Sustainable fashion: Creative core of Vietnam’s economy

A shifting creative landscape

Over the past three decades, many countries have embraced creative economies to leverage knowledge, talent and cultural identity. First articulated in Australia’s Creative Nation report in 1994 and later expanded through the UK’s initiatives in 1997 this model highlights the critical role creative individuals, and micro and small enterprises (MSEs) play in generating employment, adding value and enhancing quality of life through intellectual and cultural resources.

In Vietnam, the creative economy is experiencing rapid transformation. Directive No. 30/CT-TTg, issued by the government in August 2024 prioritises investment in human resources and technology for cultural industries such as fashion, handicrafts and design. However, Vietnamese government policies and media often use the terms cultural industry and creative industry interchangeably, resulting in ambiguity that can undermine clear strategic direction. Vietnam has notable creative initiatives such as Vietnam International Fashion Week (VIFW) and Vietnam Design Week (VDW), yet these are primarily privately driven and lack sustained strategic governmental support.

Successful models in South Korea and China highlight this gap. Seoul Fashion Week, supported by the city government, integrates trade networking, exhibitions and education through structured initiatives like the Seoul Collection and Fashion Fair. Similarly, Shanghai Fashion Week has enjoyed comprehensive backing from China’s Ministry of Commerce since 2001, building a comprehensive creative ecosystem. By contrast, Vietnam’s vibrant yet small-scale fashion enterprises, continue to navigate challenges due to insufficient policy guidance, public-sector investment and media recognition.

Despite these constraints, MSEs are often grouped within the broader SME category (small and medium-sized enterprises), which accounts for approximately 80% of Vietnam’s textile and apparel industry and employs over three million people. They operate as family-run or small group enterprises, lacking large-scale factories or major marketing budgets. Yet these businesses are shaping a sustainable fashion ecosystem with a distinctly local identity. 

How MSEs are driving sustainable fashion 

A study conducted in late 2024 by Associate Professor Donna Cleveland - Dean, and Ms Lam Hong Lan Associate Lecturer (Fashion) at the School of Communication & Design, RMIT Vietnam, reveals that these MSEs are quietly fostering what researchers term a “circle of prosperity”, where four pillars of economy, culture, environment and society are not only advancing in parallel, but are interwoven in a deeply interconnected way.

Through five case studies based in Hanoi and Ho Chi Minh City, including brands such as Linht Handicraft, Kilomet109, Moi Dien, KHAAR and Dong Dong, the research team illustrates how MSEs maintain small-scale, community-rooted production while fostering innovation that is both sustainable and culturally rich. Linht Handicraft partners with H’mong women in Sapa, and uses handwoven, indigo-dyed textiles to produce locally grounded products. Moi Dien, the brand founded by designer Tom Trandt, operates on a zero-waste model and collaborates with retired seamstresses in Ho Chi Minh City. This approach preserves traditional skills while creating a flexible production chain. Kilomet109, under the direction of Thao Vu, works with seven ethnic artisan communities across Vietnam to revitalise traditional dyeing and weaving techniques.

These enterprises are not only preserving cultural heritage but also proactively incorporating technology and circular design principles to enhance sustainability. KHAAR, a young label founded by Kha Ngo, uses AI to generate zero-waste cutting patterns from leftover fabric. The brand has expanded its influence through international events such as Vietnam Design Week, Elle Fashion Show and Vogue Singapore. Meanwhile, Dong Dong, founded by Anh Tran, specialises in handbags made from recycled advertising tarpaulins and industrial packaging. Around 80 per cent of its raw materials are sourced from seafood farms and supermarkets in the Mekong Delta.

However, the research also highlights systemic challenges that local fashion MSEs face. Many struggle to scale up due to limited capital and infrastructure. Existing tax policies are often incompatible with the operating models of businesses that rely on recycled materials or informal labour. Dong Dong was fined for being unable to present VAT invoices from suppliers of used materials. Brands such as Moi Dien expressed a desire for accessible public spaces to showcase their work and build connections, yet Vietnam lacks models similar to the Creative Market Halls found in South Korea or Singapore. Symbolic forms of support, such as recognising craft-based innovation as a national value, remain underdeveloped.

Recommendations for a prosperous creative economy

Drawing on field research and the Prosperity Fashion framework, the research team proposes three policy directions to effectively and sustainably support MSEs:

1. Enhancing fashion education: Core principles of sustainable fashion, zero-waste production and community-based design approaches should be more explicitly integrated into fashion and design education at secondary and university levels.

2. Investment in public spaces: Investment in public spaces that allow MSE brands to exhibit products, educate consumers and connect with one another.

3. Administrative and financial reform: This involves administrative and financial reform, including simplified tax procedures, formal recognition of non-traditional business models, and incentives for businesses that use recycled materials and engage local labour.

If given the right opportunities and policy support, MSEs could play a key role in shaping a culturally distinctive creative economy in Vietnam. These enterprises reflect a global movement towards sustainability, and show the potential of small tailoring studios, ethnic minority communities and passionate young designers. They are helping to build a fashion ecosystem where progress is no longer measured by production speed or market size, but by cultural richness, social cohesion and environmental responsibility.

The findings from this research have been published in Fashion Highlight, an international academic journal dedicated to fashion design. The journal explores the conception, production, and communication of fashion products, along with their cultural, aesthetic, and technological implications. Read the full article here.

Story: Quan Dinh H.

Masthead image: Vietnam Design Research Studio

Thumbnail image: Vietnam Design Research Studio