'Action over advertising': Pandemic proves defining moment for Vietnam's national brands

NATIONAL PRIDE MOVES NEEDLE IN VIETNAM's TOP BRANDS

Covid-19 has triggered a rise in patriotism in the majority of markets investigated in Asia's Top 1000 Brands survey, but in Vietnam the growth of national brands is linked as much to strong purpose as it is to impressive innovation.

As international brands delayed the rollout of new products and paused advertising spend to deal with the financial impact of Covid-19 in the first quarter of 2020, several Vietnamese brands took the opportunity to double-down on innovation and rapidly grow their brand affinity with consumers.

"With on-ground understanding of local culture, consumer tastes and demand, local brands can often innovate faster than global brands and tweak their products appropriately for the Vietnam market," explains Chandler Nguyen, the vice president and global Google performance lead at media agency Essence.

Four brands which propelled up Vietnam's local brands ranking exemplify this innovation: Vinamilk, Vingroup, Vietnam Airlines and Kinh Do. Vinamilk and Vingroup notably dethroned Samsung in Vietnam's top local brands ranking this year, while Vietnam Airlines and Kinh Do were new to the top 10. All four of these brands are leading in their respective categories, through a combination of business innovation and purpose.

Dairy giant Vinamilk had a "burst of innovations" in 2019, says Sani Ahmed, a VP at Vietnamese indie agency The Purpose Group, launching as many as 19 new products in 2019 and 10 in 2020, and diversifying into new categories like milk tea and ice cream. The digitally savvy brand continued to roll out video campaigns throughout the pandemic and has amassed a significant following online, with 1.77 million YouTube subscribers. Vinamilk's CMO Phan Minh Tien featured in Campaign's Power List 2020.

Vietnam’s largest listed conglomerate Vingroup, founded by the country’s richest man Pham Nhat Vuong, has continued to invest in major housing development projects in 2020 while diversifying its product portfolio, rolling out new smartphone models (VSmart Joy 4) and cars (Vinfast Lux). "The level of positive affinity towards Vingroup has definitely increased—after all they do truly take Vietnam to a global stage," explains Ahmed.

Snacks brand Kinh Do saw a gap in the market for convenient food and launched a new product, 'Kinh Do Pizza Cheese Sausage Bread' earlier this year that strengthened its position in the bakery and confectionery market. The household brand joined with Mondelez in 2015.

"These brands have leveraged the 'Người Việt Nam ưu tiên dùng hàng Việt Nam' movement successfully to gain traction this year," notes Tai Le, the director of operations and ecommerce at Ho Chi Minh City-based independent shop Red2Digital. The movement, which translates to 'Vietnamese people prefer to use Vietnamese goods', has been spearheaded by the government to increase domestic production for several years, but came into sharper focus during Covid-19.

Notably, while international brands pulled back product launches and advertising during Covid, all of these brands worked hard to keep the lights on.

"One thing we did observe during Covid-19’s initial wave was that a lot of MNC brands did shy away from investing in the market during the troubling times, which is expected due to the uncertain nature of the pandemic," says Ahmed. "But the local brands pushed out CSR initiatives, product launches, and maintained a positive mentality, which we assume built more brand love amongst the country and consumers.

"For example, Kinh Do proactively organised to keep their factories functioning fully and under strict safety guidelines, while also supporting their partners and distributors by incorporating new sales management tech to help them to continue growing."

Beyond product innovation, the Vietnamese brands have a deep focus on purpose and committed resource to ease the pain of the pandemic.

Vinamilk invests in a school milk programme aimed at improving children’s nutritional intake and development. During the pandemic, Vinamilk contributed nearly VND 40 billion (approximately US$1.7 million) to purchase medical supplies and equipment for early detection and donated large quantities of nutritional products to support the front line anti epidemic forces.

Vingroup built non-for-profit ventilators to aid Covid-19 treatment and donated the first batch of 3,200 ventilators to Vietnam Health Ministry. It also gave the Ministry access to its DrAid artificial intelligence software to support the diagnosis of Covid-19. 

Vietnam Airlines organised flights to repatriate Vietnamese citizens, including vulnerable citizens, such as students under 15 years of age, senior citizens, pregnant women, those with illnesses and disabilities, and others whose visas have expired.

Tan Nguyen, the CEO of TBWA Vietnam, explains: "Big Vietnamese brands played a critical role in supporting our government's efforts to effectively manage the pandemic. This act provided a sense of achievement that Vietnam is progressive, innovative, modern and competitive."

Nguyen notes it wasn't just major brands that shifted to help during the pandemic: "Very early on we saw ATMs become rice dispensers promoting limited contact and florists—which were not considered essential services—become coffee shops adding flowers to the top of the coffee cups."

"Across the country, this strong sense of national pride then extended to the decisions we were making around products and services, as we supported our own brands and our communities," she adds.

Linh Nguyen, a brand and connectivity consultant at Happiness Saigon, says these actions prove that  social responsibility and sustained investment in advertising translates into business success.

"Covid-19 has brought difficulties and challenges to businesses, but also opportunities for brands to reinforce the local voices and make a mark on consumers' minds through practical actions. It’s time to act, not advertise. We believe that brands should invest, but thoughtfully and while tapping into the power of creativity. The sustained investment in a crisis will deliver a greater long-term business value. And when the roots are deep, there is no reason to fear the winds of change," Nguyen surmises.