Q&A: The factors that make Vietnam a unique market

We asked five in-market experts for their insights into Vietnamese consumers.

Participants:

• Ian Brown, group executive creative director, Havas RIverorchid
• Alan Cerutti, CEO, Happiness Saigon
• Tarun Dhawan, managing director, Moblaze
• Luke Janich, CEO, RED2 Digital
• Hung Vo, CEO, Redder Advertising

What distinguishes the Vietnamese consumer market from others?

Brown: The Vietnamese people. They are unique, combining the toughness and resilience of some northeast Asian cultures with the gentle romanticism of some south-east Asian societies. It presents a Yin & Yang phenomenon - incredibly rich and beguiling to visitors, but also something that makes the Vietnamese audience especially sensitive to insincerity or skin deep brands.

Cerutti: According to Nielsen, Vietnam is one of the Southeast Asian markets, with the highest internet penetration with substantial weekly online duration, at almost 25 hours. Together with low access costs and reasonable smartphone prices, the internet is becoming an inseparable element in Vietnamese consumers’ daily activities: conveniently checking news while still in bed, choosing the most convenient transportation option just before stepping out of their home, or self-indulging at night with a huge collection of recreation choices. Vietnamese consumers have become more and more open to new things, especially the ones delivering “convenience” to their lives.

On the other hand, thanks to the booming of social network and user-generated content platform, specifically Facebook and Youtube, it has been seen that all Vietnamese consumers are now freely expressing their thoughts. Indeed, I have seen a big transformation of free expression in Vietnam: from long content on Yahoo! 360 in late 2000, until now, the era of bite-sized content. Thanks to that, it is now literally “all” Vietnamese consumers creating content: not only adults but also young children who now have their own Youtube channels with more than hundred thousand of views per clip.

Last but not least, Vietnamese consumers are now more willing to spend for high-quality products. According to Nielsen Global Retail-Growth Strategies Survey, price is no longer the main influence on Vietnamese consumers’ purchase decisions. Health and wellness have emerged to be among top priorities for Vietnamese consumers. They are now more cautious when selecting products in search of good quality and healthy ingredients.

Dhawan: As a culture, it is a very, very practical culture. This transcends into all aspects of their life – be it relationships, the way they celebrate a birth, mark death and the way they live their everyday lives. This also manifests itself in the ways they behave as consumers.

Vietnamese consumers are amongst the most practical consumers. Simple, straightforward communication works the best. It doesn’t mean advertising needs to be devoid of creativity; rather it must have an element of surprise, entertainment or intrigue but it can’t be too overly clever to the point it alienates the simplicity and the practical orientation of the consumer.

We see this practical orientation reflected in the success of sales promotions as well. ‘Price-offs’, ‘Recharge Top Ups’, or utility items as giveaways work well. On the other hand, prizes that offer ‘experiences’ don’t work as well. It' s not unusual for consumers to sell their prizes at a discount as they’d value cash more than such a prize.

Janich: The market is mostly targeted at young people who are very receptive to new brand/product concepts/perception/lifestyle. There are a lot of trends but the most important thing brands must focus on is their ability to help youthful people realize their true potential and maximize it. Vietnamese young people are ambitious but they don't know how to find a proper development path. Potential opportunities lie in looking at the older generation for brands to speak to. A minimal number of brands are focusing in this space.

Household structures are changing, with fewer families having children. People are now far more health conscious than they were 10 years ago. Vietnam ranks #1 as fitness fanatics globally according to the Global Web Index. Year by year, household incomes are rising and people have more expendable income, especially in the major cities.

Vo: From our perspectives and our experience with a few overseas markets, Vietnam is quite relevant in terms of consumer general behaviors and key trends, with some nearby markets as Thailand & China, especially in FMCG. There are some differences in some special categories including technology, home appliances, finance & banking, and others as the development & sophistication of the market is left behind other more developed marketers such as Thailand, Singapore.

Interestingly, in recent years, thanks to the fast catch up of Vietnamese consumers with global platforms as Facebook and Youtube – even Vietnam is a top country for consumers spending a lot of time on these platforms. The dots are better connected, the information is more transparent and quickly spread, consumers care more about societal problems in many areas, covering education, society, economics, and even politics. The significantly growing high involvement of Vietnamese consumers in these concerns may become an interesting trend that marketers should notice and can take advantage of.

 

What are some of the cultural issues brands need to be aware of when marketing?

Brown: The women are a lot more powerful and influential in all matters - including brand decision making - than either they or the men might care to admit!

