ANALYSIS OF THE SIZE OF THE FAST FASHION MARKET AND COMPETITORS
MARKET SIZE
• 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
The increasing popularity of the item can be attributed to its affordability and ever-evolving design that aligns with current trends Additionally, the limited availability of products has heightened consumer demand and willingness to spend, posing a challenge for manufacturers to stay ahead of trends and innovate with unique features.
The analysis of the fast fashion market in Vietnam reveals significant insights into consumer behavior and economic trends Fast fashion brands have rapidly gained popularity due to their affordability and trend-driven designs, catering to the growing middle class This market is characterized by a high demand for quick turnaround times and a constant influx of new styles However, the fast fashion industry faces challenges related to sustainability and ethical production practices As consumers become more environmentally conscious, brands must adapt their strategies to incorporate sustainable practices while maintaining competitiveness Overall, the fast fashion market in Vietnam presents both opportunities and challenges that require careful consideration by businesses and policymakers.
• 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
• Small quantity items increase the desire to love
• Convenient because of the popularity, ease of contact, and sales
The fast fashion market in Vietnam is experiencing significant growth, driven by changing consumer trends and preferences As Vietnamese consumers become more fashion-conscious and seek affordable, trendy clothing, brands are adapting to meet this demand The rise of social media and online shopping platforms has further accelerated this trend, allowing for quicker access to the latest styles Additionally, sustainability concerns are beginning to influence purchasing decisions, prompting some brands to adopt more eco-friendly practices Understanding these dynamics is crucial for businesses aiming to succeed in Vietnam's competitive fast fashion landscape.
12-18 Trending and unique with a variety of clothes designs, colors as well as trendy styles The trend of pursuing local brands
Stable price from 100,000VND-300,000VND
18-30 Stable long-term style, suitable for many purposes Simple and more hobbyistic
30-40 There is no need for seasonal prominence but tends to age, suitable for both color and style
The price is stable freely, spending can be high and low depending on the item
COMPETITORS
a An overview of the competition in Fast Fashion:
Fast fashion is revolutionizing the traditional fashion industry by introducing new collections and product lines in a timely manner each season Brands are frequently unveiling fresh designs, sometimes within a single week, to stay ahead of emerging market trends This rapid pace of innovation intensifies competition among fashion brands.
Each brand possesses unique strengths that extend beyond product design, often becoming synonymous with standout offerings A prime example is Uniqlo, a leading name in simple fashion across Japan and Asia Uniqlo is instantly associated with its uncomplicated T-shirts, featuring humorous prints that cater to busy customers seeking quick outfit choices These versatile T-shirts not only simplify the dressing process but also pair effortlessly with a variety of styles.
The fast fashion market in Vietnam has seen significant growth, driven by consumer demand for trendy, affordable, and easy-to-care-for clothing Notably, one brand's linen shirt became a bestseller in Southeast Asia, highlighting the company's ability to adapt to the region's climate and preferences This strategic approach has enabled the brand to successfully capture the attention of local customers, emphasizing the importance of understanding market dynamics in the fast fashion industry.
When it comes to purchasing decisions, the price of similar products typically shows minimal variation, meaning that cost is unlikely to be a determining factor for consumers when choosing a company to buy from.
In the age of technology 4.0, consumer convenience is paramount, leading brands to prioritize strategic locations and robust online shopping platforms Companies often establish their stores in high-traffic areas like major shopping centers and youth-oriented retail zones to enhance visibility and attract customers Additionally, airlines are developing online shopping channels to elevate service quality and stay competitive within the industry Centralized store placements not only promote brand awareness but also pique consumer curiosity and appeal to fashion-forward shoppers.
Brands often collaborate with renowned artists to enhance their appeal to consumers A notable example is the 2019 UNIQLO x KAWS collection, which achieved remarkable success by selling out within minutes globally, including in China The launch event sparked significant excitement and chaos in the region, driving curiosity and demand for the product, ultimately resulting in substantial profits for both the brand and the artist.
Link to the article: https://bitly.com.vn/qix6x6
• Discountable: Discount Brands offer promotions to attract rival customers: Black
Friday discounts, vouchers, discount codes, discounts for new collections,
The product variant encompasses various attributes such as color, form, size, and style Each year, companies typically introduce over 3,000 new products to cater to consumer demands With intense competition among brands, innovative strategies are employed to stand out in the market.
