As part of our look at Vietnam's top brands of 2018, under the Asia's Top 1000 Brands report, we asked Vietnam consumers to identify their top home-grown brands, and Vinamilk and Viettel emerged on top. Here, in-market observers discuss what's behind the success of these brands, and what it will take to uphold that status.
What’s behind these brands’ appeal to local people? What are they doing that other local brands—or brands from elsewhere—are not doing? Do you see these brands’ future as under threat from encroaching global or non-local players?
Chandler Nguyen, VP of media planning, Essence: This may sound cliche but the fact is that these brands are providing not only good products but also great services to end consumers in Vietnam. Vinamilk and Viettel have been in the market for a long time, hence they have a deeper understanding of the local market and regulations. Their overall marketing activities are often a combination of CSR and commercial activities.
I am often very impressed with Viettel customer service initiative. Their service outreach is wide and prompt. Their customer service reps are often very patient and solution-oriented. For example, my father, who is in his 70s, often calls the service desk to ask for their help on internet services and he is one happy and satisfied customer!
I don't see a clear threat in the immediate future (between 3-5 years) as these brands have very dominant positions in the market. As I foresee, the threat in the long term would probably come from local players or joint ventures rather than 100% foreign-owned players.
Chris Elkin, founder, Doodle Brands: I’ve personally had the good fortune of partnering with Vinamilk to create and design their brands and packaging design. To me, Vinamilk stands out really strongly in the local market due to the emotional connection and trust it has consistently set out to build with the Vietnamese community.
First and foremost, this now ‘national brand’ has a strong moral compass: responsible, respectful and caring for the less fortunate in Vietnam, supporting many great causes to relieve poverty or to add nutrition to underprivileged children’s diets. Their products have a consistent high quality. They hire smart, experienced marketers, who are impressively agile at innovating and diversifying their their products around changing customer tastes; whether that’s in milks, yoghurts, ice-cream, fruit juices or new healthy beverages to grow their consumer wallet share.
With a growing middle-class set to double in size over the next five years, there will undoubtedly be more global competition entering the market. Having said that, in the 12 years I’ve lived in Vietnam, I’ve seen many global brands try and fail. A global brand’s ability to really connect and understand what makes ‘the locals’ tick is, however, a huge challenge, requiring a million and one small ‘local changes’ to win. I personally think the clever local brands, with that strong understanding of their customers, have more power than many give them credit.
Ian Paynton, MD, We Create Content: Vinamilk and Viettel deliver value to their audiences with their product ranges. Their products are strong. And better still, they know exactly how to communicate across traditional and digital touchpoints and touch the hearts of their audiences.
Vinamilk have been market leaders for a long time. They've been around for 42 years. You can go into a shop and ask for milk and a nearby kid will shout "Thank you Vinamilk". We're still not sure why exactly, but it proves Vinamilk is certainly always top of mind in the family. It was once state-owned, but privatisation and foreign investment has helped them grow their market share, react quickly to market trends and be more nimble with their brand positioning.
Vinamilk harnesses national pride brilliantly, which is bound to get you results in Vietnam. Such as their campaign "Rising Vietnam" where young kids sang about this growing country in different landmarks from north to south. A way to the heart of Vietnamese consumers is definitely through celebrating the beauty and success of Vietnam, and using kids to do so. It never seems to get old!
The same is true with Viettel. They launched 4G services and became the first to offer nationwide coverage right from the start. They also tapped into national pride to win over local audiences with their creative campaign "Vietnam oi", which showed how their technology 'bridges gaps' in a song and theatre performance with 108 performers from 54 ethnic groups across all generations throughout Vietnam, from north to south—a recipe for marketing success.
Creative that plays on nationalism and pride is always going to be a winner in Vietnam and hard to compete with by non-local players. Which is why I don't see global players as much of a threat. It seems to me that if there were two identical products in Vietnam, one international and one local (that could play on national pride), the local product would come out on top.
Sumit Ramchandani, head of Southeast Asia, Lion & Lion: Vinamilk has a clear advantage as the company is the largest dairy company in Vietnam, and the company possesses local expertise, know-how and understands that one size doesn’t always fit all. Marketing wise, Vinamilk is focusing on 360-degree marketing, both offline and online, to make sure the brands is omnipresent across channels.
Viettel is among the largest telecommunications companies in Vietnam with a default advantage of having strong connection with the government. Viettel has done well when it comes to innovation and technology, while at the same time having a personalised approach to their solutions.
When brands put in the effort to localise, whether it is the product or content, they will experience a greater brand connection with customers. In the future, we will see the competition between local and foreign brands heat up, especially following the recent change to the tax rules, which are favouring foreign brands. As an example, Red Bull has done well for themselves in Vietnam, and have already established a strong connection with the local audience, especially on social media.