Since its inception in the country in 2008, Asmara Vietnam – one of the leading buying houses in Vietnam – has been a name purely associated with trust and quality. It’s never easy to build an image and then retain it successfully, and the man who has been instrumental in taking Asmara to a position where it is today is the young and exuberant Anil Mishra, Country Manager, Asmara – Vietnam.
Working for over 45 suppliers, the three major product categories which Asmara mainly sources from Vietnam are outerwear, bottomwear and contemporarywear. “When we started this company, I specifically chose outerwear as a category because we could count on our fingers how many countries in the world can do outerwear – not many countries can do heavy jackets; as far as outerwear is concerned, value-wise it is 50% and volume-wise 30%. Adding further on this, Anil specified, “Bottomwear is our second main category, which is value-wise 30% and volume-wise 50%. By 2011, things were changing and we were by then 10% cheaper than China.” Focusing on a particular category always helps carving one’s own niche and Asmara has been able to hit the right note at the right time, which eventually helped it to enhance its growth.
With an astounding annual turnover of US $ 105 million from Vietnam alone this year, the company is close on the heels of its Bangladesh and India units, which have generated US $ 113 million and US $ 127 million, respectively. An optimistic Anil shares, “Since last 3 years, our growth has been very good. Asmara Vietnam aims to take the lead in the next 2 to 3 years and consistently grow at 40%; then only the Group as a whole can grow.” The company’s growth strategy also includes taking away the business from China and bringing it to Vietnam. In fact, Anil feels if there is any country that can pose a threat to Vietnam, it is only China because the latter has the ability to successfully re-invent each time.
Substantiating further, he briefs “Anything that can be done in China can be done in Vietnam, so south-east Asia is never a competition. It is China which is our competitor.”
Vietnam, Anil feels, has a stronghold in south-east Asia with the only country gradually challenging it being Myanmar. “I must say Myanmar is coming up. We have explored that place and in couple of years, should have our office in Myanmar too,” shared Anil with a positive touch.
Despite Asmara doing very well in Vietnam and the industry on the whole thriving in Vietnam, Anil is a bit downbeat about the emergence of the electronic sector. After being in a dominant position for over a decade, the garment sector got its first jolt in 2016 when the electronics sector made 30 billion and surged ahead of the garment sector which made 28 to 29 million. “This year too, the trend is the same. Samsung has put up a huge plant with 20,000 to 40,000 workers. When the literacy rate is so high in Vietnam, you don’t expect people to be in the garment industry forever.”
Re-invention is the only option for surviving and growing in Vietnam. “Basic items can go to Africa and other countries but there will still be niche for fashion products. If we maintain both product and innovation, there will be constant growth. In addition to having political and economic stability, education is very good here. Also, there have been hardly any instances of natural calamities…; in fact, there is lot of harmony and happiness here. There are only 48 working hours and, more importantly, very less holidays in a year. All this eventually adds to excellent productivity and efficiency; so the future might still be better,” mentioned Anil.
Delivery, quality and price encompassed by compliance are the major prerequisites that a buying house looks in a preferred supplier. Anil strongly believes that Vietnam has the advantage of the local labour law and the local Governmental structure which ensure that social compliance levels are of very high order. Corroborating on this further, he adds “Most of the industrial parks here are better than the residential areas. The set-up is beautiful, organized and systematic. If you have 100% space, the Government will never allow you to use more than 60%; instead you will have to keep the rest of the space open. Compliance is already there in the system, so we don’t have to work very hard.”
Anil also expressed relief about the TPP not being materialized as it would have led to gross imbalances. In his words, “In a way, I am happy TPP didn’t come through. Europe is today only 15% of the exports and if FTA comes through, it may go up to 20 or 25%. Had TPP happened, 47% of exports of US would have become 66% and that would not have been good. So, there should always be a right balance between USA and Europe. We don’t want to work in an ecosystem where supply and demand are unbalanced. So, TPP not coming means capacities are more open. We can drive better prices which the market needs.”
Though agreeing on the principle that duplication of any work is not good, Asmara believes there is nothing beyond customer satisfaction. When the suppliers fail to satisfy all the criteria, Asmara tries to bridge the gap. Interestingly, Anil classifies business management into financial management, order management and product management. “We finance all the business. We can define our different payment terms because of our buying power. Then comes order management. It’s all about T&A and merchandising and product management, something that is technical. Factories here are very strong in manufacturing but not in how the product has been developed and how the order has been generated and we bridge that whole knowledge gap. That’s how we justify our position,” explained Anil.
The company is today geared up for the FTAs between EU and Vietnam. Anil’s optimism is reflected when he says “As soon as the FTA comes through, we will be ready with our products. Moreover EU needs Vietnam more than vice versa.” With almost 50% of Vietnam exports being done to US and 15 to 20% to EU, the remaining share is majorly held by Japan (15%) and Korea (12%). “There is a good synergy between Vietnam and Japan. Subway in HCM City and airports are all sponsored by Japan. So Europe, Japan and Korea are at par,” added Anil.
Going forward, after having offices in HCM City and Hanoi, Asmara plans to open its new office in Danang in Central Vietnam next year. In addition, there are also plans to operate in Cambodia from Vietnam. “Today 25% of our business is coming from USA and 20% from Canada. We have also started business with Australia and Japan. In Europe, it is mainly Italy, Germany, Sweden, Spain and UK. Therefore, the focus is to go deep into the product and maintain it and thus efficiency level gets enhanced, which justifies our strong prices. Lots of things have been done and there is also hunger and drive to do more things at a faster pace,” concluded a cheerful and optimistic Anil.