FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

********************

MIDTERM ASSIGNMENT
MAJOR: INTERNATIONAL BUSINESS ADMINISTRATION

GLOBAL MARKETING: AMAZON’S MARKET

PENETRATION PLAN IN VIETNAM IN 2024

Subject : Global Marketing

Lecturer : Ms. Nguyen Thi Thu Thao
Class Code : ML61
Group : 09
Class K60CLC1

Ho Chi Minh City, December 3

 STUDENT’S FULL NAME STUDENT ID
Trần Thị Thảo Vy 2112253086
Nguyễn Võ Quỳnh Như 2112253059
Tôn Nữ Quỳnh Anh 2112253009
Trần Mai Chi 2112253604
Nguyễn Ngọc Mai Khanh 2112253035
 i

TABLE OF CONTENTS

TABLE OF CONTENTS ...................................................................................................... i

LIST OF TABLES ............................................................................................................. iii
LIST OF IMAGES ............................................................................................................. iii
LIST OF GRAPHS ............................................................................................................. iii
CHAPTER 1. ABSTRACT .................................................................................................. 1
CHAPTER 2. OVERVIEW.................................................................................................. 2
2.1 Global trend overview............................................................................................. 2
2.1.1 Background summary ...................................................................................... 2
2.1.2 Consumer trend ................................................................................................ 2
2.2 Amazon, Inc. ........................................................................................................... 5
2.2.1 Profile [7] ......................................................................................................... 5
2.2.2 Amazon.com .................................................................................................... 5
CHAPTER 3. MODELS FOR MARKET SELECTION ..................................................... 7
3.1 General market screening process .......................................................................... 7
3.2 Why Emerging markets .......................................................................................... 7
3.3 Why ASIA: Regional macro-screening .................................................................. 9
3.4 Why South East Asia ............................................................................................ 10
3.5 Why Vietnam and Malaysia.................................................................................. 10
3.5.1 Why Vietnam in Emerging markets ............................................................... 10
3.5.2 Why Vietnam and Malaysia ........................................................................... 11
3.5.3 MACS matrix ................................................................................................. 20
CHAPTER 4. ENTRY MODE ........................................................................................... 21
4.1 Why Joint-venture in Intermediate mode?\ .......................................................... 21
4.2 Collaborate with e-payment .................................................................................. 24
4.2.1 Amazon’s market penetration history ............................................................ 24
4.2.2 E-wallet in Vietnam ....................................................................................... 26
CHAPTER 5. MARKETING STRATEGIES .................................................................... 29
5.1 Segmentation ......................................................................................................... 29
5.1.1 Demographics ................................................................................................ 29
 ii

5.1.2 Behavioral segmentation ................................................................................ 29

5.1.3 Psychological segmentation ........................................................................... 29
5.2 Targeting ............................................................................................................... 29
5.2.1 Behaviors ........................................................................................................ 29
5.2.2 Attitudes ......................................................................................................... 30
5.2.3 Need ............................................................................................................... 30
5.3 Positioning ............................................................................................................ 30
CHAPTER 6. MARKETING TACTICS ........................................................................... 31
CHAPTER 7. CONCLUSION ........................................................................................... 33
REFERENCES ..................................................................................................................... a
OWEN CAMPAIGN ANALYSIS ..................................................................................... f
 iii

LIST OF TABLES
Table 1: Finances are global concern of consumers [2] ....................................................... 3
Table 2: Improved global perceptions of sustainable consumption [3] .............................. 3
Table 3: Market Attractiveness scoring criteria ................................................................. 11
Table 4: Market Attractiveness of Vietnam and Malaysia in Asia-Pacific region............ 11
Table 5: Competitive Strengths of Amazon in Vietnam with regards to its strongest
regional competitor, Shopee ............................................................................................... 14
Table 6: Competitive Strengths, scoring reasoning............................................................ 15
Table 7: Amazon SWOT analysis ...................................................................................... 21
Table 8 : Lessons from China’s failure .............................................................................. 25
Table 9: E-wallet choosing-criteria .................................................................................... 27
Table 10: Amazon x ZaloPay exclusive benefits ............................................................... 28
Table 11: 4Ps model of Amalo ........................................................................................... 31
Table 12: The extent to how much to standardize/localize ................................................ 33

LIST OF IMAGES
Image 1: Consumers are highly aware of the risks and potential consequences when
sharing personal information across digital channels [4] ..................................................... 4
Image 2: General market screening process ......................................................................... 7
Image 3: Amazon’s MACs matrix ..................................................................................... 20

