2

3
 Table of contents

I. EXECUTIVE SUMMARY...........................................................................................................................
II. UPDATED SUMMARISED MARKET PROFILE..................................................................................
A. Indian size:...............................................................................................................................................
B. Key economic indicators:.........................................................................................................................
C. Infrastructure:...........................................................................................................................................
D. Key political and legal factors..................................................................................................................
E. Country outlook for trade.........................................................................................................................
III. UPDATED MARKET ENTRY EXPERIENCE.....................................................................................
IV. MARKETING & COMPETITORS ANALYSIS....................................................................................
A. Actual product/service.............................................................................................................................
B. Identify typical previous targeted market segments and channels of distribution...................................
C. Targeted Consumer Analysis for India:...................................................................................................
V. ENTRY SELECTION FOR NOMINATED MARKET...........................................................................
A. Choose one entry method and provide the justification for the choice....................................................
B. Additional considerations affecting market entry....................................................................................
a. Channels of distribution...........................................................................................................
VI. LEGAL CONSIDERATIONS...................................................................................................................
A. Trade policy.............................................................................................................................................
B. Registration of a company........................................................................................................................
C. Ownership................................................................................................................................................
D. Governmental policy on foreign investment............................................................................................
E. Intellectual property protection................................................................................................................
VII. Risk Analysis.............................................................................................................................................
VIII. Financial support.....................................................................................................................................
IX. Financial Analysis......................................................................................................................................
X. Management Team and Structure..............................................................................................................
XI. Control Strategies.......................................................................................................................................
XII. Sustainability.............................................................................................................................................
XIII. Timetable for Implementation...............................................................................................................
XIV. Conclusions...............................................................................................................................................
Appendix A:..................................................................................................................................................
Appendix B: The process of setting up a Joint Venture in India..................................................................
Appendix C: India’s International Property Rights Index Overall Score in 2023........................................
Appendix D: India’s Transportation.............................................................................................................
1. Pattern of India’s Transportation........................................................................................................
2. Channel of distribution........................................................................................................................
Appendix E: previous entry experiences......................................................................................................
Appendix G: Financial analysis....................................................................................................................

4
 I. EXECUTIVE SUMMARY

Vinamilk’s international business has been embracing the idea of ongoing expansion
to new markets and development of existing ones (Vinamilk, 2023). With such
determination shown through global acknowledgment that the brand achieved, this project
aims at providing a subsidiary expansion into India to further improve Vinamilk’s stand
internationally. The scope of this report covers relevant and in depth analysis about India's
macro and micro environment, the dairy industry and legal considerations to identify
opportunities given by the nation. Moreover, specific projection on financial, managerial
and operational aspects would be included to prove the feasibility of Vinamilk entering
India through joint-venture with a local partner.

II. UPDATED SUMMARISED MARKET PROFILE

A. Indian size:

5
B. Key economic indicators:

6
7
C. Infrastructure:

8
9
D. Key political and legal factors

E. Country outlook for trade

10
III. UPDATED MARKET ENTRY EXPERIENCE

By embracing Vinamilk’s approach of ongoing searching for new opportunities, the

brand is now present in 57 countries and has maintained decent growth throughout the years
(Vinamilk, 2023). For the period post-pandemic, Vinamilk’s exporting activity has been
recorded with consistent growth and only showed sight of fluctuation in 2022 as global
policies have been adjusted by the consequences of COVID-19 (Vinamilk, 2023).
Additionally, international subsidiaries, with huge investments from Vinamilk, have
performed decently post-pandemic despite difficulties in solving distribution and
employment challenges (Appendix E). Outstanding subsidiaries like Driftwood and
Angkormilk can maintain positive growth mainly due to the effective solutions for
distribution networks and deep understanding of their customer segments, leading to the
flexibility to deal with macroeconomic problems.
International business performance:

11
IV. MARKETING & COMPETITORS ANALYSIS
A. Actual product/service
Vinamilk is a leading company in manufacturing and supplying a wide range of
dairy products suitable for individuals of all ages, from infants to old age. This wide range
selection includes fresh milk; yogurt; condensed milk; products for pregnant, and infants;
baby food; nutrition products for adults; yogurt drinks & juicy milk drinks; spoon yogurt;
plant-based milk; and beverages. Detailed information about Vinamilk’s products and
functionalities are shown in the table below:

