All About the Bag Industry in Vietnam

Vietnam is a rich country in terms of culture, heritage and craftsmanship. It is believed that Vietnamese started handicraft artistic work way before the 15th century, and this is a hypothesis that can be accepted since more than 3,000 villages across Vietnam are directly involved in the tote bags Canada industry as handicraft artisans.

The current growth of the bag industry in the country is all due to the cultural history of the ‘communes’ and the major source of labor and expertise of the Vietnamese in terms of the bag manufacturing industry. They major in manufacturing processes such as weaving, sewing, and embroidery courtesy of technical skills and experience they possess. Most of the artisans are situated in rural areas mainly in the southern and northern regions of the country.

The Transformation And Advancement Of The Bag Industry In Vietnam

After World War II, the world was subjected to an industrial and technological boom, and these effects were also felt and embraced in Vietnam. As time went by, the bag industry started to follow this industrial revolution by implementing new methods to enhance the quality and production of the bags.

The modernization of the industry was mainly meant to create efficiency and lower the production cost of the bags. This was a great relief to the industry since after employing these sophisticated production processes, the industry thrives and flourishes day by day.

By embracing these technological advancements, Vietnam strategically placed itself in the global bags market by keeping up with the ever-growing competitive bag industry and enhancing the quality of the products.

This has made even bigger brands to invest in the industry. In fact, renowned brands such as Prada, Nike, Simone, and Adidas have already established different production plants in the country.

Fashion labels, on the other hand, have not been left behind. They have seized this opportunity to capitalize on the incredible craftsmanship of the Vietnamese. Among the popular fashion brands to infiltrate this thriving industry include Kate Spade, Michael, Gucci, and Kors.

What Bags Are Manufactured In Vietnam?

The most commonly manufactured bags include business bags, travel bags, fashion bags, and school backpacks. Custom tote bags are also widely produced in Vietnam.

Marketing Strategies Employed By The Bag Industry In Vietnam

When it comes to marketing, the industry has already formed trade organizations to market and brand the products both locally and internationally. The Vietnamese bag industry has set up the Vietnam Handicraft Exporters Association (VIETCRAFT) and the Vietnam Trade Promotion agency. These two bodies are solely meant to boost the sales of the bags and bargain better terms for the manufacturers and consumers. They play a key role in keeping the industry competitive in the world market.

Factors That Facilitate The Bag Industry To Remain Competitive

  • Availability of employable and skilled artisans
  • Availability of production materials locally (plant-based materials are grown locally)
  • Small purchases allowed without additional costs
  • Flexible designers and technicians that keep up with the trending world
  • Quality of the Vietnam-made bags

With the current state of the bag industry in Vietnam, we can say that the industry’s low-cost manufacturing and product sourcing solutions are effective. With this, Vietnam’s bag industry will continue to rise as one of the most competitive industries in the global market.

Why Vietnam’s Cosmetic Market Is Dominated by Multinationals

There is a rapid increase in demand for cosmetics. The increase in demand is evident through the 2,000 spas which get opened every year in Vietnam. However, Vietnamese companies are unable to satisfy customers.

To date, 14 Vietnam based cosmetic manufactures focus majorly on hand and face products. Consequently, they leave the gap for international players to fill, resulting in the cosmetic market being dominated by multinationals.

A report done in Vietnam shows that 90% of revenue from the cosmetic market goes to foreign manufacturers like scentbird. People have many different opinions about the quality of products and you can find out if scentbird is really worth it or not.

Recently, there was a conference held at Ho Chi Minh which addressed the issues faced by Vietnam. During the meeting, it was visible that foreign and multinational cosmetic companies are controlling Vietnam’s cosmetic market.

During the recent years, the majority of the leading players in the region, especially the most successful South Korean beauty companies, have profitably expanded their footmark in the market. This is conferring to a report from the Viet Nam News, which is part of the Vietnam News Agency.

What Percentage of the Market Do Multinationals Dominate?

