ESSAY SUBJECT MICROECONOMICS THEME ANALYSIS OF FAST FASHION MARKET IN VIETNAM

Lời đầu tiên 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.. ANA

Foreign Trade University

Hồ Chí Minh City, March 31st, 2022

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YÊU CẦU:

• Nhóm: 5 - 10 sinh viên

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• Viết, in và nộp báo cáo ( cho GV ) và nộp online lên link

• Bài báo cáo tối thiểu 25 trang A4

• Deadline: Trước 17:00 - 12/04/2022

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THÔNG TIN LIÊN HỆ:

Đối với Giảng viên:

• Họ và Tên: Phạm Văn Quỳnh

• Email: phamvanquynh.cs2@ftu.edu.vn

Đối với Thành viên:

• Họ và tên: Nguyễn Bùi Hoài Mỹ

Lời đầu tiên

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 5 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 5

-

Lời cảm ơn

To complete this report, Group 5 would like to sincerely thank Mr Pham Van Quynh for his help to help group 5 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 5

-

“Điều kỳ diệu sẽ xảy ra khi bạn biết tin tưởng vào bản thân Nếu bạn có thể mơ ước

Bạn có thể làm được” – Walt Disney

Table of Contents

A ANALYSIS OF THE SIZE OF THE FAST FASHION MARKET AND COMPETITORS 6

1 MARKET SIZE 6

2 COMPETITORS: 8

B THE GROWTH OF THE FAST FASHION MARKET 10

1 T HE REVENUE OF FAST FASHION INDUSTRY IN V IETNAM : 10

2 T HE RACE TO DOMINATE THE MARKET OF FOREIGN BRANDS : 11

3 “G OLD MINE IN V IETNAM ”: 12

C MARKET TRENDS 12

1 I NCOME AND MARKET : 12

2 S USTAINABILITY : 12

3 M ARKET STRATEGY : 13

4 M ARKETING : 13

5 I MPACT OF COVID-19 ON THE FAST FASHION MARKET 14

D DEMOGRAPHICS AND SEGMENTATION 15

1 S EGMENT BY GEOGRAPHIC LOCATION 15

2 M ARKET SEGMENTATION BY DEMOGRAPHIC 16

3 M ARKET SEGMENTATION ACCORDING TO PSYCHOLOGY 18

4 M ARKET SEGMENTATION ACCORDING TO BEHAVIOR 19

E PROFITABILITY OF THE MARKET 20

F THE DETERMINING FACTORS OF SUCCESS 24

1 P RODUCTS 24

2 P RICE : 25

3 C OMMUNICATION : 25

4 H UMAN RESOURCES : 26

G DISTRIBUTION CHANNEL 26

H COST STRUCTURE 30

1 M ATERIAL S TRUCTURE : 30

2 G ENERAL AND MANAGEMENT COSTS : 31

3 L ABOR C OST : 32

4 C OST OF OPERATING THE STORE : 33

5 T AX : 33

A ANALYSIS OF THE SIZE OF THE FAST FASHION MARKET AND COMPETITORS

1 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

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

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

g Customers trends

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

Stable price from 500,000VND

30-40 There is no need for seasonal prominence but

tends to age, suitable for both color and style

Youthful tendency

The price is stable freely, spending can be high and low depending on the item

2 COMPETITORS:

a An overview of the competition in Fast Fashion:

Fast fashion is challenging the traditional fashion industry with new collections and

product lines launched in a seasonally orderly manner In fact, it's not surprising that

brands are constantly launching new designs, even in just one week to catch up with new

trends in the market

b Competition between brands: (Chart)

• Strengths: Each brand will have its own strengths, not only in terms of product

designs, brands are often known to consumers with outstanding products A good example is Uniqlo, known as one of the "Giants" in simple fashion in Japan and