LIST OF GRAPHS
Graph 1: Since October 2021 consumers have shifted priorities in response to emerging
disruptions [1] ....................................................................................................................... 2
Graph 2: Retail e-commerce sales worldwide from 2014 to 2026 [5] ................................. 4
Graph 3: Intense e-commerce industry rivalry [6] ............................................................... 5
Graph 4: Most popular online marketplaces worldwide in 2021, based on gross
merchandise value [8] ........................................................................................................... 6
Graph 5: Emerging market and developing economies: Gross domestic product (GDP) in
current prices from 2017 to 2027(in billion U.S. dollars) [12] ............................................ 8
Graph 6: Climate Awareness and Actions [13] .................................................................... 9
Graph 7: Regional e-commerce share of retail in 2020, with a forecast for 2025 [14]........ 9
Graph 8: E-commerce as a percentage of retail sales continues to grow across regions [15]
............................................................................................................................................ 10
Graph 9: Vietnam warming to e-wallets [50] ..................................................................... 26
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CHAPTER 1. ABSTRACT
The goal of this study is to (1) evaluate the potential impact of Amazon's market
entry on the Vietnamese e-commerce market; (2) suggest suitable market entry strategies.
To demonstrate Amazon's ability to enter new markets, apart from information on global
consumer trends and market landscape, the preliminary, fine-grained, and MACS model
will be used to identify the most suitable nation for Amazon to penetrate. Joint-venture will
be the most preferable market entry mode resulting from previous analysis. Key marketing
strategies (STP) and tactics (4Ps) utilized specifically in Vietnam will also be demonstrated.
In conclusion, the concern of the extent of product standardization or adaptation is included
in the last section.
Word count: 2089 words
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CHAPTER 2. OVERVIEW
2.1 Global trend overview
2.1.1 Background summary
Global crisis in economic and social aspects (e.g., increasing interest rates,
unpredictable inflation fluctuations, new variants of COVID-19, etc.)

2.1.2 Consumer trend

● Global consumers tend to pursue a cost-effective and sustainable lifestyle (2022
“Future Consumer Index” - Ernst & Young). This growing trend is in alignment with
Amazon’s core values of sustainability initiatives.

Graph 1: Since October 2021 consumers have shifted priorities in response to emerging
disruptions [1]
● 62% of global consumers expect their living costs to increase over the next six
months → Costs of living is a global worry.
 3

Table 1: Finances are global concern of consumers [2]

→ 1st Trend: Cutting costs - Consumers are substituting but not sacrificing, repairing but
not replacing.

● A growing trend in globally sustainable consumption, but price is a barrier.

Table 2: Improved global perceptions of sustainable consumption [3]

Firm’s impact on the social and environment critically influences customer intention
of purchase.

→ 2nd Trend: Sustainability - Consumers are holding on to their values.

● A small but rapidly growing group is interested in exploring emerging technology

and digital channels.
→ 3rd Trend: Extreme concern about personal data sharing, usage, and protection.
 4

Image 1: Consumers are highly aware of the risks and potential consequences when
sharing personal information across digital channels [4]

● Rising demand for e-commerce services: The sales volume keeps increasing
annually, especially in 2021, there is a total of 2.14 billion digital buyers globally,
making up for approximately 30% of the global population.

Graph 2: Retail e-commerce sales worldwide from 2014 to 2026 [5]

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Graph 3: Intense e-commerce industry rivalry [6]

→ E-commerce is an emerging but promising industry: Amazon needs to fully understand
the global trends in its quest to "conquer" new markets.

2.2 Amazon, Inc.

2.2.1 Profile [7]
- Industry: Retail & Wholesale- Discretionary.
- Sub-industry: E-Commerce Discretionary.
- Sector: Consumer Discretionary.
2.2.2 Amazon.com
- Business segment: International segment, retail sales of products through
internationally-focused websites.
- Sector: E-Commerce.
- Global position: Third leading global online marketplace.
 6

Graph 4: Most popular online marketplaces worldwide in 2021, based on gross

merchandise value [8]
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CHAPTER 3. MODELS FOR MARKET SELECTION

3.1 General market screening process

Image 2: General market screening process

3.2 Why Emerging markets
- The report made by Oxford Business Group has indicated that e-commerce has been
well-established in developed countries for years; meanwhile it may take Amazon
 8

such a huge effort to penetrate in frontier ones due to the fact that most of the citizens
there cannot get access to the Internet. [9]
- A 2016 report by Google and Temasek predicted a compound annual growth rate in
South-east Asia (SEA) e-commerce sales of 32% in the years to 2025, driven by the
region’s youthful population and its growing middle class. This would bring the
size of the market to $88bn in 2025.
→ Amazon can take advantage of this to increase revenue and market share
globally.

- In the emerging markets, e-commerce revolution, governments, homegrown

entrepreneurs, and international e-commerce giants all need to play their part. If done
right, online markets stand to create new jobs and benefit customers. By
unleashing innovation and strengthening market competition, e-commerce may be
just what is needed to unlock the emerging world’s next growth phase. [10]
- According to McKinsey Global Institute, emerging economies - 18 of 71 countries
outperformed their peers and global benchmarks - which have become an
established engine of global growth. [11]

Graph 5: Emerging market and developing economies: Gross domestic product (GDP) in
current prices from 2017 to 2027(in billion U.S. dollars) [12]
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Furthermore, GDP is an important indicator of a country's economic power, and

Graph 5 shows that emerging markets economic power will continue to grow substantially
until 2027 → Potential and sustainable markets to expand Amazon’s market penetration.

3.3 Why ASIA: Regional macro-screening

- Asia will experience “Green” consumer trends according to Euromonitor, which
is favorable for the sustainability mission, vision and commitments of Amazon.

Graph 6: Climate Awareness and Actions [13]

- Since Asia-e-commerce Pacific's proportion of retail in 2020 and with an estimate
for 2025 is the largest (51% and 61%, respectively), the region has significant
potential for the industry.

