BuSINESS CIRCLE 13 March 18-24, 2019 l www.vir.com.
vn
Vietnam’s new brand building arena
By Hai Yen
40
years ago,
Vietnam was
one of the
poorest coun-
tries in the world – and it has
come a long way since then.
Now it is a “velocity” market:
one of the rapidly growing,
technologically-empowered
economies included in
Ogilvy’s V12 report.
Thanks to trade liberalisa-
tion and an investment in
human and physical capital,
there has never been a better
time to do business in Vietnam.
Vietnam is a highl-attractive
target for foreign investment
Vietnam has risen in the
World Economic Forum’s
Global Competitiveness Report
and the World Bank’s Ease of
Doing Business rankings.
The Vietnamese govern-
ment has also signed a number
of bilateral and regional free
trade agreements. This will
stand the country’s economy in
good stead, allowing it to tap
into global lucrative consumer
markets and bring in foreign
investment. Previously centred
around manufacturing, foreign
direct investment (FDI) is now
diversifying, most recently
favouring the real estate mar-
ket thanks to newly relaxed
property ownership laws.
Vietnam is a manufacturing
hub
Tariffs and rising labour
costs in China, driven by the
Made in China 2025 plan to
climb the manufacturing value
chain, have resulted in low-
cost manufacturers shifting
production to other countries
such as India and Vietnam. As
a result, Vietnam has become a
low-cost manufacturing hub,
with productivity increasing by
36 per cent between 2006 and
2017.
Since 2010, global elec-
tronics brands including Intel
and Samsung have invested
more than $18 billion in setting
up facilities and building part-
nerships in Vietnam. Vietnam
is also one of five nations re-
sponsible for 51 per cent of
global growth in textiles and
apparel exports, an area of con-
sistent future growth, accord-
ing to predictions by
McKinsey. These key manu-
facturing sectors look set to
continue attracting foreign in-
vestment.
Local entrepreneurs have a
global perspective
The phenomenon of the
returning diaspora has
In order to further support marketing communications activities, Ogilvy Vietnam has launched the Ogilvy Content
Studio in the format of an immersive and interactive exhibition full of creative content
brought a wealth of skills
back into Vietnam. Overseas
Vietnamese have a global
mindset and Western
education, combined with
local language. While per-
ceptions around them and
their stories are not always
positive, this fusion of East-
ern and Western thinking has
led to exciting new
contributions to the spheres
of food, art, music, and fash-
ion, helping connect Vietnam
to the rest of the world.
Automation and Artificial
Intelligence will drive
growth – but also bring
challenges
Increased mechanisation
has the potential to boost
productivity in Vietnam’s
manufacturing industry in
the short term, without nega-
tively affecting job growth.
There are also considerable
untapped opportunities in
agriculture (which accounts
for almost 20 per cent of
Vietnam’s GDP), especially
around precision farming,
automation, and data-pow-
ered solutions.
However, according to
the International Labour Or-
ganization, more than half of
all workers in Vietnam,
Cambodia, Indonesia, the
Philippines, and Thailand
will be at risk of displace-
ment during the more ad-
vanced stages of automation
over the next two decades. It
will be necessary for Viet-
nam to retrain and up-skill its
workforce.
The Vietnamese govern-
ment has already invested
heavily in human capital and
infrastructure ahead of this an-
ticipated industrial revolution,
with a focus on education and
enabling affordable, wide-
spread internet access to en-
sure that its rapidly growing
young population is equipped
for what is to come.
Digital readiness is a priority
for Vietnamese entrepre-
neurs
The private sector is grow-
ing Vietnam’s IT scene, and
Vietnamese telecom companies
are enthusiastically welcoming
international partners in order
to accelerate development.
Vietnam is currently a re-
gional leader in cybersecurity,
with a cybersecurity adoption
rate of 88 per cent, higher than
the ASEAN average. The gov-
ernment recently issued a new
digital privacy bill which will
make the region stronger, and
the Ministry of Information
and Communications is to im-
plement a framework to reduce
system vulnerability by 2020.
Perceptions around digital
readiness are largely positive
in Vietnam. According to
Cisco’s research, Vietnamese
businesses and IT leaders are
more confident in their digital
transformation strategies than
their counterparts in other
countries, and a large number
are considering upgrading their
infrastructures in order to
enhance their own cybersecu-
rity position.
This proactive approach to
digital transformation is pres-
ent both in multinationals and
smaller entities. Businesses in
Vietnam are keenly working to
leverage the cloud and au-
tomation.
There is a demand for big
retailers
A rising local demand
makes Vietnam a strong choice
for retail investment; interna-
tional retailers like Lotte and
AEON have dedicated consid-
erable resources towards im-
proving the “big retail”
concept, resulting in hyper-
markets which are perceived
as equal parts shopping and en-
tertainment, complete with a
strong range of promotions,
and imported products.
Shopping frequency and
Established in 1994, Ogilvy
Vietnam is now one of the
biggest emerging compa-
nies among the Southeast
Asian markets, with more
than 200 staff across the
two major cities of Hanoi
and Ho Chi Minh City.
Ogilvy Vietnam has a strong
record building big brands
by having best-in-class dis-
ciplines throughout all as-
pects of marketing
communications. From
March 15 to 22 in Ho Chi
Minh City and Danang, the
company will host Ogilvy
Week 2019, a first-of-its-
kind event in the marketing
communications industry. It
will include a series of in-
depth programmes, featur-
ing discussions around
digital transformation, keys
to the creative future, and
case studies from Ogilvy’s
exclusive Operating System
tool. It will also showcase
the best practices in PR and
influence from across the
markets that Ogilvy
operates in.
average spending are both on
the up, however, 53 per cent of
Vietnamese shoppers are still
waiting to be engaged, accord-
ing to Kantar’s research.
A lack of brand building in
Vietnam presents a huge
opportunity
Vietnam is one of the
world’s largest agricultural ex-
porters, and yet foreign con-
sumers are unlikely to know
that what they are buying orig-
inates from Vietnam, because
products are often exported
without branded packaging.
Small and medium-sized
enterprises in Vietnam need
much greater awareness of the
importance of a brand as an
intangible asset and a core
component in creating business
value. As Vietnam becomes
increasingly internationally
integrated, businesses will face
more competition than ever
before – and potential brand
disputes.
Local entrepreneurs, and
exporters especially, must
make brand-building a priority
from the very start. Practically
speaking, this begins with
registering trademarks both
domestically and internation-
ally; in developed nations,
trademark-intensive industries
contribute approximately 50
per cent to the GDP, while in
developing countries this is
closer to 25 per cent.
With automation and
transformation knocking on
Vietnam’s door and interna-
tional competition heating up
manufacturing and exports, it
is more important than ever to
make brands matter.n