Vietnam textile and garment sector copes with e-commerce challenge

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Vietnam's textile and garment enterprises have set their sights on developing e-commerce. Photo: H. Diu.

Many international brands went bankrupt

According to the Vietnam Textile and Apparel Association (Vitas), with a population of nearly 100 million, Vietnamese textile and garment expenses account for 5-6 percent of total spending, equivalent to 3.5-4 billion dollars. This is a very bigmarket for Vietnamese businesses. Many domestic fashion brands have flourished. For example, Duc Giang Corporation with brands such as Paul Downer, DGC, S.PEARL, HeraDG and Forever Young.Besides building confirmed brands, Duc Giang Corporation also develops more chains, likeSmartsuits Tailor Shop, based on the foundation of Do Luong VestonGarment Factory of Duc Giang Corporation, transferred by Sumikin Corporation according to Japanese standards.

A number of other textile enterprises such as Nha Be Garment Company, Viet Tien, May 10 also constantly invest in improving designs and expanding product distribution stores to increase market share and improve efficiency. Enterprises' activities bring products directly to consumers. Mr. Than Duc Viet, General Director of May 10 Corporation, said in order to serve the needs of domestic consumers, May 10 Corporation offers fashionable products with many styles and abundant types of materials and designs following the trend of Vietnamese and international fashion.

However, the domestic and global retail industriesare facing unprecedented challenges, especially the rise of online retail stores. Accordingly, the reason that global fashion firm Forever 21 (F21) claims to have filed for bankruptcy is considered to restructure business operations in the context of customers increasingly changing traditional shopping habits to buy and sell online. Earlier this year, Gap also announced that it closed 230 stores this year. Arcadia Group – the parent company of Topshop and Topman – has also filed for bankruptcy protection in the US. In addition, many fashion brands have experienced a sharp drop in sales.

Facing the challenge

In Vietnam, it is praiseworthy that for many years, Vietnam's textile and garment industry has always been successful in promoting exports, with export turnover increasing over the years from 8-10 percent. However, in the domestic market, businesses do not dominate the home market and foreign fashion firms have the upper hand. According to experts, the export and marketing network is still a major weakness in Vietnam's textile and apparel supply chain. In particular, to avoid bankruptcy as the above-mentioned international brands, Vietnamese enterprises must focus their attention on e-commerce.

However, according to a survey of reporters, enterprises in the textile and garment industry have not paid adequate attention to building e-commerce websites and selling goods online. Specifically, many businesses have initially started selling goods or providing services online, but transactions are still slow.Information is incomplete or slowly updated and images are not eye-catching, so they are mainly aimed at introducing products and businesses. Therefore, the number of customers is not high.

In this regard, Mr. Than Duc Viet said, May 10's e-commerce website has been in operation for two years and has also grown. But building e-commerce is not easy, especially when May 10 itself builds the system. To overcome this drawback, May 10 also built a product information page on social networks, cooperating with professional domestic and international e-commerce sites such as Amazon, Lazada andAdayroi. However, he also said the commercial page is too large, there are many suppliers, so competition will be more fierce.

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For Duc Giang's side, this company said that it has also increased the use of e-commerce. Even, this enterprise has developed a distribution network strategy, balancing development of both traditional and e-commerce networks. For small businesses, building more traditional networks is not easy. Ms. Tran Hai Yen, Director of Bnew Garment Co., Ltd said that enterprises do not have enough manpower and financial resources to develop. Moreover, small and medium-sized textile and apparel enterprises mainly outsource for large enterprises, so they have to accept the challenges

In general, in the current conditions, Vietnam's textile and apparel enterprises are making efforts not only to stand out in the market but also to develop brand names. Therefore, businesses not only take advantage of the ability but also have to take advantage of technology as well as new business development directions to avoid downfall like famous and long-standing fashion brands.