Cerutti: Emotion plays a critical role in Vietnamese consumers, who get used to living together with big families and close neighbours. Hence, missing relevant emotional occasions would provide advertisers with fewer advantages. Did you know that Vietnamese consumers are getting familiar with Valentine Day, Mother Day, Father Day and even Family Day?

As people are now free to express their thoughts, self-expression becomes a need, especially to teenagers and young adults. In order to do that, they are themselves motivated to find new inspirations, day and night. Hence, any brand that would alleviate that expression need would easily stick in their minds.

Finally, in past few years, Vietnamese consumers have had discussions about plastic rice, infant nutrition scandals, and even dead fishes washed ashore at central Vietnam due to water pollution. Yes, various environment and food hygiene scandals make local people concerned about health and climate change. Having said that, I believe this is the right moment for advertisers to offer either high-quality and safe products or NGO standing for environmental issues to raise awareness and to speak with corporate and government leaders.

Dhawan: Vietnam is a very positive, happy nation (5th happiest in the world). Vietnamese people like to see the bright side of life, be that in cinema, entertainment or even in advertising. I recall a while ago when we were trying to sell a Ford 4W Drive, for which we had regional material that showed the car in a rugged condition with dirt all over. Consumers absolutely rejected this communication. What they wanted to see instead was a shiny, clean car with all the chrome being highlighted. This also highlights the challenges of adapting global campaigns for Vietnam.

There are many other cultural sensitivities that need to be respected. For instance, in some nations, while it may be fine to show a cheering crowd in a football stadium with the national flag face painted on their fans, it won’t go down well with censor boards in Vietnam.

At the end of the day, any foreign brand or individual is a ‘foreigner’ to the ‘host’ country and it is imperative to follow the latter’s cultural norms.

Janich: Vietnam is not uniform and there are regional differences. Taking Hanoi and Ho Chi Minh as an example, anything from seasonal associations (Ho Chi Minh doesn’t have a winter) to dialect/vocabulary discrepancies (same words mean different things in the North vs South) these are key to understand.

• Fake I, Fake II and the love for brands: There is a big gap between what consumers want and value. Vietnamese love brands, that is a given; anyone wants to be associated with a brand. However, rural vs urban dwellers have very different perceptions of what a brand is. It is unlikely that in urban areas that a fake or counterfeit will be accepted; in rural areas however the situation changes. That has led to a flourishing fakes marketing (including different official classifications and price points for “levels” of fakes, where Fake I is the most expensive, Fake II the least expensive.

• The love for what is Vietnamese: not only are Vietnamese people in love with brands, they are also in love with Vietnam. Any brand or communication that appeals to their history, nationalistic feeling or past of suffering (and recognition of the same) will win Vietnamese consumers’ hearts. This leads to two issues: first, the Vietnamese are not loyal to Western brands, since most fail to connect with them; second, there are not enough (quality) Vietnamese brands yet to meet all the needs of the consumers. Hence there’s a clear opportunity for international brands to consolidate their positioning, but they’re on a ticking clock. The mentality in Vietnam is very much family first and the individual second. There is also a constant struggle to balance the desire to be modern and free like the West but maintain traditional values at the same time.

Vo: Family and humanitarian values are what Vietnam consumers do really care about. The differences in marketing perception, family rituals, core values in the North and the South of Vietnamese consumers should be considered carefully when a brand wants to attack the whole country. Selfish/individualism encouragement marketing may be not appreciated by the mass consumers in this market.

 

Is there anything advertisers need to avoid?

Brown: Knocking copy or direct negative comparisons. They’re seen as clumsy - just plain bad manners.

Cerutti: Don’t underestimate the voice of consumers. Again, in the era of self-expression where consumers’ opinions are willingly shared and, additionally, word-of-mouth from friends and relatives influence the brand/product choice of most consumers, the advertisers should spend time and effort to increase positive sentiment, and to understand more about the usage experience. Moreover, this would also help reduce potential crisis.

Don’t think and act globally. Act locally! In some specific industries, such as banking, Vietnamese consumers prefer the local choice. Hence, though having advantages as international, premium or high-quality, the international brand should step-by-step integrate into Vietnamese lifestyles, be a part of Vietnam through social activities and brand connection programs. One good example is how Starbucks immersed itself in Vietnamese coffee culture: introducing Starbucks Reserve that offers strong, thick, full bodied coffee with beans sourced from mountains of Vietnam. This engages with Vietnamese ways to enjoy coffee and evokes the local pride in coffee.

Janich: Avoid politics, price wars and being cheap when it comes to PR or crisis management. References to the war are a no. Make sure you’re culturally sensitive.

Vo: Offensive, overly dramatic, tragic, or fear-attacking methods would not be recommended when marketing in Vietnam.