The fast fashion market in Vietnam is characterized by brands adapting their products to meet local consumer preferences European brands, which traditionally did not offer size XS, have modified their sizing and styles to cater to the unique body types of Vietnamese customers This strategic adjustment not only enhances customer satisfaction but also helps brands attract and retain a loyal customer base in the competitive Vietnamese market.
THE GROWTH OF THE FAST FASHION MARKET
T HE REVENUE OF FAST FASHION INDUSTRY IN V IETNAM
Pic 1 Revenue of Zara and H&M from 2016 to 2019
The fast fashion market in Vietnam is experiencing rapid growth, driven by increasing consumer demand for trendy and affordable clothing This sector's expansion is influenced by various microeconomic factors, including pricing strategies, supply chain efficiency, and consumer behavior As Vietnamese consumers become more fashion-conscious, brands are adapting to meet their preferences, leading to a competitive market landscape Additionally, the impact of globalization and online shopping platforms is reshaping the way fast fashion operates in Vietnam, presenting both opportunities and challenges for local and international retailers Understanding these dynamics is crucial for stakeholders aiming to navigate the evolving fast fashion industry in the country.
Experts predict that fashion brands will thrive in Vietnam for at least the next three years, driven by the Vietnamese preference for foreign goods and rising living standards In 2016, Zara's total revenue reached 321 billion VND, averaging 2.8 billion VND per day This figure surged to 1.1 trillion VND in 2017 and further increased by 133% to 950 billion VND in 2018 Despite a slight decline in average sales per product in 2020 due to reduced consumer spending amid the Covid-19 pandemic, both Zara and H&M continued to experience revenue growth.
T HE RACE TO DOMINATE THE MARKET OF FOREIGN BRANDS
By the end of 2020, over 2,020 foreign brands, including major players like H&M, Zara, and Uniqlo, had established official stores in Vietnam, while domestic enterprises struggled to capture more than 2% of the fashion market share The entry of Zara into the Vietnamese market highlighted the growing threat of fast fashion to luxury brands, a trend further intensified by H&M's launch in Ho Chi Minh City on September 9, 2017, which led to increased competition for local products Despite a more than 10% decline in fashion market revenue in 2020 due to the pandemic, the rise of online shopping and technological advancements has driven growth, with Nielsen's fourth quarter 2020 report predicting a 15-20% annual increase in the fashion market, particularly on platforms like Lazada.
The fast fashion market in Vietnam is a significant sector, accounting for over half of the total revenue in the industry Major players include platforms such as Shopee, Sendo, and Tiki, which contribute to the dynamic growth and accessibility of affordable fashion options for consumers This market's expansion reflects broader trends in consumer behavior and economic shifts within the region.
3 “Gold mine in Vietnam”: o The average income of Vietnameses per year increased up to 10% spending on the demand for garments in
• Vietnam is a fertile land of foreign enterprises (the growth rate of the fashion industry reached about 20%).
MARKET TRENDS
I NCOME AND MARKET
The global fast fashion market, valued at approximately $68.6 billion in 2020, is projected to grow significantly, reaching $163.5 billion by 2025, reflecting a 19% increase By 2030, the market is expected to expand further to $211.9 billion, with a compound annual growth rate (CAGR) of 5.3% from 2025 This historical growth has been fueled by increased foreign direct investment, the rise of emerging markets, advancements in media, and technological progress.
S USTAINABILITY
+ Encourage customers to buy more
+ Turn your competitor's customers into yours
The fast fashion market in Vietnam has seen significant growth, driven by increasing consumer demand for trendy and affordable clothing This sector's expansion is influenced by various microeconomic factors, including supply chain dynamics, pricing strategies, and consumer behavior Additionally, the rise of e-commerce has transformed shopping habits, making fashion more accessible to a broader audience However, challenges such as sustainability concerns and labor practices also impact the market's future Understanding these elements is crucial for analyzing the fast fashion industry's role in Vietnam's economy.
+ Find out why you're still unsure of your purchasing decision and convince existing customers
Expanding and developing the market
As the market begins to mature, companies must find new markets for their products We are pioneering and entering new markets Some companies will choose to grow abroad, elsewhere
Product innovation plays a crucial role in business success, as it allows companies to adapt to market demands, cater to diverse consumer preferences, and enhance existing functionalities By developing unique and original ideas, businesses can stay competitive and relevant in a rapidly changing environment.
