CHINA FASHION BUSINESS

🔽The following discussion and summary from the Coldy Fashion Circle address industry-related issues. These insights are the product of collective wisdom and do not represent individual opinions. The aim is to benefit industry professionals.

Part One

Vietnam Market Demand and Business Opportunities

1. Characteristics of Fabric Demand in Vietnam

Vietnam’s climate exhibits distinct seasonal variations. Temperatures range from 10°-22°C in January, increasing to 12°-25°C in February and March, and reaching 25°-33°C in April. The peak heat occurs in May and June, with temperatures fluctuating between 25°-35°C. The rainy season spans July to September, maintaining similar temperatures, and slightly cooler conditions (22°-30°C) emerge by October. In November and December, the rainy season temperatures drop to 10°-25°C. This climate is comparable to coastal cities like Guangzhou, Shenzhen, and Xiamen in southern China.

Under these conditions, demand for fabrics focuses on essentials such as T-shirts, dresses, lightweight hoodies, jackets, and trousers. The prolonged summer and intense sunlight drive a particularly high demand for functional fabrics, including waterproof, quick-drying, UV-protective, and breathable materials. Dress designs are especially popular and thrive in this climate.

Vietnam serves as a significant base for global apparel manufacturing, hosting renowned brands like H&M, ZARA, Adidas, Mango, Nike, and Levi’s. These brands contribute to the diverse demand for fabrics.

2. Vietnam’s Role in the Supply Chain

Vietnam has leveraged its trade policies, including zero-tariff agreements with the U.S. and European markets, to develop its garment industry. Most orders cater to exports, with the domestic market remaining relatively small. Recently, local brands on platforms like TikTok Shop have demonstrated strong competitiveness in women’s fashion.

Printed fabrics, particularly vibrant designs, are highly favored, reflecting tropical aesthetic preferences. This trend is especially prominent during spring and summer.

Culturally, Vietnam shares deep ties with China, characterized by Buddhism, Confucian traditions, and folk religions. Celebrating Lunar New Year and following the zodiac (where cats replace rabbits in the zodiac sequence) influence fabric choices and designs. Men’s fashion preferences align closely with those in China but are generally accompanied by lower spending.

3. Profitability and Market Entry

Vietnam’s fashion market is evolving, with domestic streetwear and women’s brands gaining visibility. Retail prices typically range from 30-50 yuan, comparable to products on China’s Pinduoduo platform. In China, the same products would sell for about 100 yuan. This price disparity stems from Vietnam’s lower labor and consumption costs, resulting in profit margins of 10%-20%.

The industry resembles China’s 1990s county-level markets, with considerable growth potential fueled by Vietnam’s youthful demographics and a population of approximately 100 million.

Vietnam’s industry chain is stratified: low-end fabrics are locally produced, while mid- to high-end fabrics are predominantly imported. Chinese fabric suppliers are capitalizing on this demand, establishing outlets in Vietnam and sourcing materials from regions like Keqiao in Zhejiang, China.

There is also strong demand for curtain fabrics. While fast-fashion brands like H&M produce in Vietnam, their fabric quality is often inferior to that of Chinese brands at similar price points.

4. Design Innovation and Market Opportunities

Vietnamese brands, such as C.DAM, exhibit unique creativity in fashion design, catering to southern Chinese aesthetics. These designs, combined with competitive pricing, make them market standouts.

For Chinese fabric suppliers, Vietnam presents significant opportunities due to its unsaturated market and lower competition intensity. Effective ways to engage buyers include participating in fabric exhibitions in China, connecting with Vietnamese buyers, finding local agents, or conducting market surveys in Vietnam. The low costs associated with exploring Vietnam further reduce entry barriers.

Part Two

Customer Acquisition Channels in the Vietnamese Market

1. Feasibility of Online Customer Acquisition

In the context of cross-border e-commerce, importing or wholesaling products from Vietnam is gaining attention. Fabric and accessory products are suggested to have a competitive edge over finished garments in Vietnam due to the high time sensitivity of the latter. Some enterprises export surplus fabric stocks from Chinese women’s clothing brands to Vietnam, successfully carving out a niche in the market.

Social media and e-commerce platforms play a crucial role in expanding into the Vietnamese market. In addition to international platforms such as Facebook, Instagram, and LinkedIn, Vietnam’s local e-commerce platforms are growing rapidly. The most popular include Shopee VN, Lazada VN, TikTok Shop, Sendo, Tiki, Adayroi, The Gioi Di Dong, and Dien May Xanh. Global platforms like Alibaba.com and Amazon Global also hold significant influence in the region.