12
 B. Identify typical previous targeted market segments and channels of distribution
B.1 Previously targeted market segments
Vinamilk focused mainly on the customer segment in the age group of under 15
years old because this demographic constitutes a significant majority and represents the
highest consumption of milk, accounting for 23.2% of the population (Duong, 2021). In
addition, Vinamilk also focuses on customers choosing health-conscious products because
there is a current trend in which many individuals favor nutritious products, particularly
after COVID-19, there has been a significant increase in the number of people interested in
using healthy products (Anh, 2020). Moreover, Vinamilk delivers high quality products with
suitable prices so Vinamilk has become a reputable brand for numerous people in high-
income, middle-income, and even those with lower incomes able to provide highly
nutritious dairy products for themselves and their families.
B.2 Channels of distribution

13
 In the domestic market, VNM uses 3 main distribution channels to distribute
nationwide. The first method is through modern channels using modern channels, followed
by traditional channels that account for over 80% of the distribution market share and rely
mainly on wholesalers. Finally, the key accounts channel is through placing vending
machines in crowded places. (Vo, 2023a).
In the international market, Vinamilk has exported to 58 countries and mostly
distributed to foreign partners (B2B) to help them reach end customers. Detailed
information of these channels illustrates in Appendix A.

C. Targeted Consumer Analysis for India:

1. Broad market size (total country size)
India's total population is more than 1.4 billion people, the second largest in the
world (Worldometers, 2023). Children aged 0 - 14 years account for almost one-third of
India's population. Besides having one of the world's largest populations, the country also
has a milk consumption level that is much higher than the world average (322 grams/day) in
2020-21 (Press Information Bureau, 2022). In addition, the trend of consuming organic and
preservative-free milk is increasingly popular in big cities. This market is valued at INR
7,906.9 million by 2022 and is expected to register a CAGR of 28.8% during 2023-2028
(Imarc, n.d.). This shows extraordinary potential for the Indian dairy market, where
Vinamilk can bring nutritious products to children and provide organic dairy products that
have been ultimately launched in the Vietnamese and global markets to meet emerging
trends in India.

14
 2. Initial market segmentation
India used the highest amount of cow milk globally in 2023, with around
95,901,084.1 short tons consumed (Shahbandeh, 2023). Dairy is also the leading agricultural
product, accounting for 5% of India's GDP and growing at a 6.4% compound annual growth
rate over the last five years (Invest India, n.d.). Increased demand because of the increasing
numbers of people and their growing earnings is one of the key drivers pushing the Indian
dairy business. With the continued growth of Indian society, the need for dairy goods is
expanding, offering the market a sizable customer foundation. With dairy goods as an
ancient component in Indian nutrition, higher income has helped more Indian people
purchase healthful food supplies than before. Demographic growth and increased consumer
spending have forced dairy businesses to step up production and be creative, assuring

15
consistent industry expansion. Vinamilk can use demographic segmentation and
psychographic segmentation in the Indian market (Appendix F).

3. Initial targeting and positioning

Vinamilk ought to concentrate on many essential areas regarding targeting and
positioning in the Indian market.
To begin with, Vinamilk can concentrate on the Indian's merchandising and
institutionalized markets. Individual customers, families, and small merchants comprise the
merchandising section, while hotels, eateries, and coffee shops comprise the
institutionalized section.
Moreover, Vinamilk should provide India with a comprehensive selection of dairy
items. By delivering high-grade and healthy milk-related goods, the corporation should seek
to appeal to the interests and wants of Indian buyers.
Additionally, in India, an ambitious costing structure should be pursued by
Vinamilk. The organization can strive to provide reasonably priced items to various
customer ranges. This pricing approach will attract customers sensitive to price and win
segments in the market.

4. Competitor analysis

16
 The dairy market in India is enormous, with many competitors, mainly dominant
players. It is infrequent for foreign companies to truly excel here. Among them, two major
potential domestic competitors in India, Amul and Mother Dairy, provide products at much
lower prices than Vietnam due to the difference in per capita income in India. Indeed,
according to the report recorded in 2020, Vietnam's GDP per capita 2020 was recorded at
2,785 USD, while India stopped at 1,927 USD (Huong, 2022). Therefore, to penetrate this
market, Vinamilk needs to have a strategy on price and distribution system as well as
promotion.

5. Specific product/service strategy issues

17
 Vinamilk, being a dairy firm, must guarantee that its items meet the strictest security
and standard requirements. Vinamilk should apply stringent quality assurance methods in
the manufacturing procedures, from raw material procurement to packages and shipments.
Secondly, Vinamilk must attentively plan prices for its goods to maintain market
competitiveness while maintaining profits. The company can examine manufacturing
expenses, consumer needs, and rivals' price points.
Lastly, Vinamilk must fund R&D to consistently develop and offer fresh goods
suitable for transforming customer tastes and market movements (Weelo, 2023). Vinamilk
can produce more nutritious and efficient items for the Indian market.

