Jessica Newfield

The Future of the Retail Industry in Vietnam: Interview with LanVy Nguyen

Jessica Newfield
The Future of the Retail Industry in Vietnam: Interview with LanVy Nguyen

The fashion retail and textile industry has been criticized for years because of its reputation for harsh work conditions in factory production, and its lack of due diligence in enforcing sustainable supply chain requirements, usually in China and South-East Asia. Nonetheless, new social enterprises have emerged in the sector recently, becoming a force for empowering artisans and textile workers through innovative production practices. Fashion4Freedom (F4F) is such an example of a company changing the sector.  F4F is a full production company created to serve as a responsible alternative to the current production and sourcing options for fashion retailers in Vietnam. F4F provides the first socially responsible, ethical and transparent supply chain in Asia created by designers for designers.  In 2015, Fashion4Freedom was recognized by the largest community of foreign and Vietnamese businesses—the Supply Chain Council in Vietnam—as SME of the year for Ethics and Innovation.  In 2016, the Prince Claus Fund recognized their work as the "future for Vietnamese craft" and funded their project to map artisans of Central Vietnam with the end goal of creating a version of Alibaba for artisans, paying particular attention to storytelling and design.

Here is our interview with LanVy Nguyen, the founder of F4F:

Margareta Barchan: Can you tell me about your professional background and how that evolved into Fashion4Freedom?

LanVy Nguyen: About 10 years ago, I left corporate finance to test my luck and my skills in an emerging market that was both endearing and ripe with opportunities for development and trade. There was plenty of growth in manufacturing in Vietnam and the US market was happy to balance trade with a partner comparable to China in terms of prices and ease of dealing. The business ventures were fabulous, but having witnessed a few too many underhanded business dealings and incidents of injustice, it was too hard for me to continue and accept the status quo. Yet, these events were too real to ignore. I did what most people who cared about issues of human exploitation do. I reached out to international NGOs in Vietnam whose specific goals were to end the type of exploitation I encountered.  To my horrible dismay, I found that some international NGOs in South East Asia pimped the poor better than the local mafias pushed their sex workers. I wanted to focus my energy on something that was less program-centric, and more solution-driven. While I believe wholeheartedly that capitalism can be compassionate, conversely humanitarian goals and entities should have expiration dates and exit strategies.  In 2010, we formalized that idea into what I call our "AID+TRADE" model.  We found that disenfranchised people put themselves in harm's way not because they lack skills, but because they are opportunity-poor and capital poor.  Too often, city-dwelling foreign NGOs attempt to create impact through some well-intended program to teach villagers how to fish when in reality what villagers needed were better rods, equipment, vehicles and basic infrastructure. Our AID-model looks at a village of artisans and asks how we can pump in the right kind of capital investment so that these highly skilled artisans would not have to migrate to a big city where both financial opportunities and exploitive risks occur.  What we do is absolutely oppositional to what’s happening in the Development Industry. We are taking an expensive risk with people purely based on their skills and potential. We take the position of a venture capitalist in the rural communities.  The payback is cultural preservation, economic justice, and in the long run, an alternative manufacturing option, a new kind of transparent and ethical supply-chain offered to the market that can also generate financial gains for us.  We work mostly with artisans and rural enterprises in Hue, Vietnam. We’ve worked with 69 artisans who have received funding for new equipment; in turn, our 69 incubatees have enriched over 41,000 people in their communities. We are not a traditional fashion company. We bring together manufacturers, designers, sponsors and philanthropists.

Barchan: Have you ever have thought of what you are doing as a brave initiative?

Nguyen: I’ve done nothing noble; I do what I think is responsible and I feel privileged to have the opportunity to put my principles in practice.  From the beginning, Fashion4Freedom has gone against the grain. Most retail suppliers and brands include Corporate Social Responsibility principles in their supply chain because they see it as their duty under new regulations to fulfill obligations rather than to make industry changes for the better.  Most investors think that we are doing things “wrong” by investing in low tech: artisans handmaking crafts rather than 3D printing as an example.  I see this however as an important investment in renewable materials and the preservation of culture.  So, all funding has to come from personal sources because other businesses don’t believe that what we offer is the right standard for quick profit.  We are not just producing fashion or garments. We are tapping into the massive fashion industry to create opportunities for economic justice for artisans marginalized and pushed outside the traditional boundary for trade, and this is why we are even so vastly different from the simplistic certification of fair trade products. I strongly believe that everybody wants to possess objects of beauty. Most of us would be very concerned if our egos were draped by products of unfair labor or other types of exploitation, but you can’t approach consumers through guilt. The first step in starting a serious conversation with consumers is to draw them in with an interesting and beautiful product. We lead with great designs and examples of best practices of our own. Once consumers are interested in the products, they are often persuaded by our purpose in hearing the stories of our artisans.  

