“Dominating the Textile Industry: A Niche Market Approach for the Big Players”

Mr. Le Tien Truong, Chairman of the Vietnam Textile and Apparel Group, announced that the group has been working with Coats Group to research and collaborate on investing in producing flame-retardant fabric. This fabric is made from slow-burning, flame-resistant, and non-flammable fibers. It is a technically demanding product with legal and intellectual property considerations, distinct from typical fashion items.

Products made from flame-retardant fabric are not commercial items sold in supermarkets globally. Instead, they must adhere to stringent standards and regulations in the importing countries. “This product can potentially grow very quickly, but it will depend on the policies of each country. It is a unique product, unlike what we have been doing in the past,” said Mr. Truong.

The group is expediting production and aims to export the first batches of flame-retardant fabric to Indonesia, India, the Middle East, and the US in Q3 and early Q4 of 2024.

For this fabric, the group has set a revenue target of $2-2.5 million for 2024 and aims to double that figure annually over the next five years. The primary goal is to meet the demands of the US market, a crucial hub for the global textile industry, and subsequently leverage that success to gain a foothold in the EU, Japanese, South Korean, and other world markets.

“Compared to other conventional products, the development potential for flame-retardant fabric is clearer and faces less competition in the market,” Mr. Truong emphasized.

According to the Chairman, foreign partners see a massive potential market for flame-retardant fabric products, and Vietnam is among the top five exporters of textiles globally. However, it lacks production facilities for this niche market.

Therefore, the group’s collaboration in producing flame-retardant fabric and garments aims to tap into this untapped niche. This technology increases the value of the fabric by three to five times, and the resulting garments are also significantly more valuable.

However, all specialized fabrics and clothing are dependent on intellectual property rights. Flame-retardant fabric products will enter markets with stringent requirements, such as protective clothing that ensures user safety, rather than fashion apparel.

“This is the first time that Vietnam’s textile industry has approached a product that demands intellectual property rights. These rights are registered in the countries of use and have legal implications. Therefore, initially, the group must collaborate with large corporations worldwide that own the intellectual property rights for this technology and have registered intellectual property for such products,” explained Mr. Truong.

Developing niche markets has been a recommendation from experts to the textile industry for many years. However, exploring niche markets has primarily involved targeting new export markets beyond the industry’s traditional strongholds, such as the US, EU, and Japan.

Venturing into niche markets with challenging and specialized products like flame-retardant fabric is a significant challenge. Such products require substantial capital investment in technology, a strategic and committed approach, and a robust human resource capacity. While this path is challenging, it offers sustainable development and promising revenue potential.

The case of denim fabric produced by the Phong Phu Joint Stock Corporation in collaboration with Advance Denim Company illustrates this point well. Since their partnership began in 2019, Phong Phu has become a leading denim producer in Vietnam. In addition to classic 100% cotton lines, they have developed hundreds of new jeans styles incorporating cotton, Tencel, Spandex, and Viscose fibers to meet the fashion industry’s evolving demands.

While it is understood that developing niche product segments is challenging, textile companies must demonstrate determination and clear direction to break through and find safe passage in today’s uncertain and risky market environment. Evidently, this remains the domain of industry giants with robust financial and human resource capabilities.