Around the world, we’ve seen digital commerce grow rapidly as a result of COVID-19 and we’re seeing this trend reflected in Viet Nam.
Finding your audience
Here in Viet Nam, there are some key considerations New Zealand exporters should bear in mind to when approaching this fast-moving, competitive market: understand your target customers, how they shop and how best to make them aware of your brand.
Although physical stores remain the first port of call for most shoppers, New Zealand businesses and partners in Viet Nam are reporting that more of their consumers are moving online as a result of COVID-19, particularly at the premium end of the market. Nielsen research confirms that while the majority of consumers still visit a physical store to purchase premium goods, this sector is rapidly moving online with nearly half – 48% – of consumers buying these products online, which is higher than the global rate of 45%.
Therefore, finding the right partnerships – whether directly with online or offline retailers, or with distributors who can help you reach the sales and marketing channels where your audience is active – can make a huge difference to your market share.
The rise of ‘social selling’
What sets Viet Nam apart from its ASEAN neighbours is the pace of change in the e-commerce sphere. Even before the pandemic, Viet Nam was already among the fastest-growing digital economies in the region.
Data from Kantar shows that online FMCG spend expanded to triple digits in the first month after the pandemic was officially declared in the country. E-commerce platform Shopee reported that shoppers spent 25 per cent more time shopping on their site each week, while retail group Saigon Co.op registered a five-fold increase in online sales in just the first week after the first COVID-19 case was detected.
These trends are set to stick, largely due to Viet Nam’s young and digitally connected population. The country boasts 68 million internet users and two mobile connections for every person. Almost three quarters of active social media users are under 34 years old, with a strong presence on Facebook and YouTube, as well as local social channel Zalo.
As a result, there is also a growing trend of ‘social selling’ in Vietnam, harnessing social media networks as a new sales channel to reach this young, connected audience. Figures show sales through online forums and social media networks grew by 57 percent year on year in 2019, and we’ve seen this trend continue, making this an important growth channel.
In fact, GlobalWebIndex figures show that 71% of Vietnamese consumers are more likely to make a purchase based on a social media reference – a key driver of consumer preference.
Digital commerce is more than ‘add to cart’
Going digital is not simply about making products more available to consumers online. I’ve had the opportunity to work alongside New Zealand brands who have taken the time to get their digital marketing right in Viet Nam, and seen how this can accelerate their success, particularly when they address the new consumer demands driven by COVID-19.
Following their Viet Nam launch in May 2020, homecare brand ecostore used their official Viet Nam Facebook page to provide tips on sustainable, healthy, and safe lifestyles during this pandemic. As a result, traffic to the page has been better than ever, and sales through their Lazada and Tiki online stores have also been consistent.
Children’s snack company, Kiwigarden, worked with Vietnamese key opinion leaders and bloggers to promote a campaign giving away kids facemasks as a gift with purchase. The campaign received over 200,000 views and generated 500 new customers in the space of one weekend on local e-commerce platform Tiki.
Online or offline, price still plays a part
While these trends show potential in certain market sectors, it’s also important to look at the bigger picture: Viet Nam was the fastest-growing country in Southeast Asia for consumer spending in 2019, and second only to Indonesia for year-on-year growth in disposable income.
Keep in mind however that this exceptional growth rate is from a relatively low base. Disposable income levels in Viet Nam remain lower than all other countries in Southeast Asia except for Cambodia and Myanmar, while the premium end of the market in the country is still emerging. Currently only 1% of households earn more than NZ$2,500 a month.
This is a reminder that understanding your audience and addressing the trends shaping Viet Nam’s digital landscape is a must for New Zealand exporters looking to succeed in this market. Connect with us at NZTE where we can provide the relevant resources to help you navigate this current environment, or visit NZTE’s dedicated COVID-19 website or myNZTE, our free online portal for curated, in-depth information and guidance.
Written by Karlene Davis, New Zealand’s Consul General based in Vietnam’s Ho Chi Minh City.