Asia When it comes to Uniqlo, people will immediately think of simple T-shirts,

printed funny images suitable for customers who do not have much time to choose clothes every morning Such T-shirts are not only easy to coordinate with other

items, but also easy to wash and ensure the quality of the product Besides, one of the other prominent fast fashion brands is, its linen shirt was once one of the best-selling products of Southeast Asian countries, because of the climate in this

region, the company has grasped the situation and succeeded in conquering

customers

• Price: The price of similar products often varies negligibly, so the Price will not

be the reason to decide whether the consumer has the choice to buy in that

Company or not

• Convenience: Because of the era of technology 4.0, consumers put convenience

first Brands with the location of the goods as well as having an online shopping website will usually be given priority to be selected Therefore, most of the

companies have goods located in expensive locations such as large shopping

centers, clothing shopping areas for young people, In addition, airlines are also

in the process of creating online shopping channels to improve service quality as well as compete with brands in the same industry Moreover, placing stores in central locations is also a way to promote the brand, attract curiosity and attract fashionable properties. 

• Promotion: Brands regularly work with well-known artists to bring their style

closer to buyers For example, in 2019, UNIQLO was a huge success with the UNIQLO x KAWS collection, which sold out within minutes of its launch in China and around the world The launch event of the Collection caused a great disturbance

in the region, and it was because of that chaos that caused curiosity and stimulus of the product, generating a huge turnover for both sides

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,

• Form, Model: The variant of the product includes color, form, size, and style Each

year, the average company launches more than 3000 products to meet the needs of consumers The competition between brands is not small, they use all kinds of ways

to change products accordingly to pull customers towards them In the past, brands from Europe often did not have size XS, but when introduced to Asia, they adjusted and supplemented to suit the human organs of customers and make their customers satisfied More than ever. 

B THE GROWTH OF THE FAST FASHION

in the mid-range item)

1 The revenue of fast fashion industry in Vietnam:

0 200 400 600 800 1000 1200 1400 1600 1800

ZARA H&M

Pic 1 Revenue of Zara and H&M from 2016 to 2019

According to the report and analysis of experts in the field of fashion, fashion brands will "live well" in Vietnam for at least 3 years (due to the habit of using foreign goods of Vietnamese people and the increasing life):

o In 2016: Zara's total revenue (TR) reached 321 billion which the average revenue was 2.8 billion per day

o In 2017: TR up to 1.1 trillion 

o In 2018: TR soared to 133%, specifically 950 billionZara, H&M still saw an increase in revenue despite a slight drop in average sales per product in 2020 due to consumer spending cuts due to the effects of Covid 19

2 The race to dominate the market of foreign brands:

o By the end of 2020, more than 2020 foreign brands from mid-range to end had official stores and major international fast fashion brands such as H&M, Zara, Uniqlo, that dominating In contrast, no domestic enterprise has held more than 2% of Vietnam's fashion industry market share in recent years

high-o Lhigh-ohigh-ok at what Zara shhigh-owing in Vietnam shhigh-ows that the attractihigh-on high-of the business school makes fast fashion a threat to luxury brands After zara fever, the Vietnamese market was buzzing when on September 9, 2017, H&M launched in Ho Chi Minh City HCM That increases the pressure on domestic items Only in the first days of September 2017, three foreign brands opened in Vietnam: Stradivarius, Massimo Dutti of Spain, Hennes & Mauritz (H&M)

o Although the revenue of the fashion market in 2020 decreased by more than 10% compared to 2019 under the impact of the epidemic, through the media channels, online shopping became more popular as technology developed According to Nielsen's fourth quarter 2020 report, the fashion market will grow by 15-20% per year and continue to go up In particular: Lazada

accounts for more than half of the total revenue of this market, followed by Shopee, Sendo, Tiki,

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%). 