M ARKET STRATEGY
The report highlights the integration of virtual and augmented reality (VR/AR), blockchain technology, artificial intelligence in clothing design, and the Internet of Things (IoT) to enhance business opportunities in the fast fashion sector It emphasizes the need for companies to invest in e-commerce initiatives that seamlessly connect physical stores with online platforms, improving customer accessibility and convenience Furthermore, the acquisition strategy aims to expand the company's presence through strategic agreements and the establishment of stores and production facilities in developing regions, while also addressing the growing demand for artificial fibers and innovative ownership models.
M ARKETING
Effective marketing strategies in the fashion industry must prioritize unique and innovative ideas to foster rapid growth Unlike other sectors that may rely on repetitive campaigns, fashion marketers must stay attuned to ever-changing trends and encourage swift product adoption Creativity is essential in crafting these strategies, ensuring they align with the overarching goal of enhancing the company's return on investment.
The fast fashion market in Vietnam presents unique challenges and opportunities for businesses, requiring a strategic balance between creativity and profitability To effectively reach target customers, companies must develop innovative marketing strategies that resonate with consumer preferences while ensuring sustainable sales and profitability Understanding the interplay between fashion trends, customer needs, and profit margins is essential for success in this competitive landscape.
• Use of the Internet of Things (IoT)
• Artificial intelligence in 3D printed clothing design
• Increase demand for artificial fibers
I MPACT OF COVID-19 ON THE FAST FASHION MARKET
The future growth of the fast fashion market may be hindered by several factors, including poor working conditions, environmental degradation, the rise of counterfeiting, restrictions on cotton production, and heightened transparency regarding the impacts of COVID-19.
• Savings in buying garments online
• Canceled orders and store closures
• Reduced consumer spending on fashion apparel
The fast fashion market features prominent brands such as Zara, H&M Group, UNIQLO, GAP, Topshop, Esprit, Primark, Fashion Nova, and New Look While many of these brands serve as both retailers and manufacturers, garment production is frequently outsourced to third-party processors The market is distinctly segmented, with a significant presence of small players By 2020, the top 10 competitors were projected to hold 29.13% of the total market share, with major companies including Inditex (Zara SA), H&M Group, Fast Retailing (Uniqlo), The Gap, Inc., and ASOS Plc leading the industry.
The fast fashion market in Vietnam is characterized by rapid production cycles and a focus on affordability, catering to the growing demand for trendy clothing among consumers This sector has experienced significant growth due to the increasing influence of social media and a youthful population eager for the latest styles However, the fast fashion industry also faces challenges, including environmental concerns and ethical issues related to labor practices As consumer awareness rises, brands in Vietnam are beginning to adopt more sustainable practices to mitigate these impacts Overall, the analysis of Vietnam's fast fashion market reveals a dynamic landscape that balances consumer desires with the need for responsible production.
DEMOGRAPHICS AND SEGMENTATION
S EGMENT BY GEOGRAPHIC LOCATION
The average annual consumption of Vietnamese consumers ranges between US$80 billion and US$171 billion, with a notable preference for fast fashion items across various regions The North leads in consumption, accounting for approximately 43%, while the South follows with just 1% The Central region stands at about 28%, closely trailing the South at 27% Urban residents in both the North and South significantly contribute to the fast fashion market, spending around 2,000,000 VND to 3,000,000 VND per person.
Số lượng tiêu dùng của thị trường thời trang nhanh tại
PIC 2 Market share of fast fashion consumption between regions in Vietnam
The fast fashion market in Vietnam is experiencing significant growth, driven by changing consumer preferences and increasing disposable incomes This sector is characterized by rapid production cycles and low-cost garments, appealing to young consumers seeking trendy clothing However, the environmental impact and ethical concerns surrounding fast fashion practices are becoming more pronounced, prompting calls for sustainable alternatives Analyzing the microeconomic factors, such as supply and demand dynamics, can provide insights into the market's future trajectory and the potential for more responsible consumption patterns As Vietnam continues to integrate into the global fashion supply chain, understanding these economic principles is crucial for stakeholders aiming to navigate this evolving landscape.
M ARKET SEGMENTATION BY DEMOGRAPHIC
A recent study analyzing fast fashion purchases across northern, central, and southern regions of Vietnam reveals that the majority of buyers are adults aged 24 to 39 Young adults, aged 18 to 24, account for only 7-10% of purchases, indicating that the primary consumer demographic for fashion items spans ages 18 to 54, coinciding with the age group likely to have disposable income.
