Handmade products shipped from Vietnam have gained international recognition for their exquisite craftsmanship, innovative designs and competitive prices. Makers also accept mixed orders, set low MOQ, and put strong emphasis on customer service and after sales assistance. These factors have helped the country establish its position as one of the major sourcing centers for bags, hats, caps, scarves and hosiery in Asia.

There are over 50 ethnic groups in Vietnam, each of which has its own distinct language, lifestyle and culture. The country's artisans are known for combining beauty with comfort, and art with function in its handicrafts.

The high interest in Vietnamcrafted fashion accessories is brought about by the growing demand for quality merchandise that is reasonably priced. In fact, more than 80 percent of companies interviewed for this report anticipate their export sales to either stay the same or increase in 2009 despite the current global financial crisis.

Suppliers, however, are treading with cautious optimism as various issues make the business environment more challenging. The economic downturn has caused a decrease in consumer demand. In fact, the $59 million worth of handbags, wallets, suitcases and umbrellas exported in January 2009 reflect a drop of 16 percent compared to the same period in 2008.

The decline in overseas sales has forced many suppliers to cut manufacturing costs by streamlining production and reducing their workforce.

The following are some of the key trends we see in Vietnam's fashion accessories industry:

• Exports in the line are expected to experience modest growth in the next 12 months, with suppliers anticipating the economic slowdown to continue. To stimulate sales, companies will bring down product prices and release more designs.
• Manufacturers will either decrease or keep current price levels to remain competitive. To bring down quotes, makers will cut down on their use of imported raw materials.
• The US, the EU and Japan will continue to be the top importers of Vietnam-made fashion accessories, despite the drop in consumer demand in these areas.
• Companies will continue to upgrade their production facilities by sourcing equipment and machines from Japan and South Korea.

This report covers the main types of fashion accessories produced in Vietnam, including bags, hats, caps, scarves and socks.

The Products & Prices section details the features and price ranges of fashion accessories manufactured in Vietnam. It also includes the latest trends in style and materials.

The Industry Overview discusses key issues affecting exporters and elaborates on the composition of the industry, highlighting key characteristics of different types of suppliers.

The majority of fashion accessories suppliers in Vietnam are locally owned, with some being cooperatives. This report reflects the nature of the industry with 86 percent of featured companies wholly Vietnam-owned. A growing number of makers are foreigninvested or managed.

Production of fashion accessories is concentrated in Ho Chi Minh and Hanoi, with many suppliers also located in Binh Duong, Ha Tay and Hung Yen provinces. Companies that have established their workshops outside Hanoi and Ho Chi Minh also maintain offices and showrooms in these two key cities to be more accessible to buyers.