Graph 7: Regional e-commerce share of retail in 2020, with a forecast for 2025 [14]
 10

3.4 Why South East Asia

According to the Financial Times,

- SEA is already the world’s fastest-growing ecommerce market, and Vietnam is set
to lead that expansion by 2026.
- Specifically, by 2023, SEA is predicted to become the 4th largest combined GDP,
only behind China, EU, and the US.
- Asia, especially SEA, are reported to lead in worldwide online retail sales.

Graph 8: E-commerce as a percentage of retail sales continues to grow across regions

[15]
3.5 Why Vietnam and Malaysia
3.5.1 Why Vietnam in Emerging markets
3.5.1.1 Supported data from the Vietnamese government
According to Vietnamese National Institute for Finance [16], Vietnam could be
included in the MSCI’s watchlist for a market status upgrade from “frontier market” to
emerging status during the annual market review in May 2023.

→ Vietnam may be notified of its upgrade to emerging market status during the
MSCI annual market review in May 2024.

3.5.1.2 Supported data from market credit rating agencies

- Financial Times Stock Exchange (FTSE): Vietnam will remain on the Watch List
as a Frontier market and reviewed for possible reclassification as a Secondary
 11

Emerging market within the FTSE Equity Country Classification scheme at the
Interim Review in March 2023. [17]
- The World Bank: Vietnam now is one of the most dynamic emerging countries in
the East Asia region. [18]
3.5.2 Why Vietnam and Malaysia
3.5.2.1 Why Vietnam
3.5.2.1.1 Market attractiveness
→ Highest market potential
Table 3: Market Attractiveness scoring criteria

Score 1 3 5

Market size < 40 40 - 80 80 - 120

Market growth < 4% 5 - 9% > 9%

Prices < 7$ billion 7 - 14$ billion > 14$ billion

Population < 60 million 60 - 120 million > 120 million

GDP < 400 400 - 800 > 800

Table 4: Market Attractiveness of Vietnam and Malaysia in Asia-Pacific region

Criteria Asia-Pacific region

Weigh
(1 → 5
(in %) Vietnam Malaysia
pts)

- In the eCommerce market, - In the eCommerce market, the

the number of users is number of users is expected to
Market
25 expected to amount to 73.7m 0,75 amount to 20.4m users by 2027. 0,25
size
users by 2027. [19] [20]
→3 →1
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Criteria Asia-Pacific region

Weigh
(1 → 5
(in %) Vietnam Malaysia
pts)

- Revenue in the eCommerce

- Revenue in the eCommerce
market is projected to reach
market is projected to reach
US$12.81bn in 2022.
US$9.08bn in 2022.
- Revenue is expected to
- Revenue is expected to show an
Market show an annual growth rate
15 0,75 annual growth rate (CAGR 0,75
growth (CAGR 2022-2027) of
2022-2027) of 16.69%, resulting
16.25%, resulting in a
in a projected market volume of
projected market volume of
US$19.64bn by 2027. [22]
US$27.20bn by 2027. [21]
→5
→5

Prices 20 The value of Business-to- 1 The Malaysian e-commerce 0,6

Consumer (B2C)
commerce in Viet Nam is
expected to grow by over 20
percent to reach US$16.4
billion in 2022. [23]
→5
e- market is estimated to register a
growth of 19.9% to reach $9.2
billion in 2022. [24]
→3

Populati 20 The current population of 0,6 The current population of Malaysia 0,2
on Vietnam (or Viet Nam) is is 33,360,350 as of Sunday,
99,438,256 as of Sunday, November 27, 2022, based on
November 27, 2022, based Worldometer elaboration of the
on Worldometer elaboration latest United Nations data. [26]
of the latest United Nations →1
data. [25]
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Criteria Asia-Pacific region

Weigh
(1 → 5
(in %) Vietnam Malaysia
pts)

→3

Economi 20 Moving forward to 2024, the 0,6 The Malaysia GDP is projected to 0,6
c IMF forecasts that Vietnam’s trend around 440.00 USD Billion in
position GDP will rank fourth in the 2024. [28]
(GDP) ASEAN-6, hitting US$615.6 →3
billion, respectively. [27]
→3

Total 100 3.7 2.4

Reasoning for criteria

- Market size: refers to the total number of potential buyers for your product. In order
to be considered an attractive market, one country must have a large value of market
size. [29]
- Gross domestic product (GDP): is the value of the goods and services produced in
an economy. It’s generally a good sign for businesses when GDP is growing because
the standard of living of people in that country is raised and people are willing to
buy more. [30]
- However, If a country’s GDP isn’t growing as fast as its population, GDP per capita
isn’t rising. That means the standard of living for the people, and their purchasing
power, isn’t increasing. [31]
3.5.2.1.2 Competitive strength
The main reason why customers opt to use online shopping websites is because they
can nearly always locate the things they require to meet their demands on these websites.
97% of consumers have abandoned a purchase because the service wasn’t convenient
 14

enough. Therefore, convenience, meaning having a wide range of products, is an

important aspect that e-commerce companies need to concentrate more to increase sales.
[32]

Having a high-quality local business network is another vital factor for companies
in the e-commerce sector to ensure that they have a broad source of products to satisfy the
majority of their consumers' needs.

Customers are likely to return for repeat purchases online because of the
conveniences they get. These conveniences include free shipping, delivery, deals and
discounts, and flexible payment methods.

