“Our goal is to have a network of 350 stores and a figure of more than US$400 million in revenue by 2027, while remaining profitable, which we are confident is achievable,” Mai Son Pham, founder and CEO of MRMI, told Inside Retail.
Pham worked as a flight attendant for Vietnam Airlines for more than seven years before founding her fashion conglomerate in the early 2000s, as she realised a huge pent-up demand for international fashion brands in the country. After almost two years of discussions with Spanish fashion label Mango, the company opened the label’s first store in Vietnam in 2004 in Ho Chi Minh City. From there, the portfolio has expanded every year.
Since the beginning of this year, MRMI has been rapidly rolling out new stores, introducing three international brands into the market. With 80 per cent of its outlets in Hanoi and Ho Chi Minh City, the business currently turns over more than US$110 million annually.
With 30 new stores expected to be opened this year, MRMI plans to add a further 30 to 50 annually by 2027 and add another 10 brands to its portfolio. It is targeting 30 per cent annual sales growth by 2025.
The expansion will see a broader implementation of digital channels, including a mobile application, an e-commerce platform and individual ‘brand.com’ shopping sites. The company will also expand its product offerings on selected third-party platforms.
“While we will continue to expand and introduce new, high-end and premium brands, our focus is on the ‘mass-aspirational’ and ‘sportswear’ segments, which could support up to 100 stores each,” Pham added.
A lucrative market for affordable fashion
Vietnam’s mainstream fashion market has traditionally been very “price sensitive” and dominated by affordable international fashion brands, such as Uniqlo, H&M, Zara and Singapore’s Charles & Keith.
Uniqlo launched in Vietnam in late 2019, opening its largest flagship store in Southeast Asia and attracting more than 2000 customers on its first day of trading. Since then, the brand has opened 10 more. In the year to 31 August, the Japanese retailer reported “a large rise in revenue” – and its maiden profit for the market. In contrast, Covid-19 fuelled declines in both revenue and profit in nearby Malaysia, Thailand and the Philippines.
H&M, which has 12 stores in the country, recorded 4.4 per cent year-on-year sales growth in 2020, one of only five markets worldwide where sales increased that year.
“When considering whether or not a brand can be introduced to the market, we have to think about whether the consumer base is ready for the brand and if the brand can match the demands of consumers here,” Pham said. “The price of products matters greatly.
“Imported products are still highly regarded, so the products we bring to the market need to be affordable enough for it to make sense for consumers to purchase those products in-country, rather than taking a short flight to Singapore or Thailand to shop there.
“The price positioning of the brands we represent matters to the market.”
According to Pham, despite Vietnam’s economic activity being largely concentrated in the three main cities – Hanoi, Ho Chi Minh City and Danang – the company has seen an increasing demand for high-quality fashion in second and third-tier cities, witnessing “healthy sales” from these markets.
“Excellent property and shopping centre developments are continuing to come up in all second and third-tier cities that offer us great access to a broad range of potential customers,” Pham said.
“Malls matter and they will continue to be beacons for retail in Vietnam, while the country’s ‘street shop’ culture will continue to be an important driver of our expansion.”
The CEO also stressed that MRMI is primarily targeting the emerging middle and upper-middle-class segments, which have the majority of the disposable income and are driving volume.
“We are focused on growth, and we have seen these segments of society increase in their hunger for fashionable attire,” she said.
Pham says Vietnam’s economy has grown at a break-neck speed in the past decade, exceeding 20 per cent growth during some recent years. Such rapid growth “has translated to greater consumer spending, which in turn provides strong demand for growth and expansion strategy,” she explained.
“Not all brands are guaranteed to succeed in a dynamic and ever-changing market. That said, we focus on brands that have the potential to scale and meet consumer needs.”
Besides domestic expansion, the fashion group is mapping out expansion into other Southeast Asian markets but is staying mum on which countries it is eyeing.
“Our systems allow multi-country operations, we’ve built robust processes for brand marketing – from brand creation and awareness to engagement and conversion – and we have a strong team to run multi-country operations from our headquarters,” said Pham.
“For the existing brand portfolio, we are looking at opportunities – whether a brand we carry is present yet in a particular market – or we could challenge the current partner to operate in that country if we see a major opportunity to grow a brand.
“For the new brands in our pipeline, we bring up the idea of multi-country operations early in discussions. The point is to find the right mix between our in-house expertise and local partnership for local knowledge to successfully reach our local audiences.
“It is key that we take our customer-centric DNA overseas by harnessing the information at our fingertips including, our customer app, geo-location, our loyalty programs – that include member tiering, special events, private sales – and post-sale services like the AI helpdesk and online concierge. But we also need local expertise until we can build it ourselves.”
Pham disclosed that the company is building itself in such a way that it could be ready to list on the stock exchange some time in the future.
“This means auditing according to public company standards and conducting an implementation plan across all business units – including governance, risk management, legal, finance, accounting, tax, systems, and processes,” Pham said.
“We are very focused on our goal of becoming the leading retail fashion distributor in Vietnam.”
MRMI’s portfolio of 18 brands includes Coach, Dsquare2, Weekend MaxMara, Max&Co, The Kooples, Ted Baker, Pinko, Pedro, Mujosh, Puma, Marhen.J, Charles & Keith, Havaianas, LeSilla, GiGi, MLB, Skechers and Ceci.