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CHULA FASHION

VIETNAM
CFVG - MBA 29 - GROUP 7
1. Chula’s Business Model Define
Economic Model
1. From Domestic to International Expansion and
online channels
→ Revenue from clothes and fashion sales
● Offline stores in HN, HCM, Hoi An
● Pop-up events in many countries
● Online on FB, website
2. Hispanic & Vietnam culture blend

Technical Model Social Model


Producing products with:
- “Slow-fashion” method with made-to- -From not only for the small
measure and tailor-made clothes which are: Chula’s Business Model Spanish-speaking community, but
Handmade, Artisanal, Ethical, Social, also for the cosmopolitan networks
Eco-friendly. -Make VN’s fashion be able to Face
- Sourcing from local materials with forein brand
- Simple sewing machine and computers,
- “Democatic Leadership” culture
not using advanced technology.
- “Unique style” influenced by transcultural - Social benefits: 75% workers are
“East meets West”. disabled
Legal and Financial Model
- Exceptional skilled and disabled
employees. ● Funds only from founders to have absolute control.
● Teams of 65 people with 75% of disabled people > benefit from
preferential tax policy.
1. Chula’s Business Model Canvas
KEY PARTNERS KEY ACTIVITIES VALUE CUSTOMER CUSTOMER
● Vietnam culture ● Offline sales at stores PROPOSITIONS RELATIONSHIPS SEGMENTS
catalysts ● Online sales on website
“Slow-fashion” with ● Every buyer is carefully ● Local people in
● Tourist guide ● Pop-up sales events
made-to-measure and identified. Their choices, Vietnam: expats,
company and ● Promotion events in
tailor-made clothes feedbacks and purchases Vietnamese
agency in Vietnam prestigious places like
which are: are recorded.
Rome, Berlin, Dubai,... ● Tourists discovering
● Vietnam ● Handmade ● Every customer are
treated with special care
Vietnam
embassies abroad ● Artisanal
● Foreign customers
● Art and boutique ● Ethical
● Social
attracted by “East
hospitality event
organizer all over KEY RESOURCES ● Eco-friendly CHANNELS meets West” and
“Social responsibility” ● Offline stores in HN, “slow-fashion”
the world ● Teams of 65 people with
of employing disabled HCM, Hoi An culture.
Diego leads the design and
labours. ● Pop-up events in
Laura leads the sales and
Unique style influenced many countries
communications with 75%
by multicultures “East ● Online on FB, website
of disabled people.
meets West”.
● Funds only from founders.
● Family-running business

COST STRUCTURE REVENUE STREAMS


Main cost: ● Revenue from clothes and fashion sales
● Materials and Labour cost for products (clothes)
● Overhead cost including location cost
● Abroad events organization cost
2. Chula’s Competitive Advantages
- Product differentiation :
● Clothing designed from a mixture of influence mainly Spanish and Vietnamese, through the works
which can touch different community and this is in line with international trends. it allows a
geographical expansion of the customers.
● Singularity, Handmade and artisanal clothing "slow fashion" exclusive and made-to-measure
(ethical and social, respectful of the environment) as opposed to fast fashion. These are quality
products.

- Strong customer loyalty :


● Very close relationship with the customers (the company takes into account the advices, the
opinions, the feedbacks of the customers) and the company holds the information of each customer.
This allows the company to better understand the tastes and expectations of Vietnamese consumers
and to adapt its production to that.

- Employee inclusion philosophy:


● 65 employees, 75% of whom have physical disabilities (these people have strong abilities to solve
production problems). Constant dialogue with the employees which allows us to adapt to the
demand.