Thiếu niên Thanh niên Người lớn Người trung niên
PIC 3 Rapid fashion consumption structure according to the age of the regions in Vietnam
The fast fashion market in Vietnam has experienced significant growth due to rising disposable incomes and changing consumer preferences As more Vietnamese consumers seek affordable, trendy clothing, brands have adapted their strategies to meet this demand This increase in income has led to a greater emphasis on consumer spending in the fashion sector, driving competition among local and international brands The microeconomic analysis reveals that the interplay between income levels and consumer behavior plays a crucial role in shaping the fast fashion landscape in Vietnam.
From 2018 to 2020, average income varied significantly across age groups Teenagers aged 14-17, primarily reliant on family support, typically earned between 0-1,499,000 VND In contrast, those aged 18-23, who often balance studies with part-time jobs, generally earned a common salary categorized as type E.
In Vietnam, individuals aged 24 to 39, primarily workers and employees, typically earn between 7,500,000 VND and 14,999,000 VND, with family support often contributing to their spending power of 1,500,000 VND to 2,999,000 VND on fast fashion items Meanwhile, the income disparity becomes more pronounced among those aged 40 to 54, who fall into varying income classes, from grade B to A1 Notably, the fast fashion market appeals to both younger and middle-aged consumers, though purchasing habits do not necessarily correlate with higher income levels, as consumer preferences vary widely across different age groups.
Thiếu niên Thanh niên Người lớn Người trung niên
Hình 4 Income structure of people of different ages in Vietnam
The fast fashion market in Vietnam has experienced significant growth, driven by increasing consumer demand and a young, fashion-conscious population This sector is characterized by rapid production cycles and low-cost apparel, appealing to budget-conscious shoppers However, the rise of fast fashion raises concerns about sustainability and ethical labor practices, prompting a shift towards more responsible consumer behavior Understanding the microeconomic factors influencing this market is crucial for businesses aiming to thrive in a competitive landscape while addressing environmental and social challenges.
In 2020, Vietnam's fast fashion market was predominantly driven by university-educated individuals and high school graduates, with KOLs, office workers, and students being the primary consumers This demographic represents a significant portion of fast fashion users in the country, while workers and farmers contribute less to overall consumption.
M ARKET SEGMENTATION ACCORDING TO PSYCHOLOGY
The global fashion industry is thriving, with high demand for fashion in Vietnam as well Fast fashion, which emerged in the country about a decade ago, has rapidly gained popularity and now dominates Vietnam's fashion market As Vietnam continues to develop and integrate into the global economy, it embraces new trends and diverse lifestyles.
Học sinh, sinh viên Công sở Công nhân Nông dân KOL
Hình 5 Rapid fashion consumption by occupation in different regions of Vietnam
The fast fashion market in Vietnam is significantly influenced by the rapid absorption of trends by young consumers This demographic is particularly attuned to the latest styles, driven by their unique psychological characteristics and social dynamics Understanding these factors is crucial for analyzing the microeconomic aspects of the fast fashion industry in Vietnam.
• Youth: Enjoys outdoor activities, meeting friends with a dynamic and youthful style As a result, they often aim for fast fashion items
• Young people: Busy with studying and working part-time At this age, they gradually pay attention to their dress as well as care for themselves more
Adults primarily belong to two social classes: middle class and upper class, each characterized by distinct lifestyles and professions These professions often necessitate an enhancement in appearance or an adaptable approach to fashion Consequently, the fast fashion market becomes a convenient choice for individuals in this age group.
Middle-aged individuals often prioritize style and maturity in their fashion choices, gravitating towards high-end items rather than fast fashion As they move away from youthful trends, their clothing reflects a more sophisticated and timeless aesthetic.
M ARKET SEGMENTATION ACCORDING TO BEHAVIOR
- In the household: Fast fashion is used as a necessary item of each person, as well as also as gifts to give.
Agencies and businesses increasingly target the fast fashion market, capitalizing on its status as one of the largest consumer sectors in the fashion industry Fast fashion emphasizes simplicity in style and affordability, appealing to a wide audience by constantly updating trends to cater to diverse age groups.
