Fashion Accessories. Essential sourcing intelligence for buyers
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1 Sample pages only To order the full report please refer to the last page Fashion Accessories Laos vietnam Hanoi Ha Tay Nam Dinh Ninh Binh Dong Hoi China Essential sourcing intelligence for buyers Vietnam manufacturer profiles Detailed profiles of 35 suppliers with verified manufacturing and export credentials April 2009 US$100 Thailand Cambodia Binh Duong Ho Chi Minh Product & price trends Prices and specifications of 146 top-selling export products ranging from hats to socks and bags to scarves Design & material innovations Coverage of the latest trends in style and materials
2 EXECUTIVE SUMMARY FASHION ACCESSORIES Supplier capability in Vietnam EXECUTIVE SUMMARY Handmade products shipped from Vietnam have gained international recognition for their exquisite craftsmanship, innovative designs and competitive prices. Makers also accept mixed orders, set low MOQ, and put strong emphasis on customer service and after sales assistance. These factors have helped the country establish its position as one of the major sourcing centers for bags, hats, caps, scarves and hosiery in Asia. There are over 50 ethnic groups in Vietnam, each of which has its own distinct language, lifestyle and culture. The country s artisans are known for combining beauty with comfort, and art with function in its handicrafts. The high interest in Vietnamcrafted fashion accessories is brought about by the growing demand for quality merchandise that is reasonably priced. In fact, more than 80 percent of companies interviewed for this report anticipate their export sales to either stay the same or increase in 2009 despite the current global financial crisis. Suppliers, however, are treading with cautious optimism as various issues make the business environment more challenging. The economic downturn has caused a decrease in consumer demand. In fact, the $59 million worth of handbags, wallets, suitcases and umbrellas exported in January 2009 reflect a drop of 16 percent compared to the same period in The decline in overseas sales has forced many suppliers to cut manufacturing costs by streamlining production and reducing their workforce. The following are some of the key trends we see in Vietnam s fashion accessories industry: Exports in the line are expected to experience modest growth in the next 12 months, with suppliers anticipating the economic slowdown to continue. To stimulate sales, companies will bring down product prices and release more designs. Manufacturers will either decrease or keep current price levels to remain competitive. To bring down quotes, makers will cut down on their use of imported raw materials. The US, the EU and Japan will continue to be the top importers of Vietnam-made fashion accessories, despite the drop in consumer demand in these areas. Companies will continue to upgrade their production facilities by sourcing equipment and machines from Japan and South Korea. This report covers the main types of fashion accessories produced in Vietnam, including bags, hats, caps, scarves and socks. The Products & Prices section details the features and price ranges of fashion accessories manufactured in Vietnam. It also includes the latest trends in style and materials. The Industry Overview discusses key issues affecting exporters and elaborates on the composition of the industry, highlighting key characteristics of different types of suppliers. The majority of fashion accessories suppliers in Vietnam are locally owned, with some being cooperatives. This report reflects the nature of the industry with 86 percent of featured companies wholly Vietnam-owned. A growing number of makers are foreigninvested or managed. Production of fashion accessories is concentrated in Ho Chi Minh and Hanoi, with many suppliers also located in Binh Duong, Ha Tay and Hung Yen provinces. Companies that have established their workshops outside Hanoi and Ho Chi Minh also maintain offices and showrooms in these two key cities to be more accessible to buyers. In this report 14 in-depth company profiles 21 short company profiles 146 top-selling export products Supplier demographics Supplier survey Industry statistics and charts OBJECTIVE & METHODOLOGY This Vietnam Sourcing Report is part of a series designed to provide buyers with information on new products from export manufacturers in supply markets that specialize in handmade merchandise. The Developing Country Sourcing Report series is part of Global Sources corporate social responsibility initiatives. It is offered in conjunction with The Kearny Alliance, whose mission is Aid through Trade. The objective is to help create jobs in developing Asia through export promotion. To produce this report, larger, midsized and emerging manufacturers all with substantial export experience were surveyed. The selection of suppliers is designed to reflect the composition of the industry in Vietnam in terms of geographic location, materials used and range of products offered. For in-depth profiles, our researchers visited the facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other companies in this report were either visited or contacted by phone. In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. Suppliers also participated in a survey designed to provide insight into the industry. 3