6. Discussion on the relevant expression of product or service into service for the
nominated market
The expansion of Vinamilk's dairy products into the Indian market is a strategic
move that requires a deep understanding of the preferences, cultural nuances, and market
dynamics of Indian consumers. This country has a unique culture, religion, and eating
habits. Therefore, Vinamilk should ensure its products are consistent with these cultural
aspects. The company will first establish a joint venture with Akshayakalpa in India. Next,
nutritional products, organic products, and powdered milk for young children will be
introduced to the market here. Indian consumers are increasingly health conscious.
Highlighting the health benefits, nutritional value, and quality standards of Vinamilk's dairy
products can help win consumer trust. In addition, pricing strategy also needs to be
considered. This is because India is a price-sensitive market. It is crucial to set competitive
prices while maintaining quality standards. This may involve cost-effective production
strategy planning and supply chain management.

7. E-marketing strategies:
a. Presence, customer interface

E-marketing is thriving in India, thanks to a fast-rising Internet and smartphone

audience. Organizations are utilizing digital marketing tactics to attain focus groups and
interact with buyers.

E-marketing is quickly growing as the go-to marketing platform for companies, from
massive multinationals to SMEs. Companies now use different online methods to connect

18
with their target consumers, including web pages, online platforms, and electronic mail
advertising (Basuroy, 2023). Vinamilk can also focus on developing smartphone-optimized
sites to serve a great deal of Indian mobile users.

Additionally, companies are working on providing content and interconnection in

regional dialects to appeal to a bigger market in India, which has a varied community that
speaks numerous languages (Kapoor, 2023).

b. E-commerce capability

India's e-commerce business is rapidly expanding. It has around 900 million online
enthusiasts, which makes it the world's second-biggest online industry (Basuroy, 2023). It
also has rising smartphone usage, with 1 billion smartphones predicted by 2026 (Deloitte,
2022). Furthermore, to captivate investors and develop the business, the Indian government
has reduced FDI regulations in e-commerce. India also has a robust e-commerce
environment, with big companies such as Amazon, Flipkart, and Myntra topping the
marketplace (Goel, 2023). These things make India an extremely potential market for
Vinamilk to invest in.

c. Customer relationship management

In the age of technological development, catching up and developing online sales

networks is transparent and necessary. Vinamilk may want to establish its distribution
network through sales using popular social networking sites in India, such as Facebook and
Instagram (Basuroy, 2023). Additionally, promoting products on delivery apps is already a
popular method worldwide; therefore, Vinamilk can apply a similar approach in the Indian
market. Most importantly, Vinamilk should open an official sales website in this country to
strengthen customers' trust in the brand's reputation.

d. B2B information management

By forming a joint venture with Akshayakalpa, a local dairy brand in India,

Vinamilk could leverage the partner's current distribution system and market experience to
accelerate market penetration. Vinamilk should adopt an enterprise resource planning (ERP)
system to manage production processes and inventory distribution, particularly if the system
also supports the management of external stakeholders (Hasan, 2018). This will increase

19
management efficiency by encouraging internal operations while also building strong
partnerships with local suppliers. Furthermore, popularizing items on B2B e-commerce
platforms such as Amazon India, Flipkart, or BigBasket is an excellent way for Vinamilk to
reach a large audience and satisfy rising online purchasing trends.

e. Collaborative and mobile E-marketing approaches (social media mkt, mobile apps,
mkt, and M-commerce)

With India's intensely competitive dairy industry, developing a complex e-marketing

plan that combines social media marketing is equally essential. As of early 2022, India had
658.0 million Internet users, 467.0 million of whom used social networks, accounting for
33.4% of the entire population (Kemp,2022). This demonstrates the enormous potential for
brand awareness on platforms such as Facebook, Instagram, and Twitter. Furthermore,
mobile phone users are predicted to exceed one billion in 2023 and reach 1.55 billion in
2040 (Statista,2022). Vinamilk may thus implement an application that delivers product
information, customer loyalty programs, and unique incentives to improve client
connection.