It’s been found that close to 68% of visitors tend to leave websites because they
aren’t happy with the customer service being offered. Therefore, ecommerce companies
should provide good customer service with a view to maintaining the customer’s retention
rate. [33]

User-friendly website interface is also a crucial competitive strength. Due to

numerous e-commerce businesses operating in the market nowadays, customers spend a lot
of time deciding which e-commerce platform to use. As a result, the market presence of a
business is a factor that customers take into consideration when making their decision.

Table 5: Competitive Strengths of Amazon in Vietnam with regards to its strongest

regional competitor, Shopee

Criteria Weigh Vietnam

(1 → 5 pts) (in %) Amazon Shopee

Products fit to
25 4 1.0 3 0.75
market demands

Quality of the local business

20 4 0.8 3 0.6
network
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Criteria Weigh Vietnam

(1 → 5 pts) (in %) Amazon Shopee

Prices & Promotions 15 3 0.45 4 0.6

Logistic & Shipping network 10 3 0.3 1 0.1

Payment methods 10 4 0.4 2 0.2

Customer service 5 2 0.1 3 0.15

Web presence 5 2 0.1 3 0.15

Marketing 5 2 0.1 4 0.2

Market presence 5 3 0.15 2 0.1

Total 100 3.4 2.85

Table 6: Competitive Strengths, scoring reasoning

Criteria Vietnam

(1 → 5 pts) Amazon Shopee

a) Shoppertainment
a) Personalization
- Consumers want to be entertained and
- The demand for more personalized
Products fit connected with one another.
products or services increased much on Gen
to - Shopee app contains entertainment
Z consumers.
market components like live streaming of events,
- Amazon has made some impressive strides
demands in-app gaming,....
in personalisation with the use of artificial
- Shopee’s mobile app recorded the
intelligence, machine learning, and
highest Monthly Active Users number in
 16

Criteria Vietnam

(1 → 5 pts) Amazon Shopee

predictive analytics. Vietnam for the first quarter, according to

b) Wide range of products an all-new ranking by iPrice Group and
- Amazon has a catalog of 12 million App Annie Intelligence. [33]
products across all categories and services. a) Wide range of products
(RepricerExpress, 2021). Shopee offers a wide range of products,
- Factoring in the Amazon Marketplace, including electronics, home goods, and
there are 353 million products available on fashion.
Amazon. (RepricerExpress, 2021) [32]

- In Singapore, Malaysia, and the

Philippines, Amazon offers lots of tools and
- The platform currently has over 160
services to help small businesses build their
million active listings with
Quality of brands domestically and internationally
approximately 6 million sellers,
the local online. [34]
including more than 7,000 brands and
business - With these tools to be applied in Vietnam,
leading distributors.
network Amazon can create a high-quality local
- The number of sellers on Shopee’s
business network.
website raises around 60% annually.
- Amazon with 6.3 million total sellers in
2021, according to Marketplace Pulse.

- Amazon’s generic corporate strategy is to - Shopee was able to draw customers in

offer the maximum value for its customers through a number of campaigns for year-
at the lowest price. round incentives including free shipping,
Prices &
- Amazon has a built-in algorithm that discounts, and flash sales.
Promotions
recognises any change in price and adjusts - Shopee’s financial reports in the first
product rankings quickly and effectively, so few years, 90% of marketing spendings is
their own competitors can’t keep up. used for these campaigns. [35]
 17

Criteria Vietnam

(1 → 5 pts) Amazon Shopee

- Amazon is known for cutting its prices on

a regular basis, especially around the festive
season.

- Amazon’s supply chain is one of the most

efficient among major companies - Shopee works with leading logistics
worldwide. companies to have an integrated
- Amazon mostly uses its own delivery application in the logistic system
vehicles for same-day or one-hour delivery application.
Logistic &
options as using third-party logistics to - Shopee Supported Logistics partners
Shipping
deliver these orders would just lengthen the include: Shopee Xpress, Speedpost
network
delivery time. Standard, Ninja Van, J&T Express,
- Amazon Prime Air can deliver products UrbanFox, uParcel
under five pounds in locations within 10 - The product delivery will be within 9-
miles of Amazon’s fulfillment centers 18 working days.
within just 30 minutes or less. [36]

- Amazon accepts a variety of payment - Shopee has collaborated with various

options, including credit and debit cards. payment service providers to process
Some available payment methods at the payment in a fast, convenient and
Amazon: Visa, Amazon Store Card, secure manner.
Payment
MasterCard/EuroCard, Discover Network, - Credit / Debit Card, Online Banking,
methods
American Express, JCB, NYCE, STAR, or Maybank2u, Cash on Delivery (COD),
gift cards. Cash Payment at Convenience Stores,
- Amazon’s own payment system: Amazon Installment Plan, SPayLater
Pay - Easy checkout for customers with - Shopee’s own payment system:
 18

Criteria Vietnam

(1 → 5 pts) Amazon Shopee

Amazon accounts. ShopeePay

- SHOPEE was recently revealed as

Malaysian consumer’s favorite brands
online in its October 2022 study titled
- The American Customer Satisfaction “Winning Malaysian Loyalty on E-
Index revealed in a survey that more than Commerce”. [39]
80,000 consumers had a satisfying - Shopee Mall Brand Membership
experience with Amazon in 2019. [37] Program is a customer management and
Customer - The fact that it is the largest online retailer retention tool that will enable brands on
service (the world’s largest retailer and the sixth- Shopee Mall to build deeper connections
largest company on the planet, Forbes’ with potential and existing customers,
Global 2000 list - [38]) in the world converting them into valuable lifetime
indicates that Amazon is at the top choice of customers.
an online shop. - In order to build brand loyalty and create
memorable experiences for users, Shopee
business model focuses a lot on hyper-
localization activities.

