Vietnamese consumers favour brands that have provided entertainment and delivery services, home staples and affordability.
While Vietnam was the top-performing economy in Asia in 2020, according to the International Monetary Fund—with a high rate of exports and a swift rebound in domestic spend preventing any economic contraction—consumers have still tightened their pursestrings to manage the ongoing pandemic.
Vietnam was one of the few countries in the world to see GDP rise in 2020, by 2.9%, and is expected to accelerate growth to 6.5% growth in 2021. But broad economic growth hasn't protected all individuals, with 45% of households in Vietnam reporting lower household income in January 2021 versus the same period in 2020, according to The World Bank.
As a consequence, consumption habits have shifted to favour essentials and brands at more affordable price points—a vastly different outlook to 2020, when luxury fashion house Louis Vuitton was one of the best-performing brands in Campaign Asia-Pacific and Nielsen IQ's ranking of Vietnam's top 100 brands, part of the exclusive Asia's Top 1000 Brands research.
There was no room for opulence or frivolity in 2021, as Vietnamese consumers were more likely to prioritise finding the same or similar products at a lower price point.
"The pandemic has been a challenging yet fascinating period for many marketers," says Tai Le, the director of operations and ecommerce at Ho Chi Minh City-based independent shop Red2Digital. "Over lockdown, we have realised that there is a difference between brands consumers need, and brands they want. Moreover, for many of these products, there are cheaper replacements when money is short. These are the brands that have flourished, while others have struggled."
Netflix bucks the trend
Bucking this trend is Netflix, which witnessed the biggest jump in Vietnam's ranking by a sizeable mark, up 112 places to join the top 100 for the first time. The cost of a Netflix subscription has been one of its biggest inhibitors for growth in Vietnam, where consumers favour free ad-supported content. More than half (52%) of Vietnamese consumers identified YouTube as their platform-of-choice for movie streaming in the first quarter of 2021, according to a report by Decision Lab, which stated that consumers were put off by Netflix's "relatively exorbitant subscription fees". Netflix is also competing against local streaming services FPT Play, VieOn and Galaxy Play—all of which offer competitive prices and packages. FPT Play has a 23% share of paid streaming services in Vietnam, while Netflix is in second place at 16%, according to Decision Lab.
Rather than competing on price, Netflix has ramped up its localisation efforts for the Vietnamese market, including tapping into the "extremely popular" Korean drama genre. These efforts seem to be bearing fruit—it has witnessed a 60% increase in its user base in the market since the start of 2020.
Hesperus Mak, the head of strategic planning at TBWA Group Vietnam, says: "Not only did Netflix offer trending K-drama that Vietnamese love to watch, they also invested further to cater for the Vietnamese audience by including a Vietnamese interface, subtitles and voiceovers. In addition, they also added some of the popular Vietnamese titles to their collection."
An important note: While Netflix has flourished from a sudden spike in home-bound consumers, this survey was conducted between April 12 and 30 this year, before Vietnam cities were plunged into months-long lockdowns.
Staple FMCGs and mid-range fashion
Fast-moving consumers goods (FMCG) companies that are viewed as both essential and inexpensive were among the brands that rose up Vietnam's top 100 brands ranking this year. These include P/S, Maggi, Pampers, Chin-Su, Close-up and Omo.
But FMCG also accounted for a large portion of the brands with the biggest losses in Vietnam’s ranking, a list which includes Meiji, Dutch Lady, Lipton, Aquafina, Nescafe.
Saby Mishra, the founder and CEO of MullenLowe Mishra, explains: "In general this year we see a clear trend towards staples and core variants and slight de-prioritisation of non-essentials, especially at mass-market level—which is understandable given pandemic-related economic impact and income irregularities. Therefore a market-leading laundry detergent brand like Omo or toothpaste brand like Close-up have moved up even higher in relevance as opposed to a Meiji. At tough times like this it’s all about relevance."
Meanwhile, as Louis Vuitton fell 33 places in the ranking, after recording one of the biggest jumps of 98 places in 2020, mid-range fashion brands Levi’s and Zara prospered, up 63 and 28 places, respectively. LV's rise last year correlated with the brand's launch of a major marketing campaign shot in Vietnam’s iconic landscapes as part of the label's 'The Spirit of Travel' series.
TBWA's Mak says: "Because it is a brand that is so out of reach for many Vietnamese, it is not surprising to see more affordable fashion brands lifted, especially in the climate of the pandemic when people are tightening their budget."
Le adds that the rise in mid-range fashion brands like Zara was further fuelled by business models focused on fast delivery and regular, irresistible promotions.
This year was a much more turbulent one for brands in Vietnam’s top 100 brands. Ten brands jumped more than 50 places in the ranking.