Vietnam is renowned for its clothing craftsmanship, particularly its intricate silk embroidery. Artistry showcased on platforms like Instagram highlights the seamless fusion of beadwork and traditional embroidery techniques. Even pieces from 2016 remain impressive, reflecting Vietnam’s rich heritage in traditional garment-making.

Vietnamese traditional attire, Ao Dai, exhibits a unique aesthetic appeal. While its high-collared, form-fitting style resembles the Chinese cheongsam, Ao Dai distinguishes itself with trousers and side slits positioned at the waist instead of along the thighs. This design elegantly accentuates the feminine silhouette. Vibrant fabrics, particularly those featuring floral and botanical patterns, are highly favored, influenced by the tropical climate and cultural traditions.

2. The Role of Local Partners in Vietnam

Chinese companies possess clear advantages in the Vietnamese market, including robust supply chain systems, advanced production equipment, and extensive management expertise. These strengths, coupled with mature inter-company collaboration, give Chinese businesses an edge. On the other hand, Vietnam benefits from low labor costs and inexpensive factory rents, creating a complementary relationship that facilitates market entry for Chinese enterprises.

Vietnam’s modernization began after its reunification in 1975, which resulted in a relatively low starting point for development. The country is home to 54 ethnic minorities, just two fewer than China, which adds to its cultural diversity. Deeply influenced by Confucian values, Vietnam places great importance on modesty, humility, and harmonious interpersonal relationships. This cultural trait aligns with other East Asian countries, such as Japan and South Korea, where hierarchical etiquette is highly valued.

Vietnam’s professional markets remain underdeveloped, characterized by outdated infrastructure and a predominance of low-end materials in the fabric sector. However, demand for functional fabrics—such as those with UV protection, water resistance, and quick-drying properties—is rising, driven by the growth of manufacturing industries. This trend offers new opportunities for Chinese fabric enterprises.

Given Vietnam’s population of approximately 100 million, forming a complete supply chain is challenging. As such, partnering with local agents or Vietnamese fabric suppliers is a practical market expansion strategy. Vietnamese daily wear tends toward casual and relaxed styles, resembling rural Chinese fashion, reflecting local lifestyles and aesthetic preferences.

Vietnamese culture is visible in everyday life, from the ubiquitous household and shopfront shrines to the widespread use of herbal spices in their cuisine, showcasing its unique culinary habits. The streets are bustling with motorcycles, a distinctive feature of local transport, which, despite its apparent chaos, authentically reflects the rhythm of life in Vietnam.

Part Three

Key Considerations When Dealing with Vietnamese Customers

1. Cultural and Communication Skills

In cross-border trade, the Vietnamese market presents several risk factors that require attention. Post-sales issues in online transactions are particularly prominent, with a notable risk of fraudulent refunds. For high-value goods, cash-on-delivery is not recommended. Ensuring timely logistics and selecting reliable logistics partners are crucial.

Due to the bulky and heavy nature of fabric trade, partnerships with local logistics companies are often necessary to reduce transportation costs. Logistics routes exhibit regional differences: in Hanoi, land transportation is the primary method and is relatively cost-effective, while in Ho Chi Minh City, sea freight offers more competitive pricing. At the China-Vietnam border, particularly at the Friendship Gate port, numerous Chinese logistics companies are highly active, facilitating frequent trade flows.

Vietnam’s industrial development is concentrated in specific regions, with industrial parks mainly located in Ho Chi Minh City and Hanoi. Ho Chi Minh City, leveraging its coastal advantage, has close ties with other coastal countries and follows a development model similar to Shanghai. In contrast, Hanoi’s growth trajectory is more akin to Beijing’s. These two cities are experiencing dynamic growth, reminiscent of the early development stages of Guangzhou and Shenzhen. Meanwhile, other regions in Vietnam remain relatively underdeveloped, signaling substantial growth potential across the overall market.

2. Order Fulfillment and After-Sales Services

The Vietnamese government offers comprehensive support to the textile industry, including land incentives and tax breaks. In 2014, the Ministry of Industry and Trade established an ambitious development plan for the textile and garment sector. Currently, Vietnam relies heavily on Chinese raw materials, particularly machinery and yarn, where import demand is significant.

Vietnam’s export market structure reveals that the United States is its most important destination, a characteristic resembling China’s export profile. However, due to China’s self-sufficient supply chain, its demand for Vietnamese apparel imports is relatively low.

Culturally, Vietnam shares deep ties with China. Buddhism, the predominant religion, profoundly influences local social life. Traditional festivals and customs are also closely aligned with those in China. This cultural affinity facilitates business interactions between the two countries. However, maintaining proper etiquette and adhering to formal business protocols are critical in commercial engagements.