HO CHI MINH CITY: While several SE Asian markets face gloomier prospects in 2017, Vietnam's booming mobile connectivity, space for new brands and increasingly international outlook could see it become a star market in the year ahead.
Domestic consumption among Vietnam's growing middle class is set to double by 2020, potentially creating a massive surge in brand demand, writes Saby Mishra, CEO of JWT Vietnam in an exclusive article for Warc exploring marketing trends in the country for 2017. (For more, read Trend Watch 2017: E-commerce, spending takes off as Vietnam's economy grows.)
Vietnam's e-commerce sector is rapidly headed towards a tipping point, Mishra believes. The lower cost of 4G devices and service plans are going to make it easier for consumers to research, browse and buy via smartphones, creating a surge in growth as millions of young consumers go online for the first time. A lack of access to brick-and-mortar retail, particularly for rural consumers, is another growth factor.
Mishra notes that nearly 6% of urban households in Vietnam have trialed shopping online for FMCG at least once in the latest year, and that they tend to spend three to four times more than they would on an average shopping trip as they don't need to carry it all home on their motorbikes.
But despite the opportunities, brands should carefully consider how they approach expansion in the country, which has now has nearly 40m internet users.
"New brands need to tread carefully through muddy waters, and established brands need to constantly evaluate their leadership while continuously working to earn consumer trust and loyalty," Mishra says.
"It's important to approach Vietnam with a realist lens, " he adds. "Whilst opportunities are plentiful and enticing, progress in Vietnam happens incrementally rather than in leaps and bounds."
Data sourced from Warc