- According to Statista, in May 2022, - Shopee is consistent with its brand

Amazon.com had approximately 2.4 billion design and uses the same brand color
combined desktop and mobile visits. across devices and platforms.
- Some of the most significant features about - Some of the most significant features
Website
Amazon’s UI/ UX Design and about Shopee’s UI/ UX Design: provide
Development: Easy Navigation and a history list, user-customization, design
Searching Options, Similar items of a for smaller devices, back button,
Product and Recommended Products, User- explanatory elements,...
 19

Criteria Vietnam

(1 → 5 pts) Amazon Shopee

generated Reviews, Scan to find Products,

Smoothly Payment Gateways, Voice
Recognition Search Facility, Separate
Section for Groceries

Marketing - Amazon's success is largely attributed to its - Kick-off offline channels with celebrity
customer-centric philosophy and intense ambassadors
focus on efficiency. - Out-of-house initiatives: Shopee utilizes
the celebrity endorsement on the banner,
poster, billboard on buses, taxis, trains.
- Shopee 9.9 Super Shopping Day,
Shopee University Program,
International connection

Market - Amazon now operates across 5 continents - The Shopee platform is currently
presence with around 20 countries having dedicated available in 13 countries, i.e., Indonesia,
websites for shoppers and sellers. Although Taiwan, Vietnam, Thailand, Philippines,
they don’t have operations in every country, Malaysia, Singapore, Brazil, Mexico,
they still deliver to over 100 countries in the Colombia, Chile, Poland, and Spain.
rest of the world.
 20

3.5.3 MACS matrix

Amazon's market attractiveness/ competitive strength (MACS) matrix

Image 3: Amazon’s MACs matrix

→ The corresponding point falls into the B countries segment, within the region of
Dominate/divest joint venture

→ Joint venture, which belongs to Intermediate entry mode, is the most appropriate
business arrangement for Amazon to expand into the Vietnamese market.
 21

CHAPTER 4. ENTRY MODE

4.1 Why Joint-venture in Intermediate mode?\
The internal and external conditions of Amazon are the factors to be considered when
choosing the most suitable entry mode.

Table 7: Amazon SWOT analysis

STRENGTHS WEAKNESSES
INTERNAL
Firm size Amazon has not really understood the Asian
(1) One of the most recognizable brands in market nor built brand awareness.
the world, responsible for $502.191B
billion revenue for the twelve months
ending September 30, 2022 [40].
(2) Fourth tech company to reach a $1
trillion market cap, and is quickly on its
way to $2 trillion. This increasing resource
availability provides the basis for increased
international involvement of Amazon over
time.
→ Good brand prestige, brand resources &
capabilities to attract Vietnamese
companies in collaborating.

International experience Amazon and Amazon Pay have failed in

(1) In 2017, Amazon’s sales totalled nearly both India and China
$180bn, 40% of which was generated (1) The Chinese government wants its
outside its home country, the US [41]. business community to prosper.
(2) On the world scale, in 2022, Amazon (2): Amazon also made many mistakes in
now operates across 5 continents with terms of managerial decisions: It didn't
commit to the Chinese market; its
 22

around 20 countries having dedicated governance structure didn't grant autonomy

websites for shoppers and sellers. to its China unit; its local management team
(3) 150 fulfillment centers global. lacked a skillset to compete with Chinese
(4) Deliver to over 100 countries in the rest entrepreneurs, and stuck with the same
of the world. [42]. operational model that didn't fit China [43].
→ Good at cultural immersion with a high
ability to integrate and adapt when entering
new markets; Easily build trust with joint-
venture partners

EXTERNAL OPPORTUNITIES THREATS

Joint venture supports Amazon in accessing Sociocultural distance between home

and distributing networks in new markets - country and host country:
Vietnam Since the geographical distance of America
(the host market) to Vietnam (the penetrated
market) is high with more than 8000 miles,
Amazon may favor entry modes that involve
relatively low resource commitments and
high flexibility (Guidice et al.,2017,
Hollensen, Sven).

Establishing a joint venture with a E-commerce rivalry in Vietnam is

prestigious technology company helps becoming more fierce: Fast delivery; cheap
Amazon access greater technological and product prices; and lots of players
financial resources, and Vietnamese Huge number e-commerce marketplaces in
databases to serve for further market Vietnam underwent a reduction in the figure
penetration plans in SEA. of sellers compared to the same period last
year [44]
 23

Research on US deals found that joint South-east Asians' payment behavior is

ventures yield a 17% return on investment, different from other countries Amazon has
compared with an industry average of 11%. entered.
Meanwhile, in Bain’s global survey of 253
companies that used joint ventures to spur
growth or optimize their product mix, more
than 80% of the deals met or exceeded
expectations [45].
→ High potential for the joint venture entry
mode.

The product conflict between Amazon Pay -

a product of Amazon with ZaloPay since
they are in the same fields of digital
payment.

→ Joint venture in Intermediate mode

provides flexibility since there is no full
ownership by the parent firm involved for
this mode.