The fast fashion market in Vietnam is characterized by rapid production cycles and a growing consumer demand for trendy clothing at affordable prices This sector's economic dynamics reveal how microeconomic factors, such as supply and demand, influence pricing strategies and market competition Additionally, the rise of e-commerce has transformed consumer shopping behaviors, driving further growth in the fast fashion industry However, this market faces challenges, including sustainability concerns and labor practices, which impact its long-term viability Understanding these microeconomic principles is crucial for stakeholders aiming to navigate the complexities of Vietnam's fast fashion landscape.
PROFITABILITY OF THE MARKET
In order to determine the profitability of the fast fashion market, we will calculate according to the formula of profitability in economics as follows:
In it: o Π: Profit of the firm o TR: Total Revenue 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 5 would like to divide the fast fashion market into 3 main groups:
The fast fashion market in Vietnam generates a revenue of $2,412 million, contributing to the global total of $812,412 million This sector encompasses accessories, apparel, and footwear, highlighting its significance in the fashion industry.
The fast fashion market in Vietnam is experiencing significant growth, driven by increasing consumer demand for trendy and affordable clothing This sector's expansion is influenced by factors such as globalization, rising disposable incomes, and changing fashion preferences among the youth However, the fast fashion industry also faces challenges, including environmental concerns and labor practices, which are prompting a shift towards more sustainable practices Understanding these dynamics is crucial for stakeholders aiming to navigate the complexities of Vietnam's fast fashion landscape.
The garment industry has seen significant growth in consumer numbers, particularly in fashion items, which surged from 17.6 million in 2017 to 34.0 million in 2022 Meanwhile, accessory consumers increased from 11.8 million to 25.1 million during the same period, indicating strong growth Although footwear consumer growth was slow from 2017 to 2019, it accelerated notably by 2022 Overall, these trends reflect a robust demand for fashion products and an upward trajectory in consumer engagement within the industry.
In 2017, fast fashion's profit was 6.6% from online and 93.4% from offline 2018: There was a slight increase in online purchases of 8.8% and a slight decrease to 91.6% in
In 2019, online shopping profits accounted for 10.3%, while offline sales dominated at 89.7% By 2020, online profits rose to 17.5%, with offline sales decreasing to 82.5% The upward trend in online profits continued in 2021, reaching 22.5%, as offline profits fell to 77.5% In 2022, online profits slightly decreased to 21.4%, while offline profits increased to 78.6%.
(Offline) The impact of the epidemic and the development of technology should be from
2019 through social networking platforms, consumers tend to buy through e-comercial,
The fast fashion market in Vietnam has experienced significant growth, particularly in online sales, which has increased the proportion of profits derived from digital channels This shift has effectively maintained consumer demand while simultaneously driving up the supply from sellers As a result, the average revenue generated per consumer for fast fashion items has seen a notable rise, reflecting the evolving purchasing behavior in the market.
Fashion apparel remains the leading choice among consumers, with spending rising to $41.31 in just four years since 2017 Additionally, consumers are increasingly investing in fashion accessories, with expenditures doubling to $12.69 over the past three years, driven by a desire to enhance personal self-esteem.
From 2017 to 2020, the price of fashion goods rose from $15.87 to $29.36, marking an increase of nearly 100% over two years In contrast, footwear prices initially declined from $4.40 in 2017 to $3.78 in 2019, but experienced significant growth in the following years, reaching $7.53 in 2022—almost double the 2017 figure This trend indicates that as the country develops, the demand for fashion goods has surged, reflecting an increase in consumer income that has driven the demand for these products.
The fast fashion market in Vietnam has experienced significant growth, driven by increasing consumer demand and a shift in industry dynamics As the market expands, the prices of fast fashion products have risen, often doubling compared to previous years This upward trend in pricing reflects the evolving preferences of consumers and the competitive landscape within the fashion industry Additionally, understanding the revenue generated by different categories of goods is crucial for analyzing the overall performance of the market.
From 2017 to 2018: Accessories and clothing items tend to go up slightly from
$351-$493 million (clothing items) and $149 to $213 million (for accessories items) Footwear remained unchanged ($75 million)
By 2020, all three items will increase sharply:
• From $493 to $959 million (clothing items)
• From $213 to $422 million (for clothing items)
• From $75 million to $142 million (for footwear items)
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
The fast fashion market in Vietnam is experiencing significant growth, driven by rising consumer demand for trendy and affordable clothing This sector's expansion is influenced by factors such as increased disposable income, urbanization, and the proliferation of social media, which accelerates fashion trends However, the fast fashion industry also faces challenges, including environmental concerns and labor practices, prompting calls for more sustainable practices Analyzing the microeconomic aspects of this market reveals crucial insights into consumer behavior, pricing strategies, and the competitive landscape, highlighting the need for brands to adapt to changing market dynamics while addressing ethical considerations.