C MARKET TRENDS

1 Income and market:

The global fast fashion market is worth nearly $68,634.9 million in 2020, with a compound annual growth rate (CAGR) of 3.0% compared to 2015 The market is expected to grow from $68,634.9 million in 2020 to $163,468.5 million in 2025 The percentage is 19.0% The market is expected to reach $211,909.7 million in 2030, growing at a CAGR of 5.3% from 2025 Historical growth is influenced by increased foreign direct investment, growth

in emerging markets, progress of media along with the advancement of technology The global fast fashion market is valued at nearly $68,634.9 million in 2020, with a compound annual growth rate (CAGR), down 3.0% from 2015 The market size is expected to increase

by 19.0% from $68,634.9 million in 2020 to $163468.5 million in 2025 The market is expected to reach $211,909.7 million by 2030, growing at a CAGR of 5.3% from 2025 Historic growth has been driven by increased foreign direct investment, growth in emerging markets, media advancements and technological progress

2 Sustainability:

Market penetration

+ Encourage customers to buy more

+ Turn your competitor's customers into yours

+ 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

of the opportunities, the report enhances its business presence in the e-commerce sector through investments and initiatives to develop public solutions and cutting-edge technologies to integrate physical stores with online platforms or marketplaces Recommended for fast fashion companies Develop and launch an online store to improve customer accessibility and convenience The company's acquisition strategy focuses on expanding its business and business presence through strategic agreements and expansion plans and establishing stores and production facilities in developing regions

4 Marketing:

The introduction of marketing strategies for the fashion industry should always be based on unique and unique ideas for the rapid development of this industry Some specific industries can run the same or similar campaigns each year, but in fashion, in industries with very short cycles, marketers are always up to date with the latest trends and promote product adoption You need to think of a good creative way to do it The fashion industry's marketing strategy must be with the goal of driving the company's

sales and profitability, in addition to the creative elements needed to reach the target customer A good fashion marketing strategy needs to strike a balance between the creative elements of fashion, the needs of customers, and the company's profit-generating needs.

• Use of blockchain technology

• New ownership models

• Use of the Internet of Things (IoT)

• Artificial intelligence in 3D printed clothing design

• Increase demand for artificial fibers

5 Impact of COVID-19 on the fast fashion market

Factors that could hinder the growth of the fast fashion market in the future include poor working conditions, negative impacts on the environment, counterfeiting, restrictions on cotton production, and increased transparency about the impact of COVID-19

• The shift towards sustainability

• Savings in buying garments online

Supply chain disruptions

• Canceled orders and store closures

• Reduced consumer spending on fashion apparel

The big brands in the fast fashion market are names like Zara, H&M Group, UNIQLO, GAP, Topshop, Esprit, Primark, Fashion Nova và New Look Many brands are retailers and manufacturers However, in practice, the production of garments is often processed for third parties The global fast fashion market is segmented quite clearly with a large number

of small players The top 10 competitors in the market will account for 29.13% of the total market by 2020 The major companies in the market are Inditex (Zara SA), H&M Group, Fast Retailing (Uniqlo) và The Gap, Inc và ASOS Plc

D DEMOGRAPHICS AND SEGMENTATION

1 Segment by geographic location

The average Vietnamese consumer consumes from US$80 billion to US$171 billion per year Based on the data of the chart, we can see that most regions in Vietnam consume fast fashion items but there is a clear division between regions The North ranked first with about 43%, higher than the South with only 1% But the gap between the Central is about 28%, and 27% for the South Noticing, urban people concentrated in the South and North spend a large amount of money on the fast fashion industry about 2,000,000 VND - 3,000,000 VND / person

Số lượng tiêu dùng của thị trường thời trang nhanh tại

Việt Nam

PIC 2 Market share of fast fashion consumption between regions in Vietnam

2 Market segmentation by demographic

a Age

The study is based on data on people buying fast fashion items in 3 north, central, and south It is worth noting that the majority of buyers of this item are in the segment between the ages of 24 and 39 years old (adults) And then there are young adults with lower consumption than adults only about 7-10% This shows that the majority of the age of buying fashion items starts from 18-54 years old – the age when it is possible to earn an income in Vietnam

0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5

Thiếu niên Thanh niên Người lớn Người trung niên

PIC 3 Rapid fashion consumption structure according to the age of the regions in Vietnam