3 CONTENTS CONTENTS INDUSTRY OVERVIEW... 7 Supplier summary Export value Export markets Products & prices Production & export statistics Price guides Supplier survey Export prices Export sales Export markets Major challenges Product trends SUPPLIER PROFILES Supplier matrix Raw materials & exports Supplier profiles PRODUCT GALLERY Top-selling export products SUPPLIER CONTACT DETAILS Copyright 2009 Trade Media Limited. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited. Published by Publishers Representatives Limited (on behalf of Trade Media Limited) P.O. Box 219 GT, Strathvale House, North Church Street, George Town, Grand Cayman, Cayman Islands c/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong ISBN Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses. Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed. The author and the publisher of this report (and the publisher s affiliates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, Contents ), whether as to the accuracy, completeness, quality, fitness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or deficiency in, or for any use of or reliance on, such Contents (or any portion thereof). All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. Products that are not the specific topics of editorial articles are shown for illustrative and/or demonstrative purposes only. We, our affiliates, and our affiliates respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party. 4 Vietnam Sourcing Report
4 INDUSTRY OVERVIEW INDUSTRY OVERVIEW Vietnam-made fashion accessories have gained international recognition for their exquisite craftsmanship and innovative designs. The competitive prices of its handmade products have helped the country establish its position as one of the key supply centers for bags, hats, scarves and hosiery. Since joining the World Trade Organization in January 2007, Vietnam s exports of fashion accessories have seen significant growth. From the $490 million worth of handbags, wallets, suitcases and umbrellas the country sent overseas in 2006, total shipments reached $824 million in This represents an increase of 68 percent during the twoyear period. The high interest in Vietnamcrafted fashion accessories is the result of growing demand for quality merchandise that is reasonably priced. In fact, more than 80 percent of companies interviewed for this report anticipate their export sales to either stay the same or increase in 2009 despite the current global financial crisis. Challenges To address low consumer demand brought about by the economic slowdown, many companies in Vietnam have turned to their creativity and resourcefulness. Looking for ways to reduce their product prices, suppliers are utilizing less expensive materials such as jute, banana fiber, seagrass, bamboo and shell. One of the least expensive varities of natural fiber, jute can be spun into coarse, strong thread. It is touted to have several advantages over other types of natural fibers due to its low density and high tensile property. Some makers are also focusing R&D on models with fewer trimmings, and using locally sourced embellishments. Hanoi-based Vanly Link and HTVNCrafts, for instance, exports handbags decorated with beads or buttons made of shell or animal horn. The design teams of some companies monitor global consumer trends. Suppliers conduct research on the latest styles through the Internet and international fashion magazines. Aside from the decrease in export orders, another problem makers are facing is the rise in labor cost. Despite easing to 15 percent in February 2009, Vietnam s inflation rate is still among the highest in Asia, with consumer prices experiencing a YoY increase of 20 percent in December This has prompted workers to demand higher wages. In an effort to ensure social welfare and stabilize the country s macroeconomy, the government implemented new minimum wage levels in January Monthly salaries for workers at foreign-invested companies were increased by $6 to $12, depending on the region. The new rate in Ho Chi Minh and Hanoi is about $70 per month, while monthly wages in midsize cities such as Bac Ninh, Nha Trang and Bac Giang is set at $54. Another challenge fashion accessories suppliers in Vietnam are facing is rising raw material costs. Pure silk is currently available for $1.30 to $1.80 per sqm, an increase of 10 percent over the previous year. The cost of Export value Handbags, wallets, suitcases & umbrellas $mn Source: General Statistics Office of Vietnam J F M A M J J A S O N D Supplier summary Suppliers surveyed 35 Export sales $21mn Export ratio 89% Capacity utilized 51% Full-time employees 5,497 Data: All surveyed