- Sustainable production
● Fabrics mostly came from local suppliers which were ethically produced and carefully traced
3. Sources of Development
Chula customer and turn over development main Trends about Chula’s customers:
sources:
- Vietnam: HSBC’s Expat 2019 Global Report
● Local people: - Vietnam is in Top 10 countries for expatriate
○ Expats who are seduced by the mix of influences from culture workers.
from West to East - Expats in Vietnam annually earn $90,408 on
○ Vietnameses who are not denying the East but attracted by the average, with 31 percents seeing an income
West rise of 25 percents and above - Both
● Tourists from Europe, America, Asia discovering Vietnam proportions are higher than the global average.
- Outside of Vietnam: Growth of visitors’ arrival in
● Customers in more than 30 fashion pop-up events in 20 countries. Vietnam 2015 - 2019
Global Ethical Fashion Market

Growth Value Source: TBRC Source: CRBE


Forecast ($)
3. Sources of Development
Chula’s stores in Vietnam are located in the
most popular tourist and expat locations. What prompted Chula’s growth?
External
West Lake and City Centre 1. “Slow-fashion” and niche market with potential and
of Hanoi - Capital of increasing target customer segments.
Vietnam 2. Support of Vietnam embassies abroad to promote
Chula’s products as a part of Vietnamese culture to
people in prestigious place like Rome, Berlin,
Dubai,...
3. Strong branding from pop-up stores, online
Thao Dien Area in Ho Chi channels & world-wide events
Minh City - Biggest City of
Vietnam
Internal
1. Wisely locate physical stores in Vietnam and closed
ineffective stores in Bangkok and Madrid.
2. Fashion Pop-up Sales and Promotion Events
Hoi An - Most famous Strategy in many countries.
Ancient Town in Vietnam 3. Unique: Culture blend from Spain & Vietnam
4. Facility and Obstruction

STRENGTH/FACILITY WEAKNESS/ OBSTRUCTION


❑ Expansion over VNese borders and notoriety
❑ Eco friendly products / Change in customer buying
→ May be hard to answer all customers demand and still
behavior
be artisanal. There’re also problems regarding the human
(i) Customers are taking into account more and more
resource, logistics, large scale and cross-border
about the eco friendly producing and social
management, all of which must be seriously funded while
inclusion aspect.
the business now is solely based on the owner’s equity. It’s
(ii) The Vietnamese (local customers) are patriotic and
an inherent risk of the change of scale
have a tendency to support domestic products
❑ High prices
more. (refer to: H&M recent incident in Vietnam)
→ They’re selling with prices for the upper class while also
❑ The free trade agreement between Vietnam and the
not positioning as haute-couture
EU zone
❑ “Fast fashion” competitors ⇒ Firms like Zara, Uniqlo and
→ It came into effect in august 2020 and it will make
H&M just arrived in the VNese market and are drawing
easier for Chula to export to Europe. Moreover the free
inspiration from haute couture models with competitive
trade agreement will remove VNese tariffs of 7.5% on EU
prices
textiles as soon as it enters into force. This will enable
❑ Technology advancement:
Chula to use high-end European cotton and linen in
Chula is being slow on applying technology on both the
addition to the textiles it sources from Asia
production and the selling stage.
❑ Self-running business: the owners have full control of
the business without being affected by the investors
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5. Challenges pre/post Covid-19
PRE-COVID 19

The possibility of creating an on-site workshop in countries outside of


1 Vietnam, to meet local demand with the same personalized customer
relationship, as in Vietnam.

Big competitor
2 ● Fashion brands at moderate prices, Zara, H&M and Uniqlo were quickly revealed as very
attractive for young Vietnamese customers
● Vietnamese brand: Canifa - have diversified their product range, while improving their
design and approaching buyers through new channels. High-end local brands - such as
Elise, Alcado, Coco Shin and Magonn, among others - are renewing the design of their
products, in line with international fashion trends to better satisfy their customers
5. Challenges pre/post Covid-19
POST-COVID 19
Changing consumers’ behaviours
1 Decrease income of customer, especially expats, customer prefer value products with low price.
Transition from offline to online sales channel.

The capital investment in the fashion and garment industries has narrowed
2

Production and supply capacity is limited


3 High overhead and location cost > Chula has closed down 2 stores in centre Hanoi and Hoi An

Low tourist traffic to Vietnam → decrease a large number of targeted


4 customers

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