Vietnam's largest listed conglomerate has dethroned Vinamilk as Vietnam’s favourite local brand for the first time in several years, according to Campaign Asia-Pacific and NielsenIQ's Asia's Top 1000 Brands consumer survey.
Founded by the country’s richest man, Phạm Nhật Vượng, Vingroup began as a business producing dried foods in Ukraine in 1993. It has expanded into a wide range of industries through the years, including real-estate development, retail, education, healthcare, technology, and smartphone manufacturing. It became Vietnam's first domestic car manufacturer in 2017 with the launch of its VinFast division.
VinFast has emerged as one of the company's most ambitious bets. It has become the fifth car brand by sales in Vietnam in just two years, after rolling out its first cars in 2019. It has since set its sights on becoming a global electric vehicle (EV) leader, aiming to deliver its first EVs to the US, Canada and Europe next year and open a factory in the US. In July it hired a former executive of Volkswagen Group America, Michael Lohscheller, as its global CEO to lead the expansion. It is also reportedly eyeing a US public listing. In order to "mobilise all resources" for the development of VinFast, Vingroup announced earlier this year it would be shutting down its electronics devices unit, VinSmart.
"As a domestic company, VinGroup has shown a tremendous amount of vitality and the confidence to compete globally in a way that’s quite unmatched in the local market," explains Saby Mishra, the founder and CEO of Ho Chi Minh City-based MullenLowe Mishra.
Hesperus Mak, the head of strategic planning at TBWA Group Vietnam, adds: "Vingroup represents an entrepreneurial spirit Vietnamese aspire to. While Vingroup is a pioneer in automotive and technology industries, their ambitious launch of VinFast and upcoming export to the US represents a sense of national pride for many Vietnamese."
In addition to its work representing Vietnam on the global stage, Vingroup's ascension to the top local brand is also attributed to the aid it has provided during the pandemic.
"The dethroning of Vinamilk by Vingroup comes down to the brands' different activities during the pandemic," explains Tai Le, the director of operations and ecommerce at independent shop Red2Digital. "Rather than stay silent, Vingroup put the community in Vietnam first. They brought their motto to life, 'To create a better life for people', in the most challenging of circumstances, providing medical equipment, vaccine doses, and funding for the government to counter the pandemic. As a result of this goodwill, their brand awareness skyrocketed in the country."
Mishra agrees that Vingroup took an "early and proactive role" in Vietnam’s fight against the pandemic.
"They have been in the news for vaccine sourcing at scale and national rollout," MIshra says. "Subsequently they have been in talks to get mRNA Covid-19 vaccine technology from a US company. They produced and exported the first made-in-Vietnam ventilators at an affordable price. All in all this is a domestic company which has been seen by people as a clear front-runner helping the nation at a critical time."
Vietnam’s top 10 local brands:
|Trung Nguyen Coffee||Viettel|
|Viettel||Trung Nguyen Coffee|
|Kinh Do||Hanoi Beer|
|Vietnam Airlines||Hao Hao|
Vietnam Bank for Agriculture
and Rural Development
|TH True Milk||Ho Chi Minh City|
|Ho Chi Minh City||Vietnam Airlines|
|Hao Hao||Ba Vi National Park|
The above list excludes multinationals that respondents named despite the survey question asking for brands that originate in Vietnam. There were six international brands named in Vietnam's top 10 local brands this year—double that of 2020. This includes new entrants Google (7), LG (8) and Panasonic (10), alongside existing ones Honda (3), Samsung (5) and Apple (9). Coca-Cola was last year associated in the top 10 ‘local brands’ but slipped down the ranking in 2021.
Ingrained in culture
These brands are so deeply ingrained in Vietnamese daily life and culture that consumers think of them as local. This is despite several of these brands doing very little advertising in Vietnam, according to Le.
"Google and Honda enjoy high awareness and brand affinity due to their central role in daily life," Le says. "For Honda, they have been the go-to brand when it comes to motorcycles since 1975. For generations, people have associated Honda with quality and excellence. Similarly, since the rise of the internet in Vietnam, Google has been a leading search engine (even when Yahoo was still trendy).These two brands are deeply embedded within Vietnamese life."
