HANOI: Procter & Gamble, the consumer goods group, is attempting to strengthen its position in Vietnam, which is seen as one of the key emerging markets of the future.
The company re-entered Vietnam – listed among the "next 11" developing nations due for rapid growth – in 1994, a year after the US trade embargo was lifted, having been in place since 1975.
"Vietnam is a young culture, very interested in trying new things, so you don't have to be the 100-year incumbent to be able to win," Deb Henretta, group president of P&G's Asia business, told Bloomberg.
Indeed, some 45% of Vietnam's 90m population are under 25 years of age. Per capita income has also expanded from $220 in 1994 to $1,168 in 2010, the US Department of State has reported.
As well as this outlet, similar countries in the region, like Myanmar, are increasingly becoming the "growth engines" for Procter & Gamble, Henretta continued.
Unilever is currently the number one player in Vietnam's personal care and homecare segments, while Kimberly-Clark leads for nappies, as does Beiersdorf for skincare. Gillette, P&G's razor brand, holds the top spot in its category, however.
According to Euromonitor, the insights provider, sales of nappies, personal care, homecare and beauty products rose by 14% in Vietnam in 2011, to $1.4bn. Consumer spending will grow by 42% from 2012 to 2016, it added.
"Vietnam is the next upcoming market, and there's fierce competition," Oru Mohiuddin, an analyst at Euromonitor, said.
Alongside making considerable use of advertising on TV, the most important medium in Vietnam, Procter & Gamble has sponsored Vietnam's Got Talent, the entertainment series.
Its broader tactics include employing a boat in the Mekong Delta to access rural shoppers living on the water, selling low-cost lines like sachets of Downy Single Rinse laundry softener. "We want to win with all levels of consumers," said Henretta.
Thanks to research in over 100 homes, P&G discovered customers were adopting novel uses for its brands, like using Ambi Pur, its air freshener, on motorcycle helmets in a humid climate. It has even set up "spray stations" to promote this.
It also runs education programmes in schools, such as teaching students about the benefits of washing their hands, and offers healthcare and other services to poor communities, both of which can then be used to showcase its brands.
"They have to do this propaganda-esque process to eventually have a consumer who wants to buy their products," Ali Dibadj, an analyst at Sanford C Bernstein. "It's a time-tested tool that companies use."
Data sourced from Bloomberg; additional content by Warc staff