suppliers plastic and glass beads, which are used as accents and embellishments, has also risen by at least 5 percent over the past 12 months. In addition, Vietnam companies are still dependent on overseas suppliers for raw materials. In 2006, textile suppliers in the country produced 600 million-sqm of fabric. This, however, was not enough to meet the 2.3 billion-sqm domestic demand, which came mainly from the garment export industry. Suppliers of fashion accessories are also forced to compete with garment makers for raw materials. To address the fabric shortage, the government of Vietnam has put into place a strategy designed to speed up the development of the garment and textile industry. One objective of the 2005 to 2010 development plan is to increase the use of locally sourced components in exported garments. A decree issued by the Prime Minister of Vietnam Government Decision No. 55/TTg-CP aims to raise significantly Textiles $mn 1, J F M A M J J A S O N D 7
5 SUPPLIER PROFILES Handicraft Export Co. Since its establishment in 1990, Anh Linh has been manufacturing low-end and midrange handbags and sandals. The locally owned company also offers garden and home decor, including furniture, tableware and terra-cotta planters. Models are mainly made of genuine rattan, seagrass, water hyacinth and fabric. Beads, stones and shell are used as trimmings, with some items featuring embroidered motifs. All output is sent overseas, the majority of which is sold on an OEM basis. Current export destinations are Japan, Italy, Greece, Germany and the US. Japan, which accounts for the majority of shipments, absorbs about 70 percent. Total sales reached $300,000 in Prices range from $1.50 to $20, depending on the design and the material. A seagrass handbag embellished with plastic beads is available for $3, while an embroidered handbag made of high-grade silk is priced at $18. Some pieces are decorated with intricate floral patterns. Company facts Four designers can release 200 new models each year. Samples can be sent within 20 days. All raw materials are sourced from suppliers in Ho Chi Minh. Located in Hoc Mon, a district known for its handicrafts, Anh Linh s 3,000sqm facility handles all manufacturing processes, including cutting, weaving, sewing, beading and packing. To guarantee product quality, the five-member QC team inspects all items before packing and shipping. Common packaging materials include polybag and carton, with other options available on request. Lead time is 45 days. Minimum order is 5,000 items, which can be comprised of assorted styles. Payment is by an L/C. has joined trade shows in key cities worldwide, including those held in Frankfurt, Düsseldorf, Milan, Las Vegas, Tokyo and Hong Kong. It is the member of the Vietnam Handicraft Exporters Association and the Vietnam Leather and Footwear Association. Capability Materials used Leather (genuine/synthetic) Fabric Rubber Plastic Metal Wood and other natural materials Contact details No Exports by product Gloves Hosiery Headwear & neckwear Fashion bags & wallets 100% Exports by market United States/Canada 10% European Union 20% Europe (non-eu) Asia-Pacific 70% Middle East Other Year established 1990 Head office location Tan Binh (Ho Chi Minh) Ownership Locally owned Factory location(s) Hoc Mon (Ho Chi Minh) Full-time employees 50 Part-time employees 100 Total annual sales (all products) $300,000 Sales & output: Fashion accessories Annual sales $300,000 Share of total sales 100% Annual export sales $300,000 Total monthly capacity 30,000 pieces Average monthly output 20,000 pieces Capacity utilized 67% Average monthly exports 20,000 pieces Export ratio 100% Business contact NGUYEN Thi Phuoc Phone (84-8) Fax (84-8) alp@vnn.vn artextl1@vnn.vn URL Address 21 Nguyen Van Mai Street, Ward 4, Tan Binh, Ho Chi Minh, Vietnam 26 Vietnam Sourcing Report
6 SUPPLIER PROFILES Popular export models Image file name: ID No. 312 Image file name: ID No Image file name: ID No Model: Description: Handbag; fabric body; beadwork; 28x12x23cm Model: Description: Handbag; fabric body; beadwork; 22x10x20cm Model: Description: Handbag; silk body; handembroidered; 30x15x28cm Image file name: Tree of life Image file name: A Image file name: G20025 Model: handles; embroidery and beadwork by hand; 23x30cm Model: handles; handembroidered; 22x12x23cm Model: handles; handembroidered; 20x12x28cm Information not disclosed 27
7 PRODUCT GALLERY PRODUCT GALLERY Fashion bags & wallets Image file name: 2602.jpg Image file name: 2604.jpg Image file name: 2605.jpg Model: Description: Handbag; fabric body; beadwork; 28x12x23cm Model: Description: Handbag; fabric body; beadwork; 22x10x20cm Model: Description: Handbag; silk body; handembroidered; 30x15x28cm Image file name: 2606.jpg Image file name: 8018.jpg Image file name: 1818.jpg Model: handles; embroidery, beadwork by hand; 23x30cm Model: handles; handembroidered; 22x12x23cm Model: handles; handembroidered; 20x12x28cm Information not disclosed 67
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