THE DETERMINING FACTORS OF SUCCESS
P RODUCTS
To ensure a brand's success, it is essential for the product to possess exceptional quality, unique design, and a distinctive fashion style Additionally, aligning with current fashion trends is crucial for standing out among competitors in the fashion industry.
Products are divided into 3 schools:
Short-term trading emphasizes capitalizing on seasonal trends to maximize profits By identifying and leveraging current market trends at competitive prices, traders can effectively target a broad customer base and increase sales volume The key strategy is to act quickly and secure profits rapidly, as the lifespan of these trading opportunities is notably brief.
In the medium term, emerging brands can benefit by observing and emulating successful competitors, aligning with current market trends This approach is particularly advantageous for new brands lacking a clear product vision, as they can adopt effective strategies from established players while adding their unique touch and competitive pricing However, relying solely on imitation may lead to challenges in differentiation and brand identity, making it crucial to develop a distinctive mark in the marketplace.
To succeed in the long term, brands should define their unique style and target audience, develop innovative design ideas, and create products that reflect their distinct identity Continuous improvement and trendsetting are essential to stay ahead of competitors, who may struggle to keep pace It’s crucial for brands to not only establish their own trends but also remain attuned to evolving fashion dynamics However, launching new products involves significant risks, necessitating a deep understanding of customer preferences and market sensitivities.
The fast fashion market in Vietnam is rapidly evolving, driven by changing consumer preferences and increasing disposable incomes This sector emphasizes affordability and trendiness, appealing to a young demographic that values both style and price However, the environmental impact and ethical concerns associated with fast fashion are becoming more prominent, prompting calls for sustainable practices As competition intensifies, brands must innovate and adapt their strategies to maintain market share while addressing these challenges Understanding the microeconomic factors influencing this market is crucial for stakeholders aiming to navigate its complexities effectively.
To effectively target diverse audiences and achieve specific objectives, it is crucial to set the right product pricing The price should be competitive enough to attract customers initially while leaving a lasting impression of the brand It must strike a balance—being neither excessively high compared to market standards nor compromising the store's profitability By opting for a lower introductory price alongside consistent product quality, a store can successfully draw in a larger customer base.
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
In the fashion industry, impactful photos and videos are essential for capturing customer attention and enhancing product visibility To achieve high efficiency, imagery should focus on the product while also embracing current photography trends that are visually appealing, ensuring that customers can easily remember the store's offerings.
In the competitive landscape of the 4.0 era, social networking sites play a crucial role in brand promotion Online advertising platforms like Facebook, Instagram, and TikTok, along with e-commerce sites such as Shopee and Lazada, are essential for enabling customers to quickly access products As consumer behavior increasingly shifts towards online shopping, leveraging these digital channels has become vital for brands to thrive in today’s market.
Tricks: In order for customers to remember the brand name and store, brands should have policies to promote, discount and thank customers (long-term
The fast fashion market in Vietnam has experienced significant growth, driven by increasing consumer demand for affordable and trendy clothing This sector is characterized by rapid production cycles and a focus on low-cost manufacturing, which allows brands to quickly respond to changing fashion trends However, the fast fashion industry also faces challenges, including sustainability concerns and ethical labor practices As Vietnamese consumers become more aware of these issues, there is a growing demand for sustainable fashion alternatives Overall, the analysis of the fast fashion market in Vietnam highlights the need for a balance between consumer desires for trendy apparel and the ethical implications of production practices.
H UMAN RESOURCES
To enhance customer loyalty, staff must demonstrate professionalism and an understanding of customer psychology Providing comfort and support during interactions, even through website messaging, is essential for fostering positive relationships with customers.
DISTRIBUTION CHANNEL
The retail distribution channel serves as the essential link between manufacturers and consumers, significantly influencing the fashion industry's success Timely delivery of fashionable clothing to retail stores is crucial for maximizing consumer engagement and driving sales Delays in the supply chain can result in substantial financial losses for fashion brands Manufacturers can opt for one of three primary distribution channels to effectively reach their target market.
