Vietnam On the contrary, workers and farmers with account for less in terms of consumption studying and Market segmentation according to psychology Currently, all over the world, the fashion industry is in working vogue and has the largest scale in the world part-time At this Therefore, the demand for fashion from each age, they individual is also high, Vietnam is no exception Fast gradually fashion is a new market, introduced to our country pay about 10 years, with the development skyrocketing attention and dominating the fashion market in Vietnam to their Vietnam is gradually developing and integrating The dress as market economy has pulled many new trends, and well as many new lifestyles different care for NHÓM themselv es more from the past Therefore, young people are often the ones who absorb those trends very quickly The psychology of each age is analyzed as follows: • • Adults: Belongin Youth: Enjoys outdoor activities, g to the meeting friends with a dynamic and two youthful style As a result, they often social classes are middle class and upper class As a In order to result, they have many different lifestyles and determine different professions Each profession often the profitability requires an improvement in appearance or a of the fast flexible change in fashion Therefore, fast fashion fashion is an easy market to choose from by • market, we people of this age will Middle-aged people: At this age, they tend calculate to dress in the right style and mature so according to they often turn to high-end items over fast the formula fashion They no longer follow the same of trend as young people profitability in Market segmentation according to behavior a economics Reasons for purchase as follows: - In the household: Fast fashion is used as a necessary item of each person, as well as also as gifts to give = In it: o Π: Profit of the firm - In addition to households: Agencies and businesses often choose this market to business o and develop under the new fashion model T b Fast Fashion Benefits is one of the largest consumer markets in the major fashion market It aims at simplicity in the R : T way you dress, the price is reasonable or the o constant change of fashion trends around the world t The fashion item is constantly updating the trends a and developing it to suit people of different ages l NHÓM E PROFITABILITY OF THE MARKET R e v e n − ue of the firm o TC: Total cost of the firm In order to determine the most accurate total revenue and give an objective view of the total, group would like to divide the fast fashion market into main groups: In 2017, fast fashion's Accessories, Apparel, Footwear The revenue of the fast profit was 6.6% from fashion market in Vietnam is 2,412 out of the total revenue online and 93.4% from of the world - 812,412 million USD offline 2018: There was a slight increase in online a Total number of users in each item: NHÓM purchases of 8.8% and a slight decrease to 91.6% Over the years, the garment industry is increasing in the number in Ofline In 2019, online of consumers In particular, the garment fashion item has the shopping profit was largest number of consumers and continuous growth (from 17.6 10.3% and offline was million - 2017 to 34.0 million - 2022) and the number of 89.7% In 2020: increase consumers in the group wearing accessories is the lowest and the percentage of profits strong growth in the period 2017 - 2022 (11.8 to 25.1 million) obtained from Online to For footwear, the number of consumers grew slowly over a 17.5% while Offline three-year period (2017-2019) and grew rapidly in the last years decreased slightly to of 2022 Thus, the chart shows the continuous growth of the 82.5% In 2021: continued fashion industry for the number of consumers This also shows increase in profits from that the demand for people's clothing is improving positively Online (22.5%) and there is a decrease in offline b The percentage of consumers' purchases of fashion products: (77.5%) In 2022, profits will be 21.4% (Online) and 78.6% (Offline) The impact of the epidemic and the development of technology 2017 to $15.87 2020 ) and an increase of nearly 100% in the last years should be from 2019 through social networking platforms, consumers tend to buy through e-comercial, NHÓM ($29.36 - 2022) For footwear items, there has been a decline in about years so the proportion of profits coming from online increases This has also been able to keep buyer demand and sellers' supply has seen a marked increase in recent years for the form of buying since 2017 (from $4.40 - 2017 to $ 3.78 - 2019 ) and the last years tend to go fast fashion products in particular and goods in general c Average revenue of each consumer with each item: up with almost double growth in 2022 compared to 2017 (7.53 2022) The chart has shown us that over the years along with the development of the country The demand for fashion goods has also increased to almost double the Fashion apparel still accounts for the highest proportion of consumer choices and has doubled to $41.31 in the four years from 2017.For accessories, levels and this confirms for consumer income has also caused the demand line NHÓM for the consumers are willing to spend twice as much on shopping for fashion fashion accessories to increase their personal self-esteem in three years (from $12.69– shift to the industry to right and the price of these products is also higher (specifically Products about times) d Revenue of each group of goods: This is important to determine the success of a brand The product must be good, shape a fashion style of its own, a separate From 2017 to 2018: Accessories and clothing items design, the tend to go up slightly from $351-$493 million quality of (clothing items) and $149 to $213 million (for the product accessories items) Footwear remained unchanged must be ($75 million) better than By 2020, all three items will increase sharply: other • From $493 to $959 million (clothing items) fashion • From $213 to $422 million (for clothing items) brands In • From $75 million to $142 million (for footwear items) addition, By 2022, it is expected to continue to grow rapidly for all three items: • Accessories items will increase by $314 million • Clothing items will increase by $478 million • Footwear items will increase by $98 million NHÓM F THE DETERMINING FACTORS OF SUCCESS the product must follow fashion trends Products are divided into schools: Short-term: Focusing on trend trading, making money seasonally In this way, just hit the trend, reasonable price, target the majority of customers and sell in quantity The rule is to hit fast, win fast because the life cycle of this way is very short Medium term: Similar to the short-term school, big brands what I accordingly, what