Vietnam's top 100 brands: Brands who localise make major gains in high-velocity market

VIETNAM's TOP 100 BRANDS: RANKING ANALYSIS

Vietnam is somewhat of an outlier in our Top 1000 Brands markets, since major fluidity within its favoured brands is informed more by rising expendable incomes than it is by frugalness associated with Covid-19.

The Socialist Republic was one of the fastest markets in the world to respond to Covid-19, initiating testing and lockdown measures as early as January. As a result, its containment of the virus in the early months of 2020 was exemplary, and the country was among the first to reopen businesses.

That's not to say the country's businesses weren't affected. In the first three months of the year nearly 35,000 companies went bankrupt—which was the first time in decades that the number of companies closing down was higher than the number of newly registered companies, according to the Asian Development Bank.

But the country's economy has remained resilient throughout 2020 and continues to be among the fastest-growing in Southeast Asia, aided by the fact that the middle class continues to grow, in turn stabilising consumer spending levels. More than 40% of Vietnam’s GDP is driven by spending on necessities, according to a McKinsey & Company report—a category that has remained strong throughout the pandemic.

A growing middle class means Vietnam is prone to major fluctuations between which brands are the flavour of the year, with very little stability in the top 100 brands ranking year-on-year.

There were 25 brands that moved up 10 slots or more in Vietnam's top 100 brands ranking for 2020, and 10 new brands to join the top 100. Overall, there were more risers than fallers this year (a total of 21 brands fell 10 places or more)—the opposite of 2019’s ranking, where there were sudden and sizeable drops among chiefly FMCG, food and drink and beauty brands.

Some gains can be attributed to expected shifts in categories like FMCG—with brands such as Tropicana (92nd), Maggi (58th), Heinz (59th), Huggies (55th), Lux (61st), Pepsi (76th), Nutella (63rd) all gaining ground. Similarly, FMCG saw several losses of brands such as La Vie (69th), Milo (45th), Nescafe (67th)—falling 23, 21 and 16 places respectively.

But one brand's significant rise is a shining example of the value in local marketing. Louis Vuitton (57th) was the second-highest gainer (up 98 places) in Vietnam's top 100, which directly correlates to the brand's launch of a major marketing campaign shot in Vietnam’s iconic landscapes, including Ha Long Bay, Trang An, Hoi An and Sa Pa. Launched as part of the label's 'The Spirit of Travel' series, the campaign launched in September.

Tai Le, the director of operations and ecommerce at Ho Chi Minh City-based independent shop Red2Digital, says Louis Vuitton has successfully leveraged KOLs and celebrities in Vietnam to grow brand affinity in the market in the past year.

Travel is an interesting category; accounting for several of the gains but also one of the biggest losses. Indonesian travel tech firm Traveloka, which jumped a significant 67 places, had a busy 2019 launching a new offering in partnership with major Vietnamese businesses, and could have gained additional local favour from its acquisition of Vietnam's Mytour in late 2018. Competitor Agoda (95th) also rose, entering the top 100 ranking this year. Hotel chain Hilton (98th) similarly joined the top 100 rank by moving up 32 places.

Australian budget airline Jetstar (84th) was among the biggest fallers in 2020, down -23 places, as Vietnamese airline carriers Vietnam Air and VietJet Air unsurprisingly saw a boost. This can be attributed to the growing patriotism in Vietnam—a key theme within its top local brands list—that bumped several Vietnamese brands up the overall top 100 brands ranking. VinaMilk (16) leads this trend moving 37 places up the ranking, followed by other local brands such as MobiFone, Vietnam Air, VietJet Air and Vinmart—which all moved more than 10 places.

Social media platform Twitter (88th) was the biggest gainer by far, up a whopping 122 places to join the top 100 list from its 210th slot in 2019. This is likely attributed to the fact Campaign and Nielsen, the conductors of Asia's Top 1000 Brands survey, added in a new messaging services category in 2020. Brands like Facebook Messenger (which shot straight up to 31st place in Vietnam's list) and WhatsApp were new to 2020, and the category boosted the performance of the likes of Twitter, WeChat and Line.

Still, it is interesting that Twitter performed so well in a market where it has relatively low penetration. Twitter trails behind its competitors when it comes to penetration in Vietnam, ranking as the seventh most-popular social media platform, according to GlobalWebIndex, with a reported 1.27 million users. WhatsApp has much higher penetration, used by 78% of Vietnam's internet users, but ranked at the very low 343rd place. Twitter's boost could be due in part to an annual rise in social media users, with 5.7 million people in Vietnam new to social media between 2019 and 2020, combined with a jump in social media usage as a communication tool during the Covid-19 pandemic. For example, the official Twitter account of Vietnam's Ministry of Foreign Affairs, @MOFAVietNam, has grown its follower base by more than 50% since the beginning of 2020.

In the top 10, the only change saw Apple and Panasonic, and Nike and Lotte, swap places.

Indeed, it isn’t until 25th place onwards that any noteworthy shifts begin to occur in Vietnam's top 100 brands.