Therefore, joint ventures in intermediate mode provide a well-based foundation for

Amazon to join the Vietnamese market. In general:

- Can compensate for the inexperience in understanding the e-commerce market in

Vietnam.
 24

- Allow the partners to share the responsibility of management to lower operation and
administrative costs → Vietnamese partners can increase the speed of Amazon’s
market entry
- Global operations in R&D and production are prohibitively expensive but are
necessary for Amazon to achieve a competitive advantage.
4.2 Collaborate with e-payment
The next-step strategy that we suggest is to collaborate with a Vietnamese e-wallet - and
that is ZaloPay
4.2.1 Amazon’s market penetration history
4.2.1.1 Entry mode method
Amazon used a simple strategy to enter new markets: Enter countries that are
growing quickly in terms of e-commerce adoption as a percentage of total retail. Typically,
Amazon starts by negotiating with local book publishers. Then, once the parties reach an
agreement, Amazon starts selling Kindles and ebooks as a way to get its foot in the door.

Take Amazon’s case in China as an example. Amazon entered the Chinese market
in 2004 by acquiring Joyo.com, a popular online seller of books for $75m – during the next
decade it became Amazon China.

→ Market entry mode: Foreign direct investment ̣in Hierarchical mode

4.2.1.2 Result
Despite its early entry into the market, Amazon increasingly encountered difficulties
competing with the domestic giants gaining more and more traction and failed to effectively
engage consumers on its platform. When Amazon exited the market it was left with a
market share of 0.6%; whereas Alibaba’s Tmall occupied 61.5% and JD.com 24.2% in
2018’s final quarter.

→ Missing the importance of localization of its operations, ranging from its products
to delivery speed and customer interaction left Amazon no other choice than to abandon its
Chinese e-commerce ambitions.
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4.2.1.3 Reasons of failure & Lessons learned

Table 8 : Lessons from China’s failure

Reasons for failure in China market Adaptation to Vietnam market

The collaboration with a business with a

Lack of trust in local management home base in Vietnam will help Amazon
gain trust from local customers

Joint venture with local company helps

Amazon avoid Vietnamese strict laws for
Dominant competitors and a strict
companies with 100% foreign investment
regulatory environment
→ Ease the intensiveness of Vietnamese
regulatory environment

Amazon’s regional managers were always

ZaloPay provides an insights of
non-Chinese and had never lived in China
Vietnamese consumers for Amazon to have
before, putting them at a massive
a well-rounded comprehension of their
disadvantage over aggressive, local players
consumer’s demands
who are well-capitalized

The billions of dollars Amazon spent to Amazon can take advantage of VNG, the
open 15 fulfillment centers, controlling owner of ZaloPay with great infrastructure
much of its own inventory, and building its (VNG Campus has a total construction and
own infrastructure without creating use area of 52,440m2, applying the world's
revenue modern campus model.)

ZaloPay is the e-wallet partner of many

The Chinese consumer has grown
popular fast delivery brands in Vietnam
accustomed to fast same-day deliveries,
(AhaMove, Giaohangnhanh, GrabExpress,
 26

while Amazon was still lagging behind beDelivery)

with long 2-day-deliveries

4.2.2 E-wallet in Vietnam

4.2.2.1 Market overview
- By 2026, there will be an estimated 426 million users of mobile wallets in SEA,
representing 62% of the total population, with 227 million new users added from
2021 to 2026.
- With a compound growth rate of up to 32% annually in the period 2020-2027, the
mobile payment market in Vietnam could reach $2,732 billion by 2027 [49]

Graph 9: Vietnam warming to e-wallets [50]

4.2.2.2 Benefits Amazon can have joined with E-wallet app

- Online banking payments can help merchants reduce costs
- The pursuit of digital financial inclusion itself is already addressing sustainability
as it uses more technology and digital-first service and encourages paperless
transactions.
- Maximize the platform and technology advantages of both sides.
- Improve the shopping experience for users on the digital platform, thereby
increasing the rate of users returning and becoming loyal customers.
 27

- Reducing the percentage of cash-on-delivery orders can help e-commerce sites

reduce selling costs.
Draw Customer Persona with "lines" such as their assets, income level, or what they
use the money for. From here, e-commerce services can add features that best suit each
user group and create added value from there. User data is the ultimate goal of e-
commerce platforms when they have e-wallets

4.2.2.3 Criteria to choose ZaloPay over Amazon

Table 9: E-wallet choosing-criteria

Achieve joint-venture objectives

Suitable e-wallet for Amazon

Criteria ZaloPay Momo

Number of partners x

Gamification x

Owns an existing user

x
community

Online payment method right

x
on chat interface

Diverse ecosystem x

Brand salience x x

User database x
 28

⇒ ZaloPay

4.2.2.4 ZaloPay is the most suitable partner

Table 10: Amazon x ZaloPay exclusive benefits

Amazon x ZaloPay

Amazon ZaloPay

The infrastructure of Amazon Web ZaloPay makes significant infrastructural

Service is excellent and technological investments

When Amazon begins utilizing VNG's

infrastructure, ZaloPay (VNG) enables Amazon uses ZaloPay's ability to obtain
them to spend less on infrastructure algorithmic data and market expertise
R&D.