V. ENTRY SELECTION FOR NOMINATED MARKET

A. Choose one entry method and provide the justification for the choice
With a solid market footing, Vinamilk is recommended to enter into a strategic joint
venture with Akshayakalpa, an established Indian organic dairy producer well-known for its
certified organic milk and milk products. This joint venture would allow Vinamilk to further
strengthen its position in the Vietnamese dairy industry and on the international scene. With
its amazing 13 years of expertise and accreditation from APEDA (Agricultural and
Processed Food Product Export Development Authority) and Jaivik Bharat, Akshayakalpa is
a great partner for any project. In addition to saving money and time, it may make use of the
expertise of nearby businesses and specialists. Vinamilk can lower the manufacturing cost
per unit—which is cheaper than they would separately—by utilizing the resources and
reputation of Akshayakalpa in the present fiercely competitive Indian market. Through a
joint venture, the business might save extra money by splitting labor or advertising
expenses. Vinamilk addresses branding challenges and expands its market while providing
premium, reasonably priced organic dairy products. This collaboration is in line with

20
Vinamilk's growth plan and dedication to satisfying changing customer needs for organic
and natural dairy products.

B. Additional considerations affecting market entry

1. Financial Attractiveness and Incentives
a. Tax
India offers enticing tax incentives like tax holidays in special economic zones, R&D
credits, and reduced corporate tax rates to attract companies. Export-oriented businesses
enjoy exemptions from certain taxes, while the Startup India initiative provides tax breaks
and simplified compliance for entrepreneurs (India Briefing, n.d.). Understanding the Goods
and Services Tax (GST) system is crucial for effective management of indirect taxes. Some
industries qualify for investment-related deductions. Vinamilk should consult tax
professionals to ensure compliance with the latest regulations and maximize these benefits
(GST on milk, paneer, and curd, cleartax., n.d.).
b. Labor
The dairy industry in India, which employs 8.47 million people and has a 7.1%
yearly growth rate, is dominated by women and is centered on the manufacture of dairy
products. Employers foresee a growth in demand for competent applicants with degrees
ranging from certificates to PhDs, therefore dairy technology bachelor's degrees are
mandatory for employment. Larger organizations recruit professionals, whereas the
unorganized sector usually employs people without official credentials. To meet
international quality standards, dairy scientists with the required qualifications are needed.
One of the difficulties is that open positions in government agencies and educational
establishments have an influence on the standard of education. The high demand for
diploma holders highlights the value of extensive training, especially in rural areas. (Indian
Agriculture and Dairy Sector Skill Council, 2022).
c. Customs and Import Duties
Analyze the import taxes and customs charges that apply to dairy goods in India.
Comprehending these restrictions is crucial in evaluating the economic ramifications of
importing either completed goods or raw resources.

2. Governmental considerations and incentives

a. Political Stability

21
 Potential division is fostered by the BJP's national domination, the prominence of
right-wing nationalist movements, and the lack of strength of organized parties in India
politics. Tensions are exacerbated by middle-class dissatisfaction and social hierarchies,
notwithstanding high voter turnout and democratic satisfaction. Under external pressure,
NGOs and interest groups take up disadvantaged issues. Social cohesion has not been
significantly impacted by the COVID-19 outbreak, and grassroots efforts continue. Support
for India's democracy is still strong despite ongoing difficulties negotiating societal
complexity (BTI 2022, n.d.).
b. Regulatory Environment
Find out everything there is to know about the regulations governing the dairy
business in India. Market success is contingent upon compliance with regional regulations
about product standards, labeling, and safety. Remain informed about any recent or upcoming
regulatory changes that might affect the dairy sector and adjust business strategies
accordingly.

3. Pattern of India’s Transportation

India's transport sector, 5.5% of GDP in 2007, faces challenges with road
congestion, rail capacity, and port demands. Urbanization adds complexity. Addressing
capacity issues is crucial for economic sustainability. In retail, road transport is vital,
especially in key dairy-consuming states like Uttar Pradesh and Haryana. Insulated motor
trucks ensure efficient and cost-effective transportation. (Appendix D.1)

a. Channels of distribution
Surging demand and COVID-19 challenges prompt Indian companies to enhance
distribution networks. Independent logistics firms emerge, focusing on efficient courier
services, especially in smaller cities. Despite warehouse costs, clearing and forwarding
agents are widely used. India's port infrastructure, with 12 large and 205 minor ports, is
crucial, with Mumbai as a key cargo hub. In a joint venture, Vinamilk leverages existing
distribution channels and collaborates with Akshayakalpa agents in 42 cities. Online e-
commerce channels are prioritized for distribution in the post-COVID scenario. (Balaji,
M.,2023) (Appendix D.2)

4. Discussion On Market Entry Option Into Nominated Market As A Possible

Platform For Entry Into Other Markets

22
 Entering the Indian market presents a strategic platform for Vinamilk to establish a
strong foothold in the region and potentially serve as a gateway for expansion into other
markets. India, with its vast population and diverse consumer preferences, offers a unique
opportunity for Vinamilk to showcase its expertise in the dairy industry. By successfully
navigating the complexities of the Indian market, Vinamilk can gain valuable experience in
understanding diverse consumer needs, cultural nuances, and regulatory landscapes. This
knowledge and adaptability acquired in India can serve as a solid foundation for exploring
and entering other markets with similar characteristics. The Indian market, therefore, acts
not only as a significant growth opportunity in itself but also as a stepping stone for
Vinamilk's broader international expansion strategy.

