Fashion Markets & Industry Report

Assignment 1

Fashion Markets & Industry Report

ID:s3938135

Nguyen Do Tuan Hiep

Presented by

Lecturer: Nathalie Broun

TOPICS COVERED

Reference list

The global fashion industry is a complex system that incorporates different activities, including textile production, manufacturing, retail, and marketing (Power 2009). It significantly depends on customer demand and adjusts its connectivity and structure to meet market needs. Vietnam is among the top suppliers of global fashion companies, with Asia serving as the primary production region (Husband 2021). The business has seen impressive development over the years, driven by elements including rising consumer demand, urbanization, and shifting lifestyles ( Marketline Industry Report 2022). The important trends, opportunities, and problems in the global fashion sector will be highlighted in this research, along with how they affect enterprises in Vietnam.

2023

Current Opportunities Current Opportunities

Peopleinthe Industry Consumers + More environmentall yfocusfromthe threadof climatechange

"AsiaPacific(excludingChinaandIndia)isoneofthemost promisingregionstoinvestinfor2023"saidbyBoF

2mil workforce < <6000 GarmentApparel Firms

Largestexport sectorin2017 wastextile

Global Apparel Manufacturing HUB

Predominantly within

Outdoor Sportwear

Top 3 biggest market

Vietnam's Difficulties Vietnam's Difficulties

Administrative procedures procedures

"A Global slow down is happening"said by BoF

TextileandGarmentsexportsinVietnamarealso projectedtoslowin2023(Via2022)

Reason: Besides the objective factors:

Vietnam in next 5-10years

Vietnam in next 5-10years

"However, the garment industry still has positive bright spots supporting overcome this global slowdown and rocket in the next 5-10years"Said by Via 2022

Domestic Consumers spendingon clothingand footwearhas beengrowing fast(Minh Ngoc2023)

Upper-middleincomestatusis forcastedto reach7000$per capitaby2035 (ThuNguyen 2022)

Chinais projectedto become Vietnam'slargest exportby2030 (ThuNguyen 2022)

Strengths

90%ofequipmentinismodernized

Improvedinfrastructure

Low-pricedworkforce

Producehighlyqualifiedgarments

Opportunities

ThetrendshiftedpotentiallytoAsia Pacific

Abilitytoaccessdifferentmarketsdue tonewFTAs

MOITwitha visionto developon sustainabilityin thetextile industryby 2035(Cece Nguyen2023)

Vietnam's SWOT Vietnam's SWOT

Weaknesses

Governmentsupportingisweak Mostofrawmaterialsareimportedoversea Lowskilledandproductivelabor,lowwage Productsarenotdiverse

Thread

Globalslowdown Regulationsonchemicals,safeproducts causehighercoststoproviders BiggarmentprovidersfromChina, India,andBangladesh

"Vietnam has emerged as a significant player in the global value chain and consumer market"

The Report The Report

How is the global fashion system structured?

The global fashion industry is a system of systems, defined as "a complex system intimately connected with technological, structural, social, cultural, and economic systems all fitted within the framework of sustainability," according to a report by Fletcher from 2009. Mass Market

The global fashion system models

Market Levels

Planet, sustainability and ethics

The fashion industry has a tremendous impact on how the earth is being changed, contributing significantly to the increase in carbon emissions and the extinction of species. After the aviation sector, the fashion sector now produces the second-highest amount of industrial CO2 emissions (Niinimäki et al. 2020).

Economic Restructuring

The current fashion system is referred to as the "linear model," which refers to the entire system, including the provision of all components, the labor used to produce the garment, transportation of the garment from the factory to the retail store, as well as its aftercare and disposal (Ertekin and Atik 2013),which is a drawback point in this system. Fashion manufacturers should adopt a circular economy instead of a "Linear Model," which extends the life of materials, goods, and services, reduces material consumption, redesigns goods, services, and processes to be less resource-intensive, and restores "waste" as a resource to create new goods (EPA 2022).