In a direct distribution channel, retailers acquire clothing directly from manufacturers, bypassing intermediaries like wholesalers and agents This approach allows manufacturers to maintain complete control over product distribution, although it can limit retailers' ability to purchase items in bulk Despite this challenge, products sourced directly from manufacturers tend to be more affordable, providing a significant advantage for fashion brands.
The fast fashion market in Vietnam is rapidly evolving, driven by increasing consumer demand for trendy and affordable clothing This sector's growth is influenced by factors such as globalization, changing consumer behavior, and the rise of e-commerce Fast fashion brands capitalize on the desire for quick turnover of styles, leading to competitive pricing and frequent inventory changes However, this growth raises concerns about sustainability and ethical production practices, prompting a shift towards more responsible consumption among Vietnamese consumers Understanding these dynamics is crucial for stakeholders in the microeconomics of Vietnam's fashion industry.
In the distribution channel, wholesalers or agents serve as intermediaries between manufacturers and retailers, facilitating the supply chain Although this arrangement allows manufacturers to delegate distribution responsibilities, retailers often incur higher costs due to the inclusion of the middleman's commission Nevertheless, fashion brands benefit from this setup by being able to order larger quantities through these intermediaries.
A mixed distribution channel is essential for B2B platforms, allowing manufacturers to maintain control while employing various distributors to promote their products This approach enables manufacturers to direct interested parties to them for final decisions For fashion brands, understanding both retail distribution channels and retail distribution strategies is crucial While retail distribution channels focus on delivering products to consumers, retail distribution strategies emphasize effective marketing to boost sales By implementing the right retail distribution strategy, fashion brands can ensure a stable supply chain, proper storage, and efficient distribution, ultimately enhancing their market presence and sales performance.
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:
The fast fashion market in Vietnam has experienced significant growth due to rising disposable incomes and changing consumer preferences This sector is characterized by rapid production cycles and affordable pricing, appealing particularly to younger demographics However, the environmental and ethical implications of fast fashion pose challenges that need to be addressed As awareness of sustainable practices increases, brands in Vietnam are beginning to adopt more responsible production methods Understanding the microeconomic factors influencing this market is crucial for stakeholders aiming to navigate its complexities effectively.
Fashion houses employ a strategy of making their brand clothing widely accessible through multi-brand stores and various retail venues, aiming to attract consumers This approach enhances brand visibility, reaches a broader audience, and creates opportunities for impulsive purchases, ultimately leading to increased sales.
This strategy is designed for niche products aimed at specific audiences, allowing fashion houses to maintain control over their sales locations By selecting exclusive and targeted retail outlets, these brands can uphold their brand image while effectively reaching their desired customer base Additionally, this approach enables fashion houses to manage various elements of product delivery and distribution channels, ensuring consistency in their brand presentation.
An exclusive retail distribution strategy limits product availability to select locations, enhancing brand exclusivity High-end fashion houses frequently employ this approach to appeal to affluent consumers who seek unique products that are not widely accessible This strategy effectively attracts discerning customers who value the rarity and prestige of exclusive offerings.
Fashion brands can choose their retail distribution strategy based on the type of clothing they do business with, the target consumer, and the brand image they want to maintain
How to improve the retail distribution of your fashion products:
The fast fashion market in Vietnam has experienced significant growth, driven by increasing consumer demand for trendy and affordable clothing This market is characterized by rapid production cycles and low-cost manufacturing, which appeal to the country's young population However, the fast fashion industry also raises concerns regarding sustainability and ethical labor practices As consumers become more aware of these issues, there is a growing trend towards sustainable fashion alternatives Understanding the microeconomic factors influencing this market is essential for stakeholders aiming to navigate its complexities and capitalize on emerging opportunities.
To boost sales, fashion brands must prioritize various elements of retail distribution, ensuring seamless coordination for efficient product movement from warehouses to retail locations.
Here are some ways that fashion houses can improve the retail distribution of their fashion products:
Fashion houses must prioritize establishing strong relationships with retailers to enhance communication, which in turn drives retailers to promote their products more effectively This strategy is particularly beneficial when retailers carry multiple brands, as it helps to distinguish the fashion brand's offerings Additionally, setting clear goals in various markets will further support sales growth and brand visibility.