VI. LEGAL CONSIDERATIONS

A. Trade policy

B. Registration of a company

23
C. Ownership

D. Governmental policy on foreign investment

24
 E. Intellectual property protection

VII. Risk Analysis

A. Financial risk
1. Economic Growth:
India has been one of the fastest-growing major economies globally, with an average
annual GDP growth rate of around 7% in the years leading up to 2022. The COVID-19
pandemic had a significant impact on the economy in 2020, leading to a contraction in GDP.
However, a recovery was underway in 2021. (Ministry of Finance.,n.d)
2. Government Initiatives:
The Goods and Services Tax (GST), implemented in 2017, aimed to simplify the
indirect tax structure and promote a unified market. Demonetization in 2016 involved the
withdrawal of high-denomination currency notes to combat corruption and promote a
cashless economy. (ISEC., n.d.)
3. Financial Markets:
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the
two primary stock exchanges in India.The market capitalization of listed companies on the
NSE and BSE has shown steady growth, reaching trillions of dollars. (Balaji, M.,2023)
4. Banking Sector:
India's banking sector comprises public sector banks, private sector banks, and
foreign banks. The State Bank of India (SBI) is one of the largest public sector banks.

25
The banking sector has faced challenges related to non-performing assets (NPAs), and
reforms have been initiated to address these issues. (Brahmaiah, B.,2019)
5. Fiscal Deficit:
India's fiscal deficit as a percentage of GDP has been a concern. Efforts were being
made to contain and manage the deficit to ensure fiscal sustainability.
6. Inflation:
Inflation rates have fluctuated but were generally within the target range set by the
Reserve Bank of India (RBI). The RBI uses monetary policy tools to control inflation.

B. Property Business Seizure/Expropriate Risk

The likelihood of expropriation in India is considered to be at a moderate level. As
per the U.S. investment climate statements, the absence of specific expropriation laws is
noted. However, the government has implemented various measures, such as the
introduction of transfer pricing, the enactment of the Goods and Services Tax in 2017, and
the establishment of new insolvency and bankruptcy laws, aimed at reinforcing business
regulations. Since 1991, the Indian government has been actively disinvesting from state-
owned enterprises (SOEs) and has committed to continued disinvestment. This strategy is
designed to augment government revenue without imposing additional taxes and to diminish
the government's role in the economy. (Australia Government., n.d.)

C. Capital/Profit Repatriation Policy and Risk

Foreign capital invested in India can generally be repatriated in accordance with
regulations, including any capital appreciation, post-tax obligations. Repatriation is
dependent on the investment being made on a repatriation basis under Exchange Control

26
regulations, without being subject to lock-in conditions. Capital can be repatriated through
methods like secondary sale, share buyback, or capital reduction, with share buybacks
following regulatory laws and applicable taxes. Dividend repatriation by an Indian company
is freely allowed, though taxes are withheld. Partners of an LLP can withdraw capital
without restrictions, subject to taxes. Repatriation of External Commercial Borrowings
(ECB) and interest is subject to specified conditions, ensuring compliance with legal and tax
requirements. These regulations collectively facilitate a structured framework for seamless
fund repatriation in compliance with Indian laws. (India Briefing,n.d.)

D. Political, Social Stability, and Risk

India faces a low to moderate political risk, with ongoing military concerns in the
Kashmir conflict with Pakistan and longstanding border issues with China. Escalation of
these disputes could dampen business confidence, deter foreign investment, and undermine
economic growth, urging businesses to closely monitor geopolitical developments. (Australia
Government.,n.d.)

India surpasses the average governance scores of other emerging and developing
Asian nations in all aspects, except for political stability and the absence of violence.
(Australia Government., n.d.)

27
 E. Trade Relations Risk – Other Countries Trade Relations and Policies
Vinamilk's joint venture strategy in the Indian market is intricately tied to
overcoming challenges in market access, and distribution networks, and navigating the
complexities of the local market structure. A pivotal aspect involves the development of a
robust distribution strategy and the establishment of strong relationships with local partners
to ensure effective market penetration. Additionally, in a highly competitive Indian dairy
industry, Vinamilk recognizes the importance of understanding the local competitive
landscape. To succeed, it must strategically differentiate its products from local competitors
and adeptly tailor offerings to align with the specific tastes and preferences of Indian
consumers.

