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Luxury products unsalable in inflation period
A survey conducted by a market research firm recently showed that the turnover of luxury brand names in Vietnam’s market in the first half of the year decreased by 25% over the same period of last year.
Commenting about the changes in the shopping tastes of customers, Tran Quoc Chung, General Director of Phuong Phat Company, which is distributing a lot of well-known brand name perfumes, said that consumers with average and higher incomes now can be classified into two groups. The first group is still using high-grade products, but has reduced its purchasing volumes, while the second is still purchasing in higher volumes, but is now using less well-known brand names. In general, both of the groups have cut their spending.
Nguyen Thi Mau, the owner of a jewellery stall at Tax Trade Centre, said that the number of clients purchasing items of from several hundred to several thousand dollars has decreased by half. It is because people are not earning as much from securities investments and real estate trade deals as they did last year.
According to a market survey firm, the consumption of luxury products increased by 35% last year over the previous year. The firm then forecast a 20-30% growth rate this year. However, in fact, the sales of many well-known brand name products have decreased by 10-15% from last year.
The number of customers going shopping at luxury trade centres in HCM City has reportedly decreased by 20% over the last three months. Trieu Thi Huong Giang, Deputy General Director of Zen Plaza, said that all fashion brand names have reported sales decreases for June, July and August. Brand names which target middle-age clients saw slighter sales decreases, while other brand names all saw 5-15% decreases.
The general director of a company which is distributing the products of 23 French, British, American and Italian fashion and cosmetics brand names said that the stagnancy of Vietnam’s luxury product market is similar to that of other markets in Asia-Pacific, at some 25% less than last year. The decrease is considered unavoidable in the context of the world’s recession.
However, despite the sharp falls in turnover, foreign brand names are still trying to conquer Vietnam’s market, which now tops the list of the most attractive retail markets in the world. The brand names are still trying to open more shops and expand their network of outlets in Vietnam to prepare for the recovery period, expected to have come about by early next year.
VNN
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