Brands that rose 10 places or more:
Netflix (95) +112
Michelin (76) +81
DHL (92) +80
7-Up (82) +68
Toyota (56) +67
Levi’s (74) +63
P/S (91) +57
Bridgestone (97) +57
Oreo (86) +56
HSBC (83) +52
Aeon (41) +36
Manulife (69) +32
L’Oreal (23) +31
Zara (22) +28
Maggi (30) +28
Pampers (68) +26
Vissan (60) +25
Chin-Su (40) +24
Close-up (98) +21
Omo (35) +18
Chivas (57) +18
Orion (79) +18
Abbott (87) +18
Muong Thanh Hotel (75) +14
Traveloka (80) +13
Dell (58) +12
Milo (34) +11
Trung Nguyen (51) +11
Twitter (77) +11
Lazada (29) +10
Petrolimex (38) +10
Local campaigns that lift consumers up
L'Oreal's lift can be explained by the execution of several campaigns over the past year to further localise its family of brands, Mak suggests. In March, L’Oreal Paris launched a campaign for International Women’s Day which aimed to empower Vietnamese women to take control of their future.
Similarly, Chin-su released a music video campaign to introduce its spicy sauce. The song leveraged the word “Mlem” in the chorus—a trendy term on Vietnamese social media that refers to something tasty and attractive that triggers you to make a “mlem” sound with your tongue, Mak explains. The video hit 11 million views and became a popular tune on TikTok.
Meanwhile, brands that had little to no local market executions have naturally slipped in consumers' minds. Coca-Cola suffered the biggest loss, down 53 places. Local market experts say they have noticed a dip in the brand's media presence and brand salience in recent years.
Mishra: "That and the pandemic-related lockdown and resultant on-premise closures have probably hit sales and dropped visibility at hubs such as cinemas and restaurants."
Le notes: "Some brands were well placed to take advantage of an unexpected event like the pandemic, and others were not."
Brands that fell 10 places or more:
Coca-Cola (66) -53
Meiji (89) -51
Dutch Lady (81) -47
Lipton (94) -45
Louis Vuitton (90) -33
Johnson & Johnson (67) -31
Aquafina (96) -28
Starbucks (52) -26
Hitachi (48) -23
Nescafe (85) -18
Vinmart (45) -15
Fifa World Cup (53) -13
Toshiba (27) -12
VietJet Air (59) -12
H&M (93) -12
Hao Hao (54) -11
MobiFone (42) -10
Electrolux (84) -10
Vietnamese brands had mixed fortunes. Vissan, Chin-Su, Muong Thanh Hotel, Trung Nguyen and Petrolimex all rose up the list, while Vinmart, VietJet Air and Hao Hao fell.
Vinmart's fall of 15 places may be due to the fact it is still in the middle of the business acquisition of Masan from Vingroup, Le suggests. "The costs associated with such a move, not to mention the cost of implementing a new brand, acquisition fees, and taxes, are all a tremendous burden on the company."
VietJet Air's decline can be easily explained by the fact the travel industry has taken a massive hit during the pandemic.
Hao Hao may have slipped in the top 100 ranking, but the instant noodle brand ranks as Vietnam's sixth favourite local brand, up from 10th in 2020.
Dairy manufacturer Vinamilk retained 10th place in the ranking. Indeed, all the brands within the top 10 remained the same but reshuffled: Electronics brands Panasonic, Sony and LG are rose while Apple slipped from second to fourth. Chanel overtook Gucci. Nestle slipped four places.
GrabFood and GoFood lead new entrants
There were 19 new entrants to Vietnam’s top 100 ranking, including five brands new to the overall list: food delivery services GrabFood and GoFood, chicken brand GÀ TUOI 3F, video game League of Legends and CP Group. This is explained in part to new home delivery and video game sub-categories in the Top 1000 Brands survey for 2021.
But GrabFood and GoFood have also become essential to the daily lives of Vietnamese, Mak says. "With an extensive period of lockdown and restaurant closures, food delivery has become a change in behaviour that is here to stay."
Meanwhile, an increase in leisure time explains the popularity of League of Legends.
New entrants to the top 100:
GrabFood (18) – new to the overall ranking
GoFood (33) – new to the overall ranking
GÀ TUOI 3F (46) – new to the overall ranking
League of Legends (55) – new to the overall ranking
Toyota (56) – up 67 places from 123
Manulife (69) – up 32 places from 101
Levi’s (74) – up 63 places from 137
Michelin (76) – up 81 places from 157
7-Up (82) – up 68 places from 150
HSBC (83) – up 52 places from 135
Oreo (86) – up 56 places from 142
Abbott (87) – up 18 places from 105
P/S (91) – up 57 places from 148
DHL (92) – up 80 places from 172
Netflix (95) – up 112 places from 207
Bridgestone (97) – up 57 places from 154
Close-up (98) – up 21 places from 119
CP Group (99) – new to the overall ranking
Instagram (100) – up 8 places from 108
Meanwhile, 16 brands fell out of the top 100 ranking, which Le says can either be attributed to not being essential or a lack of CSR campaigns during the pandemic. In addition, Jetstar exited its joint venture with Vietnam Airlines in 2020.
Brands that fell out of the top 100:
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