Textile and Garment 2009 to Flexibly Keep up the Market Share

Vietnam’s apparel sector has succeeded from reclaiming the domestic market as well as expanding exports to some new markets such as Africa, North Latin American. To date, apparel products branded Viet Tien, Garment 10, Nha Be, Viet Thang are famous to not only domestic consumers but also to consumers in the Association of Southeast Asian nations (ASEAN).

Garment Products Return Back Vietnamese Consumers

In front of the difficulties arising from the economic downturn, Vietnam’s apparel sector has intended to seek new markets and focus further on the domestic instead of absolutely depending on traditional markets like the US, EU. As a result, the domestic consumption of textile and garment products in the ten months of 2009 increased 18 percent against the same period of last year. The apparel sector targets to raise the rate to 28 percent-30 percent by the end of this year.

Vu Duc Giang, vice chairman of the Vietnam Textile and Apparel Association (Vitas) and General Director of the Vietnam Textile and Garment Group (Vinatex), said a lot of domestic producers are paying attention to promote marketing activities in big cities, plus with campaigns to bring products to rural areas and expand distribution network of goods to remote areas. Particularly, at the countryside market, made-in-Vietnam apparels have promptly gained trust with customers thanks to acceptable prices, nice designs and good quality. Giang also unveiled that the sector’s total investments for the domestic trade promotion is between VND6 billion and VND7 billion.

Currently, the supermarket chain Vinatex Mart, shops of famous trademarks such as Sanding, F.house, An Phuoc, Thai Tuan, and Foci, have been present at many districts and even communes in the country. Especially, the Vinatex Mart has opened 80 supermarkets in 22 provinces and cities nationwide. In addition, Vietnamese apparel enterprises have paid special attention to build their trademark as well as the network of retail sales in the domestic market. For example, the Nha Be Garment General Company has spent VND12 billion for the development of trademark, Giang said.

A series of Vietnamese producers have achieved beyond their expectations when they refocused their attention on the domestic market. In the ten months of this year, Viet Tien’s revenue from the domestic market reached VND560 billion compared to the figure of VND460 billion of last year. Nha Be Garment reported VND380 billion in revenue from the domestic market in the period compared to VND220 billionof last year. Garment 10 also earned approx VND160 billion, doubling the figure of VND82 billion in 2008. Meanwhile, Phuong Dong garment also made revenue of VND100 billion in the domestic market.

Export Overcomes Difficulties

Giang affirmed that although facing difficulties in 2009, the garment and textile sector’s export turnover will still present an on-year rise of 1 percent-3 percent or US$9.15 billion-US$9.2 billion. The sector targets to earn US$10.5 billion from shipment next year.

Since exports to the traditional markets narrowed, many enterprises have actively sought new markets. Thus, in the ten months of this year, Vietnamese apparel exports to South Korea increased up to 50 percent from a year earlier, to Arabian Saudi 23 percent. Vietnam’s apparels have also been bought in ASEAN nations, Western Europe, North Africa and some former communist bloc countries.

“New breakthroughs in the sector require the introduction of new products to foreign markets. The fiber sector has represented a record growth of 165 percent. Many fiber enterprises have exported up to 80 percent of their output. In addition, Vietnam has initially exported clothes to Middle East nations and received good feedback, Giang said.

In September, the Viet Tien Garment and Textile General Company exported the first batch of apparels to Pakistan and continued to receive orders with the larger volume. Last November, Viet Tien scheduled to open its exclusive agent in Laos’ capital city of Vientiane. The company plans to open similar shops in Malaysia, Singapore and Indonesia in 2010.

Le Tien Truong, Vice Director of the Vietnam Textile and Garment Group (Vinatex) assured focusing on the domestic market or seeking for new import markets is the sector’s strict and long-term strategy, not the temporary measure to cope with the reduction of exports to markets of EU, US and Japan. However, he said, it is not completely true that Vietnamese exporters will earn remarkable profits at new markets. “Cambodia with a population of nearly 14 million people and a low income per capita is not able to become a huge market of Vietnamese apparels. As Viet Tien gets access to the market, other apparel producers will be difficult, Truong said. Thus, he analyzed, other enterprises should focus on developing products which are different from Viet Tien’s products in the Cambodian market.

In 2010, the Vinatex will concentrate on investing and producing material areas and clothes for exports. Giang said the group has developed cotton trees and other crops for the textile and garment sector and so far set up three farms of cotton. The cotton joint stock company has ordered the plant research institute to promote a research subject of high quality cotton and cooperate with Cambodia to grow cotton trees.

Vinatex has been investing and carrying out fiber polyester joint venture projects in Ninh Thuan province and Dinh Vu in Haiphong city. Besides, the groups’ affiliates have invested in weaving plants such as Viet Thang, Nam Dinh Textile, Vinh Phu Textile.

With this development orientation, the garment and textile sector expects to meet the localization rate of 70 percent and 80 percent by 2015. However, weaving is an existing challenge which needs the support of foreign investors. The whole sector is aiming to shift orders from processing to Freight On Board (FOB) as well as designing models by themselves and developing the country’s fashion industry.

Tags: Vietnam Textile and Garment