More recently, ethical fashion has become trendy and the big fashion companies are turning to us for help because we have a solid reputation.  What we built goes far beyond a CSR initiative; that said, what we’ve built can certainly help someone improve their company’s CSR program and we can help impact their bottom line by tying it all back to their business operations.

Barchan: What was the turning point for you?

Nguyen: There are many incidents in our lives that inform and, sometimes, compel us towards decisions that would become pivotal. I was a boat refugee from Vietnam and my experience as both a Vietnamese and an American has truly shaped me. I grew up with the American Dream for wealth.  My husband and I started our career in finance: he as an investment banker on Wall Street and I did corporate finance, specializing in merger/acquisition negotiation. On the day of the tragic events of September 11th,  we missed our ferry into the World Trade Center by two minutes and, thus, saw the collapse of the Twin Towers from the Jersey riverfront side.  After 9/11, the US was clearly at war.  I was struck with the realization that I have never lived without the presence of war.  I was born during the time when America invaded Vietnam and as a result of 9/11, Americans called for another invasion.  

After being witnesses to something like 9/11, we both knew things would change.  As a consequence, my husband decided to pursue some personal hobbies and I decided to pursue my artistic and design orientation.  Opportunities brought me back to Vietnam, but I knew from the very beginning that given the option to start something new, I wanted to build “that something” responsibly and ethically.

Barchan: Can you give an example of a decision you made that was met with resistance?

Nguyen:  Everything about F4F was met with resistance because it called into question the conventions around retail.  At the time, we weren’t a formal NGO yet. Our way of managing philanthropic programs proved more effective than what NGOs were doing in Vietnam; many were simply band-aiding symptoms rather than finding solutions to the main and original problems. We wanted capitalism and thus, businesses to be a part of providing social solutions. We also understood that we needed to change the way production was done because unsustainable practices lead to conditions for social problems. For example, when marginalized producers leave their villages and migrate to a new city to work at factories they often incur huge debts that might lead to years of labor exploitation in order to pay back such obligations. We make investments at the village level to ensure systematic changes and provide economic choices.  We work directly with village artisans and share the profit of our collective labor. Marginalized producers and artisans need more than mere introductions to western retailers. A weaver from Laos might get an introduction to a brand, but the weaver probably doesn’t have the knowledge to assess and control quality or export in time to meet market needs. Small producers don’t need middlemen, they need partners who understand their needs for long-term sustainability.

Barchan: Can you give an example of a personal challenge you have been facing?

Nguyen: We set very high standards so the challenge is to consistently achieve and go beyond the last set of goals. Onward and upward is always my personal challenge but also what I continuously strive for.

Barchan: Do you have doubts about what you are doing?

Nguyen: All the time. We are challenging the system all the time and that is met with criticism from all sides.  

Barchan: What is your vision for the project in the future? Will it survive even after you stop leading it?

Nguyen: Definitely. Vietnam is only a test for us. We want to become much more global. When I engage people and seek future leaders for the project, I usually look for people from 22- 26 years old with aspirations to do meaningful work. I would rather have young people with hunger, drive, and courage than those who have experience and deflated ambition. I encourage both experiments and mistakes to happen because you cannot have moments of great discovery without failures. Young people need to understand and embrace failures so that they can meet the challenges of attempting to reach for success.

Barchan: Do you have advice for future leaders to become Brave Leaders?

Nguyen: Be honest with yourself about your own personal goals and abilities. Give up when you have to; it sounds very selfish but the only way to make others happy and drive success is if you’re happy and can truly contribute.  When you become unwilling or unable, you become deadweight.  When you acknowledge and accept your shortcomings, then you can grow and better understand your capabilities and what you can offer. Only then can you grow and blossom in ways you never thought possible.

 

This article was written and edited by Jessica Newfield.