Infrastructure effectiveness: As a partner Operational effectiveness: ZaloPay's and

with Amazon, ZaloPay will integrate Amazon's algorithms will be used and
with AWS and no need for paying to benefited from. Over the next three years,
upgrade Amazon's infrastructure. The Amazon's only expense in the algorithms
residual cost resulting from fully section is integration fees.
integrating the two systems and switching Research effectiveness: VNG is currently
ownership of the technical know-how is a performing excellent market research and
tiny portion of the infrastructure costs business coaching that Amazon might use
 29

CHAPTER 5. MARKETING STRATEGIES

5.1 Segmentation
5.1.1 Demographics
- Geography: Ha Noi, Ho Chi Minh city
- Age: 18 - 40 years old.
- Occupation: University students; Have a part/full-time job.
- Income: 1,000,000 or more.
5.1.2 Behavioral segmentation
- Characteristics: Flexible spending, love of high quality products.
- Benefit sought: Buy various products from one platform due to cost-effectiveness
and time-saving aspects.
- User status: Regular user - First-time user - Potential user.
Research carefully on products, spend much time considering promotions and
discounts before purchasing
5.1.3 Psychological segmentation
- Strong personality, independent.
- Not loyal to any specific brand.
- Fear of missing out (FOMO), easily influenced by peers.
- High price sensitivity.

5.2 Targeting
Young adults (18 - 40 years old) in Ha Noi and Ho Chi Minh city who are university
students or have a part/full-time job.

5.2.1 Behaviors
- Work hard, only spend money on necessities.
- Usually buy necessities from e-tailer due to reasonable pricing.
- Spend much effort and time to seek promotional deals.
- Easily influenced by previous reviews of other people, KOLs.
- Use e-wallet for expenditure records and money-saving.
 30

5.2.2 Attitudes
- The more money saved, the better.
- Reduce the more waste on the environment the better.
5.2.3 Need
- Safety needs are important, especially to those living far from their hometown.

5.3 Positioning
Amalo is a personalized e-commerce platform that can recommend cost-effective
shopping plans.
 31

CHAPTER 6. MARKETING TACTICS

4Ps for Amalo - Amazon x ZaloPay

Table 11: 4Ps model of Amalo

PRODUCT PROMOTION

- Large & diversifying product lines: - Advertising: Earn revenues by

Ranging from popular to sought- displaying advertisements and
after products corresponding links to products sold
- Authentic goods on the Amazon.com
- Easy to follow purchasing - Sales promotions: Host monthly
procedure mega sales
- Vietnameseized application to fit - Public relations: Strengthen its
with Vietnamese consumers’ brand image through public
characteristics relations programs
- Integrating additional technology in - Direct marketing: Publish and
the purchasing process digital content distribution
- Convenient and fast delivery service
by collaborating with Vietnamese
delivery platforms
- Recyclable package
 32

PLACE PRICE

- Showroom: Operate a physical store - Multi-level pricing strategy

inside the offices of VNG in
→ When compared to products at the same
Vietnam to reach out to customers
price, its product quality outperforms them
who want to physically evaluate
in terms of prestige.
products before purchase
- Online channel: Web & mobile apps - Conduct market research on price
- Home shopping: TV & mobile sensitivity
- Adjusting prices based on national
market conditions, perceived value
of products, and consumer
preferences and expectations
- Market penetration pricing strategy
 33

CHAPTER 7. CONCLUSION
Table 12: The extent to how much to standardize/localize

GLOBALIZATION / STANDARDIZATION LOCALIZATION / ADAPTATION

- Launching standardized products on a - Payment methods: Amazon localized its

worldwide basis: launched its international fulfillment platform in Vietnam by
shopping ‘wing’. With the help of this wing, introducing AMALO (collaborate with
Amazon customers from anywhere in the world ZaloPay) which can adapt to digital payment
will now be able to get more than 45 million trends in Vietnam and bring exclusive
products shipped to their homes directly from the benefits.
USA.
- Localized versions of Amazon Vietnam
- Standardized worldwide technology and (AMALO) website, app custom domain
R&D: name for Vietnam (www.amazon.vi): in
terms of look and feel, and also in terms of
+ International shopping feature is available to
the UI language
Amazon users on both their browsers and on the
apps (Android and iOS) - Shipment and Delivery Solutions for
Vietnam: Amazon also has contracts with
+ Currently available in many languages and
major delivery services including Viettel
currencies
Post, Giaohangtietkiem, etc. It even utilizes
+ Managing the courier service and customs vans and motorbikes for last-mile delivery.
clearance, to avoid any surprises during purchase
- Technology and R&D: One more problem
or delivery.
in Vietnam is fake product reviews,
fraudulent transactions, and fake products.
Amazon has designed algorithms to tackle
this problem.
 a

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3. Global retail e-Commerce market share. (2021, November 1). Statista.
4. Bloomberg. (n.d.). Bloomberg - Amazon.com Inc.
5. Leading global online marketplaces by GMV 2021. (2022, February 25). Statista.
6. E-Commerce to expand in the world's emerging markets. (2020, November 1). Oxford
Business Group.
7. Ungerer, C. (2022, March 9). The emerging markets e-Commerce opportunity.
Brookings.
8. High-growth emerging economies and the companies that propel them. (2018, September
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9. Emerging market and developing economies - gross domestic product (GDP) 2017-2027
| Statista. (2022, April 19). Statista.
10. (n.d.). Insights - Euromonitor.com.
 d