trend I follow that trend This is suitable for brands that have just started without an idea of the product Just choose the right brand that is succeeding and copy and add more salt and reasonable price will be warmly received by the market However, using this method will not avoid comparison and difficulty breaking and without its own mark Long-term: Choose your own style and customer audience then come up with a design idea and produce a product with your own imprint and style Focus on continuous improvement and innovation so that competitors copy not in time and have to follow you Brands must be able to create their own trends and keep up with future fashion trends However, it is necessary to have expertise, sensitivity and understanding of customer thoughts because the risks for launching a new product are very high NHĨM • 25 Price: Targeting different audiences and objectives to come up with the right prices for the product The price should be enough to attract customers at that time and make an impression later on for the brand The price must be appropriate, not too high compared to the market but also ensure profitability for the store If the brand chooses to sell at a low price at the beginning and provide a stable product, the store will attract a lot of customers • Communication: It is a form of advertising that introduces fashion products to customers The goal of communication is to give the recognition and memorization of the brand name to customers Photos / videos: For the fashion industry, to achieve high efficiency, the image must make an impression on customers, focusing on the product In addition, the photography trend must also be eye-catching so that customers can remember the product of the store Social networking sites: With the current 4.0 era, the competition between brands is extremely fierce Instead of just offline promotion, online advertising such as Facebook, Instagram, Tiktok and sales sites such as Shopee, Lazada is extremely necessary for customers to access products faster especially in the age of development, consumers tend to consume more online Tricks: In order for customers to remember the brand name and store, brands should have policies to promote, discount and thank customers (long-term NHÓM 26 shoppers) Gifts are included when purchasing products at the store with the total invoice that the store gives for each price Human resources: • The staff must be professional and know how to grasp the psychology of customers Employees should always provide comfort when advising customers even when messaging through the website This will increase customer loyalty to the store G DISTRIBUTION CHANNEL The retail distribution channel is the conduit of the product from the manufacturer to the end consumer In the fashion business, a good distribution channel will have a big impact on the business Fashionable clothing produced should reach retail stores at the right time to impact consumers buying the brand's products Any delay in the supply of clothing to consumers can lead to major losses for the fashion brand There are three main types of distribution channels that manufacturers can choose from: Direct channel: This is the distribution channel where the retailer takes clothes directly from the manufacturer Not through intermediaries such as wholesalers, other agents In this channel, the manufacturer has full control over the distribution of its products, which makes it difficult for the retailer to buy the product in bulk However, these products are cheaper because they are of direct origin This can be a big advantage for fashion brands Indirect channel: NHÓM In this channel, the wholesaler or agent acts as an intermediary between the manufacturer and the retailer While this can offload the distribution to the manufacturer, the retailer pays a higher price for the goods to include the middleman's commission However, fashion brands can order in higher quantities from these intermediaries Hybrid channels: An alliance of direct and indirect distribution channels, a mixed channel is the basis of most B2B platforms In a combined channel, the manufacturer hires various distributors to advertise its products but still has control over the market This means that the manufacturer's agents advertise their products on different channels They then instruct any interested party to the manufacturer, who makes the final call In addition to using retail distribution channels, fashion houses should be interested in another fundamental aspect - the retail distribution strategy While the retail distribution channel is interested in how to get the product into the hands of consumers, the retail distribution strategy is more interested in how the product is marketed to consumers What is a retail distribution strategy and its different types A fashion brand uses a retail distribution strategy to market its products effectively, helping to increase sales A fashion brand should use the perfect retail distribution strategy to market its clothing to the target consumer and ensure a stable supply chain, proper storage, and efficient retail distribution What is a retail distribution strategy and its different types A fashion brand uses a retail distribution strategy to market its products effectively, helping to increase sales A fashion brand should use the perfect retail distribution strategy to market its clothing to the target consumer and ensure a stable supply chain, proper storage, and efficient retail distribution There are three retail distribution strategies that fashion brands can adopt: NHÓM In-depth distribution strategy: According to this strategy, fashion houses make their brand clothing widely available everywhere with the interest of consumers These may include multi-brand stores or other retail and exhibition venues This helps the fashion brand reach more audiences, increase brand visibility and provide impulsive buying opportunities, thereby increasing sales Selective strategic distribution This strategy is mainly implemented for products suitable for a select group of audiences Fashion houses that sell niche products have full control over the locations where their costumes are sold They can choose to sell their clothes in exclusive stores and some selective stores with their target customer base This helps the fashion house maintain its brand image When fashion brands choose retailers, they can control many different aspects such as product delivery and distribution channels Exclusive distribution An exclusive retail distribution strategy involves offering products only in limited locations, thus keeping the brand's products exclusive Fashion houses that sell high-end fashion products often use this distribution strategy