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Garment companies dressed for success: the Vietnamese clothing retail industry is fragmented, presenting plenty of opportunities for market entry, argues Zoya Vessilieva.

Article Excerpt
Vietnam is one of the world's most promising retail markets due to its size, recent World Trade Organization (WTO) accession, sustained strong economic growth, an expanding middle class and rising levels of disposable income.

Although Vietnam's per capita retail spending in 2007 remained the second lowest in the Asia region, Vietnam is projected to be the second highest growth retail market behind China during the next five years.

According to recent estimates, Vietnam's clothing and footwear markets reached $2.27 million in 2005, representing about 7.5 per cent of consumers' total retail spending. Total sales are projected to reach $3 billion by 2010.

The growing appetite for consumer goods, modern retail facilities, lifestyle products and fashionable clothing is a result of an abundance of young people with rising incomes and optimism about the future. According to estimates by CBRE, for example in Ho Chi Minh City, modern retail outlets, including department stores, chain stores (established by both foreign and local brands) and fashion boutiques account for 28 per cent of total retail sales as compared with traditional wholesale markets and family-run shop-houses.

There are currently about 8,200 modern clothing stores in Vietnam with that number growing at about 8 per cent, per year. As Vietnamese consumers shop more, retailers have launched new stores...

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