Vietnamese underwear firms lose market to foreign goods

Vietnamese underwear enterprises are dying slowly because they cannot compete with smuggled cheap Chinese products with false labels of origin.

Vietnamese underwear enterprises are dying slowly because they cannot compete with smuggled cheap Chinese products with false labels of origin. 

Many of the domestic enterprises have scaled down production or sold their factories.

Ha Xuan Anh, chair of Son Viet Garment, said Vietnamese manufacturers mostly target the mid-end market segment, while the low-end and high-end market segments are dominated by foreign brands.

The high-end market segment belongs to global well-known brands with special design, high quality and high prices, while low-cost products are mostly from China.

“Chinese products are unimaginably cheap. The price of knickers is less than VND10,000 and underpants 10,000-20,000, while bras are tens of thousands of dong. We outsource bras at VND30,000 per product,” he said.

“China is the production base of the world with tens of thousands of factories. Their faulty products alone are enough to provide to the whole SE market and they have been entering the Vietnamese market across border gates,” he said.

Vietnamese manufacturers not only have to compete with each other, but also with counterfeit goods manufacturers. There are many enterprises which outsource to Chinese manufacturers and then label the products with their brands to sell as mid-end products.

V L, a manager of a shop which specializes in distributing mid-end products, confirmed that half of the products in her shop are from China. However, the selling prices are relatively high – VND400,000-700,000 for a bra.

“Consumers will refuse made-in-China products, so we have to label them with Vietnamese brands,” V L said.

Nguyen Thi Hong Trang, general director of Son Kim Fashion JSC, which owns Vera, Misaki and J.Buss brands, also said that many shops ‘cry wine and sell vinegar’.

Since smuggled goods distributors don’t bear any kind of tax, they are willing to offer high discount rates to retailers and run attractive sales promotions to attract customers.

“State management agencies loosened their control over the quality of the products in the market. I am sure 80 percent of low-cost underwear products are smuggled from China and they are available everywhere, at pavement kiosks, shops and supermarkets,” Trang said.

She said that many authentic manufacturers are dying because of cheap smuggled products.

Xuan Anh from Son Viet Garment said 70 percent of products made by Xuan Viet are for foreign customers (50 percent are made under outsourcing contracts, while the other 50 percent are made to order and sold under the FOB mode).

The remaining 30 percent is sold in the domestic market, but ‘just for fun’.

“We still make products for the domestic market, but we have lost the passion,” he said. VietnamBridge.Net

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