to maintain the exclusivity of their products This works for high-end consumers because they are attracted to proprietary products and are not everywhere Fashion brands can choose their retail distribution strategy based on the type of clothing they business with, the target consumer, and the brand image they want to maintain How to improve the retail distribution of your fashion products: NHÓM Fashion brands should focus on different aspects of retail distribution to drive sales The coordination between these aspects will help their products to be circulated smoothly from warehouses to retail outlets Here are some ways that fashion houses can improve the retail distribution of their fashion products: Open communication with retailers: • Fashion houses should make an effort to build good relationships with retailers This open communication channel encourages retailers to focus on the fashion brand's products, thereby increasing sales This will be especially useful in case retailers have multiple brands in their stores Set goals in different markets • Fashion brands must be able to identify a market that does not bring in sales Trying to analyze the reasons and work towards the fix will help drive sales If new strategies don't work, they can focus on another area of growth Keep good relationships with channel partners • Good relationships with partners in the channel create a smooth and timely product line to the market Fashion brands should ensure that their products are easy and always on the market, never missing out on a customer's buying opportunity New market choices for existing products • Fashion brands should always look for new markets to drive their retail sales This can be done by conducting surveys and holding promotional events in new markets to determine the trends and preferences of the audience there NHÓM H COST STRUCTURE Material Structure: Today's fashion products have a lot of different sources of materials Traditional ingredients such as cotton, linen and leather are all derived from plants and animals But most fast fashion brands now tend to use artificial fabrics in the manufacturing process During the manufacturing process, the brands used around main raw materials in the operation of the product production process a Artificial fabrics: The materials for making artificial fabrics are derived from crude oils or fossil fuels 62% is the estimated figure of artificial fabrics in the production of fast fashion products in Vietnam – mainly polyester, plastic, acrylic polypropylene and elastane In addition, data on artificial fabrics used globally is predicted to grow by 7.3% in 2021 to 2025 b Cotton fabric: One of the oldest and best known ingredients is cotton Currently, cotton fabrics account for about 24% of the total market share available - 1,633 tons of fabrics - but the market of cotton has declined due to the market share of artificial fabrics growing too fast c Viscose Fabric: NHÓM These materials all come from natural materials such as bamboo or woody trees and the production process is like artificial fabric Currently, about 18.6 million tons are imported and used in Vietnam This figure is expected to rise to 8.1% per year until 2025 d Wool Fabric: Wool fabric production accounts for very little in the fast fashion school in Vietnam (about 1%) About 965,000 tons are imported annually into the Vietnamese market e Leather Fabric: It is one of the oldest materials in history used in accessories or shoes/slippers About 854,000 cows and other cattle are raised for the purpose of obtaining skin for use in the fast fashion industry each year f Different Fabric: Bast fibers, organic fibers, recycled fibers are sources of raw materials produced to meet the needs of sustainable raw materials Revenue from this market is not growing like other markets (about $13 billion per year) General and management costs: In addition to the cost of raw materials, each fashion product must have a general and management cost to ensure that the operation does not encounter any obstacles or difficulties before reaching the consumer's hands a Management staff expenses: NHÓM It is considered as all expenses that the enterprise must pay for business management personnel including salary, insurance, allowances, Of the management staff in the departments b Cost of management materials: Is the cost of repairs for tools or tools, stationery, materials for repairs in fixed assets? c Fixed asset depreciation expense: Reflects the wear and tear of fixed assets shared by the company, such as offices, managed machinery and equipment, homes, vehicles, and transmission materials d Taxes, fees, and charges It is the cost of taxes, land rent, other fees, and charges Labor Cost: It is a direct expense that a business must pay for wages and other benefits of employees compared to the number of jobs they complete in a certain fashion period related to the production of products or the provision of services Expenses included: a Salary: This cost is usually paid according to the number of hours or productivity of the worker to produce goods or provide services b Payroll tax: Includes all payroll taxes of employees involved in the production or provision of a certain service c Compensation for labor: It is the cost that enterprises often must pay for workers who have events in the labor process - often toxic industry groups: coal mining, petroleum, NHÓM d Social insurance: Is the amount that the enterprise must pay to the social insurance agencies of the government to ensure the productivity of the producer or employee Cost of operating the store: Overhead costs, or "general costs," are those associated with the day-to-day operation of a brand This cost does not include the cost of labor and materials directly Tax: Tax is a mandatory payment that individuals and enterprises must pay to the State and based on legal documents issued by the State It is not of the same value and will be returned directly to the taxpayer In particular, enterprises are required to pay the following taxes: • Business-license Tax • Value-added Tax • Personal Income Tax • Corporate Income Tax Export tax – Import of Raw Materials Sources ... seen as "fast fashion" that still a luxury item (not included in the mid-range foreign goods of item) Vietnamese people and the The revenue of fast fashion industry in Vietnam: increasing life):... .10 THE REVENUE OF FAST FASHION INDUSTRY IN VIETNAM: 10 THE RACE TO DOMINATE THE MARKET OF FOREIGN BRANDS: .11 “GOLD MINE IN VIETNAM? ??: 12 C MARKET TRENDS ... Use of the Internet of Things (IoT) • Artificial intelligence in 3D printed clothing design • Increase demand for artificial fibers • parties The global Impact of COVID-19 on the fast fashion market