Vietnam's Fashion E-Commerce Soars, Squeezing Seller Margins and Operations

Sales of apparel and footwear on Vietnam’s e-commerce platforms are surging, but many fashion businesses are encountering significant operational and cost-management challenges as they transition online.

Footwear brand Nesty, which began selling online in 2023, saw its sales quadruple last year from 2024, according to CEO Ta Van Thanh. "TikTok Shop brought 60% of our total revenues last year, half of that generated through livestreaming," he said. Similarly, GenViet Jeans has been closing its physical stores to pivot its business online. "In the past, a store's location determined customer traffic. Today, content on digital platforms has become the new 'storefront' for businesses," said CEO Trinh Thanh Hai.

Data analytics firms confirm that fashion is one of the largest and fastest-growing segments in the Vietnamese e-commerce market. E-commerce growth consultancy YouNet ECI said fashion and accessories accounted for the largest share (28%) of sales across the four biggest platforms in Vietnam: Shopee, TikTok Shop, Lazada, and Tiki.

Data platform Metric reported that online sales of men's fashion products reached nearly VND9.5 trillion (US$361 million) in the first quarter of this year, a 150% increase year-on-year. Women's fashion sales rose by 75% to more than VND20.9 trillion, and fashion accessories sales jumped by 93% to VND3.8 trillion.

Nguyen Quynh Oanh, director for fashion at TikTok Shop, said the segment has been growing by more than 60% a year on the platform. There were 115,000 sellers last year, an 8.5-fold increase from 2022, she noted.

According to global e-commerce data platform ECDB, Vietnam's fashion industry is valued at VND123 trillion, accounting for 20-25% of total retail sales and growing by 10-15% annually. In contrast, between 2022 and 2024, brick-and-mortar fashion stores saw sales grow by only about 3.6% annually.

However, many businesses find the online environment difficult, particularly in areas like content creation, customer data management, and livestreaming, said Le Hoang Oanh, director general of Vietnam’s department of e-commerce and digital economy, at a recent industry seminar. "Brands that have grown through online channels are grappling with building long-term brand value, reducing their reliance on promotions, and differentiating themselves in an increasingly competitive market."

Tran Thi Thuy Linh, a content creator who has worked with more than 100 women's fashion sellers, said many of her clients lack dedicated staff to manage online stores and livestream activities. "Some brands have good products but limited production capacity, causing them to run out of stock after livestream sessions. They then deliver late or cancel customers' orders, which hurts their reputation."

GenViet Jeans’ Hai said the transition does not merely involve listing products on e-commerce platforms but "requires changing the way an entire business operates."

This operational shift is compounded by rising costs. Nguyen Lam Thanh, a TikTok executive in Vietnam, said the cost of attracting customers online is growing. "Competition is becoming increasingly intense. Consumers are demanding more in terms of product quality, shopping experience and brand value."

Content creator Linh An added that some brands have not kept pace with the preferences of young consumers, who value transparency and trendiness. "Brands need to clearly disclose their customer service policies and products’ materials and specifications. Brands also need to differentiate themselves, whether through packaging or by embracing sustainable fashion."