Official statistics show that 30% of the market is dominated by Korean players, for instance, AmorePacific and LG. The EU covers 23%, Japan 17%, and Thailand 13%. The U.S. and other countries dominate the remaining market share.

There are two ways through which Vietnamese buy cosmetics; through friends (70%) and through websites (30%). Bui Ngoc Quynh who comes from Vietnam acknowledges the potential the country holds in retail, with an estimated GDP of $220 billion and a 90-million population.

Market Entry

While the market for personal care and cosmetics is relatively small, that is about to change. The fast economic development in the country is feeding robust growth for most consumer industries, thus making the conditions suitable for early market entry.

According to Mintel, a market research industry, the market for beauty products and personal care is valued at $1.78 billion. With the economic development in the region, it is estimated to rise to $2.35 billion.

The figure represents a 9.7% CAGR in the course of a three-year period, which is among the fastest growth rate the world is experiencing right now. By 2020, Vietnam is projected to have about 33 million average-income earners. This is grounded in the expected growth of more than 6% p.a.

Even if the market remains relatively small, we expect the remarkable growth to change into a double-digit value gain. The change is predicted to be in the beauty category and personal care products such as perfumes and colognes, facial care, body care, color cosmetics, hair care, shower, soap, and sun care.

Who Will Benefit the Most?

Since the beauty industry in Vietnam is run by foreigners, there is skepticism among the Vietnam authority. They are concerned that the high growth potential may be taken advantage of by foreign companies. This will leave small domestic players behind.

Vietnam’s Essential Oils deputy chairman said that the Vietnamese cosmetic products only have a 10% market share. He is positive that the quality of their products can compete with foreign products. He also pointed out that Vietnamese companies tend to focus on quality rather than on the development of their brands.

How You Can Penetrate a Foreign Market and Promote Your Business

Tapping into the foreign market is no doubt difficult. You’ll have to conduct a lot of research and come up with a foolproof plan so that your expansion efforts won’t be in vain. The struggle remains the same regardless of the niche and industry your business belongs to.

Fortunately, there are a few essential things you have to consider so that you can effectively promote your business and achieve a global reach.

Learn to Adopt Your SEO Game to the Changes

Although you might not have thought of it before, your SEO game will surely change the moment you tap into the global market. One company that’s stood out from the rest, PracticeBloom medical spa marketing has worked hard to win over foreign markets. PracticeBloom says that businesses will have to match and better local SEO marketing efforts to make sure that they’ll work within a specific market.

Additionally, it means you’ll have to localize your website by inserting local content including numbers, local addresses, and currency so that search engines will know that you’re targeting a particular market. For example, if you have a medical spa business, your medical spa marketing effort should include local addresses of your establishments within a certain region.

Create a Diverse Team

For your business to penetrate a foreign market, you should employ in-house experts who have sufficient knowledge regarding a local market. This will normally require people who are native to that region or at least have experienced working or even living there.

This could mean you’ll have to readjust the recruitment process to easily integrate cross-cultural teams or individuals into your business. Meanwhile, organizational culture should also evolve to fully maximize diversity instead of being alarmed by it – a thing which is common when sudden changes take place.

Make Sure to Understand Various Language and Cultural Nuances

Although it’s important to understand the foreign market you want to tap into and its economics first, you should also pay equal importance to the cultural nuances and language within a particular market.

These are just among the basics you should understand. You have to understand the landscape first before you even market your message. Most brands and companies enter a new market thinking that they are culturally aware of how their customers will view their products. However, nothing can beat hearing it straight from their mouths.

Look for Potential Markets to Promote Your Business

It’s also important to do some research on any potential market. Look for both opportunities and risk factors. Figure out how easy it will be for you to do business in a foreign market.

After that, do some investigation and check for any risks. Also, conduct some research to see if there is a definite demand for the products or services you plan to offer, and if your target audience has the right amount of interest and money to do business with you.

After filtering your search and leaving only the potential markets behind, what’s next is to make a final decision in regards to your company’s situation. This might sometimes require you to travel and visit your target region as well as set up meetings with key contacts so you can know more about the local rules and competition.