Apple symbolises ego and luxury in Vietnam, Le adds, representing the top tier in Maslow's pyramid of needs. Samsung, meanwhile, has proved to be "the phone for everyone due to its high specs at a more friendly price point". Moreover, while Chinese brands such as Oppo and Xiaomi are also present, Le suggests they struggle to find a market outside of major cities where Samsung dominates.
Samsung has also mastered the art of localisation. It localised its 'Do what you can't' platform in Vietnam in late 2019 and has consistently used local celebrities and influencers in its communications, making the brand feel 'local' in the mind of Vietnamese people, says TBWA's Mak. Samsung is the number one brand in 11 of the 14 markets measured in the overall Top 1000 Brands report.
Meanwhile, brands like LG and Panasonic benefit from the first-mover advantage, Le says. They were among the first electronic products that came to Vietnam, alongside TCL, Arirang and Electrolux. "These brands understand the need to balance price and quality, and their products are present across the Vietnamese economy and remain ingrained in Vietnamese culture," says Le.
Panasonic also unveiled a partnership with Grab Vietnam in January this year to create an anti-viral mobility experience for passengers. Grab cars were equipped with Panasonic’s Nanoe-X technology, which traditionally is used in Panasonics air-conditioner, to provide a clean air solution. Mak describes the initiative as a "clever, disruptive and timely execution" that put Panasonic into the minds of consumers.
Adapting to the pandemic
Back to Vietnam's homegrown brands. Brands that adapted their offerings around pandemic restrictions and dialled up marketing activity prospered. This is true for three brands that joined the top 10 ranking: Hanoi Beer, IT company FPT Group and Ba Vi National Park.
"Hanoi Beer's rapid rise is due to how well they adapted to the pandemic," explains Le. "They immediately offered online shopping and delivery services within Hanoi, winning customers from other brands in the process."
"Similarly, FPT Group transitioned seamlessly during the lockdown," Le continues. "As an IT company, their services became more important as the whole of Vietnam moved online and shifted their work and study to digital platforms."
As well as adapting to the pandemic, Hanoi Beer also began promoting its brand again, tapping into a sense of comfort and nostalgia, after several years without much communication, says Mak.
"The brand leveraged famous celebrities representing three generations of Hanoi, while the communications tapped into the feeling of familiarity of days gone by, through storytelling of how the beer brand accompanied Hanoians throughout the generations," says Mak. "During the height of the pandemic, we witnessed consumers gravitating to the familiar and becoming more nostalgic. Hanoi Beer offered a sense of comfort and stability during a time of chaos and crisis."
Ba Vi National Park increased its community outreach and PR as it became a popular domestic travel location for Hanoians during the pandemic. For instance, the park recently opened a sightseeing by hot air balloon service, and has run social campaigns on many traveling sites to gain attention. "By offering content in a way that only they can, Ba Vi National Park has succeeded in getting people talking about it online," Le says.
These new entrants to the top 10 replaced Mondelez-owned snacks business Kihn Do and TH True Milk which, Mak points out, both suffered from negative incidents in the past year. Kinh Do was sued by Bibica for market manipulation and copyright infringement, while TH True Milk was implicated in a hospitalisation. Vietnam Bank for Agriculture and Rural Development also slipped out of the top 10.
Elsewhere, instant noodle brand Hao Hao rose to sixth in the ranking, which Le attributes to "tremendous demand during the pandemic".
Mishra agrees: "Hao Hao is the instant noodle giant of Vietnam and is basically the everyman low-cost convenience food. During the pandemic suddenly this brand found itself in the right place at the right time—thus becoming the ubiquitous brand-of-choice for pantry stocking at national scale for Vietnamese people.'
Hao Hao has also gained consumer attention from its CSR programmes, including a charity event with comedian Hoai Linh (video below) that brought gifts to disadvantaged children.