Current Global Challenges

The apparel sector is dealing with a number of challenges, including COVID-19-related supply chain interruptions, ethical and environmental concerns, and sustainability problems. Furthermore, 58 percent of executives believe that the fashion market would suffer as a result of geopolitical tensions, particularly those related to the ongoing conflict in Ukraine, which have disrupted supply chains and led to an energy crisis, according to The Stage of Fashion 2023 Report by BoF, which comes at a delicate time of geopolitical tension and inflation.

The problem that the industry has not solved yet is still “Sustainability”. The economic framework and business practices of the industry have prioritized social and environmental concerns, promoting the use of ethical and sustainable manufacturing practices. Fashion businesses are using ideas from the circular economy and cutting-edge technology to reduce waste and pollution ( Amed & Berg 2020).

Water pollution Poor working conditions Exploitative working conditions

Agricultural

Transition Role

Human injustices

Garments are ranked at the second place of commodities likely to involve modern-day slavery (The Walk Free Foundation 2018).

Current Global Opportunities

The focus on ethical and ecologically friendly production methods offers the fashion industry a potential for growth. As consumers are becoming more aware of the environmental and social consequences of their purchases, they are looking for goods that are produced ethically and sustainably. Moreover, the manufacturers are forced to use recycled materials and engage in more sustainable manufacturing to limit the impact to the environment. The market for sustainable fashion is expected to grow from $6.35 billion in 2019 to $9.81 billion in 2025, according to the BoF The Stage of Fashion 2020 Report.

Vietnam: Global Manufacturing Hub

Vietnam, which has a significant consumer market and a developing manufacturing sector, is a key player in the global fashion business. According to the Vietnam Textile and Apparel Association (VITAS), the total export value of Vietnam's textiles and clothing was estimated at US$29 billion in the first nine months of 2021, an increase of 13.2% over the same period in 2020. (Cece Nguyen 2022)

The

Heavy Textile Industry

Vietnam: Current Challenges

The textile and apparel business in Vietnam has experienced several difficulties, according to Mr. Tran Thanh Hai, Deputy Director of the Import and Export Department, Ministry of Industry and Trade. workers who were forced from the agricultural sector by the economic restructuring have yet to adapt to the demands of the modern industrial workplace. The United States, ASEAN, China, Korea, Taiwan, and Japan are all major suppliers of raw materials. In instance, imports of fabric from the Chinese market reached over 58% in the first nine months of 2019; imports of raw materials and accessories, fiber, and yarn reached 41.07% and 55.04%, respectively; and 65.77% of imported cotton came from the United States (VietnamCredit 2019)

Vietnam: Opportunities in the future

According to research by Fashion United, the textile and clothing sector in Vietnam is expected to grow at a rate of 7% to 8% year through 2025. Vietnam is currently the US's second-largest footwear and apparel supplier behind China. It is also one of Asia's key industrial hubs and provides goods to some of the finest Western businesses in the garment, sportswear, and footwear industries ( Cece Nguyen 2022).

It is predicted that Vietnam's fashion industry would expand during the next five to ten years as a result of its strategic location, attractive trade agreements, and expanding market share. The industry must put its focus on improving its design and innovation capabilities, increasing labor productivity and working conditions, and adopting ethical and sustainable manufacturing methods in order to preserve its competitiveness on a global basis.

Conclusion

In summary, this study aims to furnish forthcoming fashion businesses intending to invest in Vietnam with a lucid outlook on the existing state of affairs in the industry. While the global fashion industry encounters a multitude of challenges concerning ethical and sustainable practices, a retailer's viewpoint indicates that Vietnam's fashion sector exhibits significant potential for expansion

Opportunities of being Global Manufacturing Hub

Appendix Appendix

Appendix 3 Appendix 3

Appendix 8 Appendix 8

Reference list Reference list

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McKinsey (2021), ‘The Stage of Fashion 2022’, Business of Fashion

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