Footwear manufacturers plan comeback to conquer home market
Though only around 10 Vietnamese footwear brands exist in the home market and each holds a modest 2 percent of market share, the products have begun conquering the local consumer market.
With mid-range prices, and a design center and workshop in Brazil, Vascara has great advantages in the Vietnamese market. As the brand has become better known to youth in Vietnam, Vascara has opened over 80 shops in large cities and provinces.
More and more 100 percent Vietnamese brands have appeared in the market recently. However, the investors prove to be wise enough to give ‘western’ names to their brands, such as Dolly, Juno, Sablanca, Bejo, Mirrabella, Hodono and Evashoes, to avoid repeating the mistakes made by predecessors such as Hanh Dung, Hong Thanh and Dong Hai.
The common characteristic of Vietnamese brands is that they target ordinary people with mid-range prices and avoid the high-end market, where small and medium enterprises don’t have advantages.
A branding expert commented that Vietnamese brands won’t have many opportunities to succeed in the high-end market, because consumers won’t pay high prices for Vietnamese brands. High income earners spend big money to show off their class, and Vietnamese brands don't help them do this.
Vietnamese brands have attracted consumers in the mid-end market segment thanks to high quality and reasonable prices. Domestic manufacturers have high skills as they have been doing outsourcing for foreign brands for many years.
However, since most Vietnamese brands target the mid-end market segment, the competition among them is stiff, especially when foreign brands target the market segment that includes Zara, H&M, Top Shop and Uniqlo.
Do Thai Thuc Uyen, manager of Mirrabella, said business performance is satisfactory with the growth rate of 10-15 percent because its holding company does outsourcing for its foreign partner.
The big problem now for Mirrabella is in the development of the distribution network. Since the retail premises rent is high and Mirrabella is just a small brand, it is difficult for them to enter large shopping malls. They have had only three shops after three years of development.
Janny Thuy Tran, director of Vertex Co, said that there was no big difference in the quality and design among Vietnamese brands. The competitive edge lies in financial capability which helps brands advertise their products.
Juno shows the power of financial capability. Juno has been in the market for 10 years, but it became well known only in the last two years after receiving investment from Seedcom in finance and technology.
Kim Chi, VNN