Fashion brands need to identify underperforming markets and analyze the reasons behind low sales By addressing these issues and implementing effective strategies, they can boost sales If new approaches prove ineffective, brands should pivot their focus to other growth opportunities.
Keep good relationships with channel partners
Establishing strong partnerships within the channel is crucial for fashion brands to ensure a seamless and timely product delivery to the market By maintaining consistent availability of their products, brands can capitalize on every customer purchasing opportunity, ultimately enhancing sales and customer satisfaction.
New market choices for existing products
Fashion brands must continually seek new markets to boost retail sales Conducting surveys and organizing promotional events in these emerging markets can help identify local trends and consumer preferences.
COST STRUCTURE
M ATERIAL S TRUCTURE
Today's fashion industry utilizes a diverse range of materials, including traditional sources like cotton, linen, and leather, which come from plants and animals However, many fast fashion brands increasingly rely on synthetic fabrics in their production processes Approximately nine primary raw materials are commonly used in the manufacturing of fashion products, highlighting the shift towards artificial fabrics in modern fashion.
Artificial fabrics, primarily sourced from crude oil and fossil fuels, play a significant role in fast fashion production in Vietnam, accounting for an estimated 62% The most common materials used include polyester, plastic, acrylic, polypropylene, and elastane.
In addition, data on artificial fabrics used globally is predicted to grow by 7.3% in
Cotton, one of the oldest and most recognized materials, currently represents approximately 24% of the fabric market, equating to 1,633 tons However, its market share has been declining as the popularity of synthetic fabrics continues to rise rapidly.
The fast fashion market in Vietnam has experienced significant growth, driven by increasing consumer demand and a young population that values trendy and affordable clothing This sector's expansion has been influenced by global brands entering the market, which has intensified competition among local retailers Additionally, the rise of e-commerce has transformed shopping habits, making fashion more accessible to a broader audience However, the fast fashion industry also faces challenges, including sustainability concerns and the need for ethical production practices Understanding these dynamics is crucial for stakeholders aiming to navigate the complexities of the Vietnamese fast fashion landscape.
Natural materials like bamboo and woody trees are the primary sources for these fabrics, which are produced similarly to artificial textiles In Vietnam, approximately 18.6 million tons of these materials are currently imported and utilized, with projections indicating an annual growth rate of 8.1% in the coming years.
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:
Leather, one of the oldest materials in history, is commonly used in accessories and footwear Each year, approximately 854,000 cows and other cattle are raised specifically for their hides, which are utilized in the fast fashion industry.
Bast fibers, organic fibers, and recycled fibers serve as essential raw materials aimed at fulfilling the demand for sustainable resources Despite their importance, the revenue generated from this market is relatively stagnant, reaching approximately $13 billion annually, in contrast to other rapidly growing markets.
G ENERAL AND MANAGEMENT COSTS
In addition to raw material costs, fashion products incur general and management expenses essential for smooth operations prior to reaching consumers This includes the costs associated with management staff, which play a critical role in ensuring efficient production and delivery processes.
The fast fashion market in Vietnam has experienced significant growth, driven by increasing consumer demand for affordable and trendy clothing This sector's expansion is influenced by globalization and the rise of e-commerce, which have made fashion more accessible to the Vietnamese population However, the fast fashion industry also raises concerns regarding sustainability and labor practices, prompting discussions about ethical consumption As the market evolves, understanding the microeconomic factors that shape consumer behavior and industry dynamics is crucial for stakeholders aiming to navigate this competitive landscape effectively.
Management expenses encompass all costs incurred by a business for its management personnel, including salaries, insurance, and allowances Additionally, these expenses extend to the costs associated with management materials used across various departments.
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.
L ABOR C OST
Direct expenses for a business include employee wages and benefits, which are assessed in relation to the number of jobs completed within a specific time frame linked to product production or service delivery.
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,
The fast fashion market in Vietnam has seen significant growth, driven by increasing consumer demand for trendy and affordable clothing This sector's expansion is influenced by factors such as globalization, rising disposable incomes, and the youth demographic's inclination towards fashion However, the fast fashion industry also faces challenges, including sustainability concerns and the impact of rapid production cycles on the environment Analyzing the microeconomic aspects of this market reveals the interplay between supply and demand, pricing strategies, and consumer behavior, highlighting both opportunities and obstacles for businesses operating in Vietnam's dynamic fashion landscape.