Although Vietnamese garment companies have showed great export performance, they are struggling on their home ground. After free trade agreements became effective, import tariffs were reduced and the retail market was opened for foreign enterprises, several foreign fashion brands including Zara, H&M, Topshop and Old Navy landed in the domestic market and directly competed with Vietnamese ones. Meanwhile, local fashion industry has not actually kept pace with global fashion trends. Fashion designers and firms still have to do things on their own as there is no school for training of professional fashion designers. In addition, consumers tend to prefer imported clothes to domestically-made ones despite the campaign to encourage Vietnamese people to give priority to made-in-Vietnam products.

As world famous fashion brands have increased their presence in Vietnam, domestic garment companies have adopted marketing strategies to promote their approach and increase market share. Firms have become positive about winning consumers by investing in design, improving product quality and restructuring cost prices. In contrast, Vietnam’s garment exports posted high growth for many consecutive years with export turnover five to 10 per cent higher than the previous year.