VIII. Financial support

A. Type of financing for the proposed project
Based on previous experience, Vinamilk’s joint-venture was financed by the parent
company itself and has proven effectiveness (Trung,2023). Hence, this project promotes the
use of shareholder’s equity financing.
B. Source of financing
With equity financing, the project is expected to raise capital primarily from
Vinamilk whereas Akshayakalpa Organic would contribute its factories and machinery.
IX. Financial Analysis
A. Assumptions
As analyzed above, by targeting the children age group and the existing products of
Vinamilk, the project’s product portfolio will include 5 product lines with estimated sales as
below(Appendix G.1):

28
 B. Key Financial Indicators: Summary Graphs/Charts of
1. P&L Statement
The Joint-Venture is expected to switch to profitability in the first quarter of
2027(Appendix G.2)

29
2. Cash Flow Statement (Appendix G.3)

30
 3. Break-even Units Based on Estimated Sales
According to the estimated P&L 5-year projection, the Joint-venture is expected to
reach Break-even point at the beginning of year 3, where the generated revenue exceeds
$1,034,423.03 (Appendix G.4).

4. ROI
With the initial product portfolio, the project would be expected to generate
relatively low ROI for the first 5 years (16.75% for the period). However, opportunities
exist when our partner - Akshayakalpa Organic is capable of producing a wide range of
dairy products, helping the Joint-venture expand in the future.

X. Management Team and Structure

A. Discussion on Local and Expatriate Composition
As MNEs, the appropriate approach towards human resource composition has been
focusing on actual talents over origins, embracing the geocentric approach in human
resource management (Robbins et al., 2018,125). To ensure the vision of this joint venture is
aligned with the mother company, the involvement of the Head office’s BOD would be
necessary and Vinamilk’s other subsidiaries are also following this way. On the other hand,
Indian local managers would be crucial for an in-depth understanding of the host market.

B. Structure including alignment with Head Office, based on Vinamilk Corporate

structure (Vinamilk, 2023)

31
 C. Organization Chart
Similar to Vinamilk’s Head Office, the Joint-Venture Departmentalization is
expected to be determined functionally, maximizing the efficiency of each function although
such a method may lead to a lack of cross-functional communication (Robbins et al., 2018,
386).

32
Joint-Venture projected management structure

Head Office Structure (Vinamilk, 2023)

33
XI. Control Strategies
International business control process should demonstrate visible measurements to
ensure effectiveness before, during and after decisions are made (Robbins et al., 2018).
Significant considerations can be listed are:

XII. Sustainability
A. Relevant Market Sustainability Regulations and Guidelines, Policies, and
Incentives:
According to Blokhin (2023), in 2020, India reported the production of 2,442 million
metric tons of total carbon dioxide emissions, ranking as the third largest CO2 emitter in

34
 the world. Consequently, in November 2021, during the 26th United Nations Conference on
Climate Change (COP-26), the Indian Prime Minister committed to reducing emissions by
1 ton by 2030. In addition, by 2070, the country aims to achieve net-zero emissions
(Shukla,2023). Furthermore, according to FTI (2022), in 2021, India had 224.3 million
malnourished individuals among the 828 million people worldwide affected by hunger;
around 25% of people are facing hunger. Therefore, the Indian government has prioritized
Sustainable Development Goal 2 (Zero Hunger) and initiated various programs to combat
the issues of hunger and malnutrition, including supplying subsidized food to more than
800 million people and paying special attention to nutritional development for children
under 6 years old (Bhati,2023).

B. Relevant Company Sustainability Policies for Product Development and

Delivery:
In 2022, Vinamilk completed 17 goals of the United Nation’s Sustainable
Development Goals (SDG)(Vinamilk, 2023). Specifically, Vinamilk has set a
straightforward path for achieving SDG 13 in a long-term and sustainable way. By 2027,
Vinamilk cut 15% of greenhouse emissions with a target of a 55% reduction by 2035. In
2050, greenhouse emissions will be eliminated within the company (Anh,2023).
Additionally, in 2018, the company was honored to receive a certificate of merit from the
Prime Minister of Vietnam for being a successful contributor to hunger eradication and
poverty reduction efforts for people in the region (Chi,2018). Moreover, after a 15-year
journey, the Milk Fund and Vinamilk have donated 40.6 million glasses of milk to 500,000
poor children and the support value is equivalent to more than 190 billion VND
(Vinamilk,2023). The goals that Vinamilk can achieve in the Vietnamese market
demonstrate the suitability of the solutions that the company can provide to the Indian
market.