11. E-Commerce share of retail by region 2020-2025. (2020, November 3). Statista.
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Investing, Trading & Retirement.
13. (n.d.). Insights - Euromonitor.com.
14. E-Commerce share of retail by region 2020-2025. (2020, November 3). Statista.
15. Here’s why e-Commerce growth can stay stronger for longer. (n.d.). E*TRADE |
Investing, Trading & Retirement.
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FUCM231431
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19. Ecommerce - Vietnam | Statista market forecast. (n.d.). Statista.
20. Ecommerce - Malaysia | Statista market forecast. (n.d.). Statista.
21. Ecommerce - Vietnam | Statista market forecast. (n.d.). Statista.
22. Ecommerce - Malaysia | Statista market forecast. (n.d.). Statista.
23. Thời báo Tài chính Việt Nam. (2022, September 14). Viet Nam’s e-Commerce trade to
hit US$16.4 billion in 2022.
24. Malaysia e-Commerce market to grow by 19.9% in 2022, estimates GlobalData. (2022,
October 26). GlobalData.
25. Vietnam population (2022). (n.d.). Worldometer - real time world statistics.
26. Malaysia population (2022). (n.d.). Worldometer - real time world statistics.
27. VietNamNet News. (n.d.). Vietnamese GDP set to rank third in ASEAN by 2027.
28. Malaysia GDP - 2022 data - 2023 forecast - 1960-2021 historical - Chart - News. (n.d.).
TRADING ECONOMICS | 20 million INDICATORS FROM 196 COUNTRIES.
29. FutureLearn. (2013, August 8). Characteristics of an attractive market.
30. 3 things to consider when expanding a business internationally. (2019, July 30).
Business Insights Blog.
31. 3 things to consider when expanding a business internationally. (2019, July 30).
Business Insights Blog.
32. 74 Amazon statistics you must know: 2021/2022 market share analysis & data. (2022,
January 14). Financesonline.com.
 e

33. VietNamNet News. (n.d.). Shopee leads in active users in Q1.

34. Amazon introduces new resources for local businesses to expand in Singapore and
globally. (n.d.). vietnamnews.vn.
35. Boxme Global. (2019, 16). Shopee business model trumped Lazada in SEA market.
36. How Amazon is changing supply chain management. (2017, December 1). LiveAbout.
37. How good is Amazon’s customer service? (Full review). (n.d.). CSM – Customer
Service Manager Magazine.
38. Amazon introduces new resources for local businesses to expand in Singapore and
globally, n.d.
39.https://themalaysianreserve.com/2022/10/18/shopee-winning-customer-loyalty-on-e-
commerce/
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2020%20to%20March%202021.
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Validation & Location Intelligence | Geocode | Loqate.
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operate/#:~:text=Then%20on%20the%20world%20scale,websites%20for%20shoppers%
20and%20sellers.
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45. (n.d.). Global management consulting firm | Bain & Company.
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Sales Consultant: Content & Brand Management.
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Morgan | Official Website.
 f

OWEN CAMPAIGN ANALYSIS

1. Promotion
- TVC: Launched in November 2018, TVC has the appearance of 3 campaign
ambassadors with the brand message "Elegant fashion - Steady Bravery". The video
is produced into a 3-minute version to be broadcast online, serving digital
advertising, a 30-second version to advertise on VTV at the program "CEO - Key to
success" and LCD screens at the airport, contributing to helping the brand. quickly
reach the target group of customers.
- Viral Clip: To clarify the story in TVC, OWEN made a viral clip with the same
concept and told the successful story of each ambassador (Trọng Hiếu, Shark Dzung,
Hoàng Lê Giang), attracting discussion from users.
- Website: Host a competition to influence Vietnamese youth to write their own
stories of conquering challenges and achieving dreams.
- PR: In order to reach more young people, the campaign continues to spread the story
as well as the contest information on newspapers that many young people follow
such as VnExpress, Dân Trí, Cafebiz,...
2. Place
- Owen has massively distributed its products across many channels such as offline
flagship stores in northern regions such as Ha Noi, Quang Ninh, Vinh Phuc,..
- Furthermore, it also sells products on online channels such as Owen website,
Lazada Owen Flagship, Lazada Owen Outlet and Shopee.
3. Product
- Past: Since 2008, when entering the fashion market for men, OWEN has built a
luxurious and elegant image like successful gentlemen. However, it is the same
image of serious shirts and pants that makes the brand feel "old", customers who
prefer OWEN are mainly successful gentlemen aged 30 and over; Present: To
change the brand's perspective to better suit new trends as well as to bring about a
high-class experience, sublimate emotions for younger, more modern, more brave
men who like to build a masculine image
 g

⇒ The collection “My Way” depicts the dynamic, optimistic, colorful world of
young men with dreams and aspirations to rise up in life.

- Mainly focus on middle-aged customers although there are many designs for the
younger generation
- Design: elegant, youthful but dynamic
- Features: tight style, flattering figure, bright color, wrinkle-free material, durable
- Diversified product portfolio: office fashion, streetwear to accessories
- Brand image is not synchronized: product, design,...
4. Price.
- Owen belongs to the mid-range segment:
+ Austria: 360,000 VND - 598,000 VND
+ Pants: 450,000 VND - 595,000 VND