|Exploiting ‘wild forest’
Before 1998, Vietnam fashion industry was as messy as an undiscovered wild forest. Textile and clothing products were considered to be just enough for everybody, with a variety of choices, unbranded or branded. Branded or not, we could never even name the brand since all the goods were like from ‘the UN nationality’ – quoted by Mr Nguyen Huu Phung – CEO of Viet Fashion Corporation speaking about the good old times market.
Many people must remember back then, when you received gifts from overseas cousins or family, there were always some kinds of clothings with strange brands that you never heard of. Internet was not popular, so the receivers had no choice but believed that those were ‘branded’ clothes. No matter how high quality it was, Viet Nam goods were always made for export.
In 1998, a new fashion shop came to life with a big eye-catchy red board on Nguyen Dinh Chieu street named MAXX. Beside that big fat super red color, one more thing contributed to making this shop a little bit different, which later turned out to be a huge revolution.
The shop sold only “Made in Vietnam” products, owned by Viet Fashion Corporation, which was back then a small company with just 12 sewing machines and 20 employees. Years go by, many of their brands have also come to life like Nino, NMSG, Ninomaxx but Ninomaxx is their most popular one.
Fashion industry and brands
Speaking of brands in fashion industry, Mr Le Quoc An, Vinatex CEO, said that a non-premium fashion product has a retail price of 60.000 VND, a wholesale price of 50.000 VND, compared to the production cost around 45.000 VND (including production and distribution), the profit is only 5.000 VND/product.
At the same time, premium fashion brand profit (including brand, design, supplement materials, production, and distribution) is 250.000 VND/product (50 times of non-premium products). The figures show that investment in building and nurturing brands is a critical step if you want more profits on your business plan.
It is certain that building and nurturing a fashion brand is never an easy path to follow. Viet Fashion Corporation has gone through its dramatically failure with brand NMSG before getting acknowledged and Ninomaxx was successfully known. The loss caused Viet Fashion Corporation to rework on its domestic market strategy plan, starting with restructuring the management board, rearranging the retail system and reprioritizing the main brand where Ninomaxx took over.
Speaking about Ninomaxx, Mr Phung said "Ninomaxx must become the top fashion brand in Vietnam and in Region in a near future". It is no doubt that to achieve the goal, their products must be at high quality, the distribution system must be really effective and the PR must be real good to trade off for the price that consumers are willing to pay for their clothing.
New in product - pioneer in PR
Fashion trends change every second to either public’s interest or renowned international fashion designers. So it is never easy to survive in fashion industry. It requires constant new and creative designs to keep up with the industry pace. Besides, Vietnam market has never taken copyright and patent protection into consideration.
Constant release of new designs is the best possible solution for the problems of all the fake products causing damages to the brand. Viet Fashion Corporation has released all seasonal collections like spring, summer, fall, winter for the North, summer-spring and winter-fall for the South. These collections are always kept confidential until the last minute before launching.
To do PR for its brand, fashion industry relies mainly on press releases. In addition, hosting fashion shows with celebrities helps to inspire consumers’ interests and proves to stand one’s ground in the industry. Furthermore, to reach out more to all public, sponsorship for movies or television series costumes seems to be an excellent channel.
The live example is the success of all Korean movies and television series. In 2006, Ninomaxx is the first brand to sponsor for Doc Tinh television series.
However, since this channel is just recently explored, the outcome did not meet the KPI. Nevertheless, Ninomaxx’s first flag has led many other fashion corporations like Sanding, Hong Ty, Nguyen Long… to follow their footsteps using this channel.
A fashion corporation should always have in mind that besides product delivery function to consumers; their distribution system is also the perfect channel to do PR for their brands.
Nurturing and upgrading brand through distribution system
Building a distribution system of their own is everything but simple. Space lease fee, management fee and tons of other fees are needed if the store quantities uncontrollably increase. Hence, distribution through franchising channels is favoured by many international fashion brands.
However, Vietnam fashion corporations and companies have not standadized any criteria for franchising. Many fashion stores look lost in terms of aesthetics and surrounding space since the urban planning is not that perfect. This adds to one of the slow speed in upgrading the brand image.
As a result, a lot of premium brands like Louis Vuitton, once entering Vietnam market by franchising; they have very strict rules about shop space and location. They require a humane location, which is why it is located at Dong Khoi St. nearby The City Orchestra House.
To Ninomaxx, the corporation has 3 considered areas of distribution system depending on locations, shop areas and revenues. At the moment Ninomaxx has more than 70 shops and retails nationwide. Each store area ranges from 150-400m².
In a near future, the corporation will eliminate shops that have less than 150-m2 area and aim to open at least 200-m2 area shops. Quoted from Mr Phung, opening big stores was to stand its ground on a great scale and influence of Ninomaxx brand in fashion industry. That is only the first step for Ninomaxx to later conduct more and stronger franchising to the Region.
In Dec 2008, the corporation launched the Ninomaxx Flagship at 118 - 122 Nguyen Trai St. This was a critical move in the corporation’s new marketing strategy. Customers would be taken care of with intensive attention from the sales staff. There was also a variety of choice in the store. It was in Viet Fashion Corporation wishes that their stores were to be not only all about display-selection-payment.
The corporation aimed for their customers to experience like Nike Town from Nike. The store’s façade was with European architecture to stand its own ground. Ninomaxx’s dream was not only to step out their normal distribution system to maintain their market shares and brand image, but also reach out to bigger cities like Tokyo, Hong Kong, Shanghai… Previously there were 2 Ninomaxx stores opened by Viet Fashion Corporation in the US.
Once the distribution system is upgraded, Ninomaxx was also international-styled upgraded alongside.
Lessons from Ninomaxx
It was obvious that identifying to build and nurture the brand from the very first day of foundation has taken Ninomaxx to its recent high ground. Besides, investment in designs, training the sales staff and standadizing criteria for displaying the items… also created Ninomaxx’s own brand nature.
In 2007, Vietnam Textile Association voted Ninomaxx to be the best domestic dominant and strongest brand with sales revenues up to hundreds of billions VND per year (in 2006, the corporation revenues was 200 bil VND)
Previously they had 5 different brands Nino, Maxx, Ninomaxx, NMSG, which scattered the corporation resources and weakened evenly all the brands. The merging of separate brands to meet different target audiences’ needs has intensively doubled Ninomaxx brand strength.