XIII. Timetable for Implementation

The timetable below illustrates the entire plan for sustainable development of
Vinamilk when it enters the Indian market. This table is divided into 3 phases: Preparation,
Implementation and Expansion which serves as an important key for Vinamilk’s export
project because it provides optimal monitoring and operation of the entire process.

35
36
XIV. Conclusions
In conclusion, Vinamilk's entry into the Indian market through a joint venture with
Akshayakalpa holds significant promise. By strategically leveraging Akshayakalpa's organic
certification and expertise in the dairy sector, Vinamilk can effectively navigate the complex
Indian market. This collaboration aligns with Vinamilk's commitment to providing high-
quality, natural dairy products. The joint venture allows Vinamilk to minimize risks,
optimize costs, and promptly adapt to evolving consumer preferences, ensuring a successful
market penetration and sustained growth in the diverse and competitive Indian dairy
industry.

References

A:

Anh, L. (2023, June 1). Vinamilk công bố lộ trình tới Net Zero 2050 và nhà máy, trang trại
đạt trung hòa Carbon đầu tiên. Nhịp Sống Kinh Tế Việt Nam & Thế Giới.
https://vneconomy.vn/vinamilk-cong-bo-lo-trinh-toi-net-zero-2050-va-nha-may-
trang-trai-dat-trung-hoa-carbon-dau-tien.htm

Anh, N. (2020, May 28). Pandemic prods Vietnamese consumers toward healthy food and
drinks. VnExpress International. https://e.vnexpress.net/news/business/pandemic-
prods-vietnamese-consumers-toward-healthy-food-and-drinks-4105866.html

Australia Government. (n.d.). India’s Profile. Country Profiles.

https://www.exportfinance.gov.au/resources/country-profiles/india/#:~:text=The
%20risk%20of%20expropriation%20in,have%20expropriation%20laws%20in
%20place.

B:

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 Appendices (use for additional discussion to keep within the Word-Count Limit)

Appendix A:

In the domestic market, distribution channels of Vinamilk are segmented into three
primary channels. The first distribution channel is through modern channels that use
intermediaries for sales. By placing investments in dairy factories across the country,
Vinamilk has effectively built a network of more than 1,500 tier 1 agents with over 5,000
tier 2 agents and a presence in both large and small supermarket systems (Vo, 2023a).
Vinamilk’s second distribution channel is through traditional channels which use
wholesalers to distribute products, accounting for more than 80% of Vinamilk's product
distribution activities. This portfolio includes 220 independent distributors and an extensive
network of more than 250,000 retail stores (Vo, 2023a). The third Vinamilk’s local
distribution network is key accounts. Specifically, Vinamilk sells its products through
vending machines in many places such as restaurants, schools, hotels, offices, and hospitals.
Furthermore, it also includes collaborative partners in the food and beverage sector that
purchase Vinamilk products for processing (Vo, 2023b). In the international market,
Vinamilk has been exported to 58 countries, and in most countries, Vinamilk distributes its
products to foreign partners (B2B) to help them reach end customers, collaborating with
entities like Vina Korea Corporation in South Korea, Sojitz Corporation in Japan, etc.

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 Appendix B: The process of setting up a Joint Venture in India.

Source: https://ezybizindia.in/joint-venture-registration/

To create an LLP joint venture, a Joint Venture Agreement and the new company’s
articles of association are required. The steps are illustrated in Appendix B. Crucial areas
that must be covered in those documents are the investment arrangements for the joint
venture, agreements on intellectual property transfer, confidentiality clause, dispute
resolution mechanism, and exit option (Dezan Shira & Associates, 2020).

51
 Appendix C: India’s International Property Rights Index Overall Score in 2023.

Source: https://www.internationalpropertyrightsindex.org/country/india

Note: Trademark Protection data was not available at the time of the survey.

52
 Appendix D: India’s Transportation

1. Pattern of India’s Transportation

According to Person, W. B. (2022), india's transport sector is crucial, contributing

5.5% to the GDP in 2007, with road transportation being the dominant contributor. The
demand for transport infrastructure and services has risen due to the country's growing
economy since the early 1990s. However, the sector struggles to meet the increasing
demand, hindering economic growth and poverty reduction.

Roads play a pivotal role, carrying 85% of passenger traffic and over 60% of freight.
Despite a highway network density comparable to the United States, most Indian roads are
narrow and congested, with poor surface quality, and many villages lack all-weather road
access. The mode of retail distributing goods to significant regions like uttar pradesh and
haryana (two of the states account for over half of the country's dairy products consumption:
Uttar Pradesh (19%), Rajasthan (9%), Gujarat (8%), Maharashtra (7%), and Bihar (7%)) is
road transport following their arrival on the Indian market (World Population Review.,
2023).

Indian Railways, one of the world's largest railway networks, faces capacity
constraints on major corridors, necessitating capacity enhancement plans. The 13 major and
199 minor ports along the coastline play a significant role in India's foreign trade, handling
substantial cargo volume. Despite having navigable rivers and canals, inland water
transportation remains underdeveloped.

India's aviation sector, with 128 airports and a growing demand, requires substantial
investment to keep pace. The urbanization trend, with 42 million-plus cities and a 60% GDP
contribution from the urban economy, poses challenges in organized transport, with only a
few cities having mass rapid transit systems. Public transport share has declined, and high
accident rates disproportionately affect the poor.

While the transport infrastructure is better developed in the southern and

southwestern parts of India, addressing capacity constraints, improving road quality, and
enhancing public transport are essential for sustainable economic growth and poverty
reduction nationwide.

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 2. Channel of distribution

The surge in demand for various goods, coupled with supply chain challenges
exacerbated by the COVID-19 pandemic, has prompted Indian companies to enhance their
distribution networks. This has led to the emergence of independent distribution and
logistics firms nationwide to address the increased distribution needs. Marketers are
increasingly relying on courier and logistics services to handle essential functions, seeking
more efficient ways to connect with consumers. The expansion of India's courier network to
smaller cities, with populations under 50,000, exemplifies the efforts to broaden reach.
Despite the high costs of operating warehouses, most Indian companies utilize clearing and
forwarding agents for distribution, with these agents operating in limited geographic areas.
The country's port infrastructure, featuring 12 large ports under central government control
and 205 minor ports under state and private control, plays a crucial role. Mumbai, a
financial hub, stands out as the primary international cargo hub, emphasizing its significance
in India's distribution landscape (75. I. T, 2022). Concerning the joint venture, Vinamilk can
benefit from the use of nationwide distribution channels that already exist as well as
participation with agents of Akshayakalpa to advertise the products. In addition, since
Akshayakalpa Organic, known for producing the country's popular organic milk and milk-
based products, has expanded its market presence to 42 cities, solidifying its role in the
Indian dairy sector, Vinamilk's products will be sold there. On the other hand, online e-
commerce channels are listed at the top to distribute Vinamilk's products due to the
shopping online habits of consumers in the post-COVID scenario (Balaji, M. ,2023).

Appendix E: previous entry experiences

Since 2020, Driftwood Dairy Holding Corporation (USA) has been facing major challenges
from sales distribution, production, and employment issues to post-pandemic policies from
the US (Vinamilk, 2023). Nevertheless, Driftwood still contributed significantly to
Vinamilk's international revenue, reportedly being the primary growth driver for
international business (Vinamilk, 2023). Another significant subsidiary that was recorded
with consistent annual revenue growth is Angkormilk (Cambodia). More specifically, by
overcoming challenges, the brand achieved annual revenue growth of over 10% for the
period 2020-2022 based on the corresponding annual reports (19%, 14%, and 13%
accordingly).
Appendix F: Initial market segmentation

54
 ● Demographic segmentation: Segment by age
Drinking milk is an indispensable process in a person's maturing stage. Milk provides
necessary and crucial nutrients for human health in general (Kubala, 2023). Indians are also
aware of that, so they consume plenty of milk. The proof is that an Indian ingests 427 grams
of milk daily, much more than the worldwide median (Press Information Bureau, 2022).
Therefore, it would be wise for Vinamilk to take advantage of this opportunity to penetrate
the Indian dairy market by researching what children, adults, and the elderly's milk demands
are and what factors affect their milk consumption behaviors.

● Psychographic segmentation: Segment by lifestyles

Vinamilk can use this segmentation by grasping the Indian citizens' psychology of wanting
to be attentive and paying more attention to health to do business in this market. The
significance of health and well-being is becoming more widely recognized, especially in
metropolitan locations. It can be observed in the increasing numbers of fitness facilities,
nutritious foods, and healthier lifestyles (Business Standard, 2022). Vinamilk can target
people who are health-conscious and busy employees. For those who are concerned about
their health, Vinamilk should emphasize its products' nutrients and health benefits. And for
people who are busy working, producing goods that are convenient, easy to use, and easy to
buy is what Vinamilk needs to focus on.

55
Appendix G: Financial analysis

● Appendix G.1: Unit price:

● Appendix G.2: P&L statement:

● Appendix G.3: Break-even point:

● Appendix G.4: Additional calculations: Headcount projection

56
The project is estimated with 28 personnel to operate smoothly and projected wages are
relatively higher than Indian average wage (AmbitionBox, n.d.).

57