The situation of COVID-19 in Vietnam is nothing short of a miracle. The country was one of the first to take strong measures to successfully contain the pandemic, successfully managing to crack down on the spread of the virus via tough border controls and social distancing measures from day one. As early as April, Vietnam was reporting no new cases, lifting social isolation measures and reopening its economy in record time, with only 22 days suspension of non-essential activities.
Thanks to the pandemic, digital transformation in Vietnam quickly became a priority for businesses facing a “do-or-die” situation. Increased demand for online grocery shopping and food delivery services created new and exciting opportunities for businesses with retailers reporting a tenfold increase in orders by phone and apps compared to normal days. Car-hailing and housekeeping apps have also enabled grocery shopping services to serve customers' home-shopping needs. On top of that, the demand for hardware such as laptops and tablets and software services such as Zoom, increased as a result of work and school shifting their operations into the virtual space.
As the Vietnam market continues to evolve in the wake of the pandemic, there are three key trends we are seeing which offer key learnings that could make or break a brand’s success in the market.
1. As eCommerce blossoms, agility is the key
According to Global Data in March, Vietnam’s eCommerce market is projected to grow at 16.3% CAGR from US$9.4 billion in 2019 to US$17.3 billion in 2023. COVID-19 not only changed consumers’ behaviours, but also forced traditional retailers and manufacturers to go online. Those who did this well saw big returns, including Vietnam’s Coffee House chain, which despite suffering slowed sales and the shutdown of many branches during quarantine, managed to see record growth during lockdown, providing fast free delivery via its app, plus various promotions and collaborations to cross-sell with other lifestyle brands, including CGV, City gym and QUALÁ, according to media report.
Viettel Post, a key player in Vietnam’s logistics industry, reported a 17% rise in profit despite COVID-19, with its delivery and eCommerce apps Viettel Post, MyGo, and Vỏ Sò seeing high demand from people stuck at home while social distancing. The company also took the opportunity to launch new services to create additional convenience for consumers, including spot delivery, two-hour delivery, four-hour delivery, and "MyGo Express". Along with the introduction of these new convenient services, the company also ramped up its CSR efforts, working closely with the government and donating nearly one million masks to protect against the virus.
Just as with any fast-changing situation, it’s those brands who act quickly to meet the demands of customers, who will come out on top. In this case, being agile and providing an excellent digital experience saw many brands in Vietnam thrive despite harsher market conditions. We expect this trend to continue, putting the pressure on more brands to raise the bar when it comes to eCommerce and digital experience in order to outperform competitors in this "new normal".
2. Health is king above all else
The pandemic triggered many public fears and anxiety surrounding health. A survey done in May revealed that 81% Vietnamese consumers shared that they are more focused on health amidst the pandemic. According to Nielsen, this trend is also reflected by an increase in consumption and demand for products perceived to be healthy, including eggs and fresh foods, along with healthcare or personal care products like mouthwash, handwash, hand sanitizer, tissues, vitamins and even condoms.
A leader in the personal care category, Lifebuoy took swift actions to win consumers and drive sales. One of the effective health protection measures recommended by WHO is to wash hands properly and regularly. With the mission of “For a healthier Vietnam", Lifebuoy expanded its portfolio and introduced new products to meet increased demand for convenient hand-cleansing products, including dry hand gel, hand-wash soap and bacteria-resistant wet wipes. On a social front, Lifebuoy cooperated with the Institute of Occupational and Environmental Health and the Central Vietnam Youth Union to carry out the fundraising program "For a Healthy Vietnam", creating videos to raise money for handwashing stations in the country.
The campaign created a special dance designed to show people of all ages how to wash their hands which was shared more than 209,000 times by the Vietnam public, celebrities and influencers, helping the brand to raise approximately US$99,195 to build 113 hand washing stations across the country. By building free hand washing stations, Lifebuoy also built its image as a national health brand and successfully communicated its mission of improving the sanitation of the Vietnamese people.
The key takeaway from this, is that COVID-19 has cemented health as a top consumer priority for the foreseeable future. It’s a factor which will likely reshape how we live, work and play in a more defined way than ever before. Brands who stay mindful of this and respond in positive ways that help, are likely to build consumer trust and forge more meaningful connections with consumers in the long-term.
3. Brands need to meet the demands of the economic crisis
COVID-19 opened up a plethora of financial challenges. According to McKinsey, two-thirds of people in Vietnam said their income had been disrupted by COVID-19. This led to lower spending expectations across categories, except for essential items such as groceries, food delivery and telecommunications, and an increase in the need for people to save up or protect their finances.
It’s brands who have gone the extra mile to meet consumers in the middle who are seeing the best traction during this time. In efforts to reach moms and families in Vietnam feeling the financial pressure resulting from the pandemic, Lazada partnered with popular baby formula brand, Friso to launch “Super Sale Friso” on the Lazada platform, offering huge discounts across essential baby products, while also collaborating with popular household brands to provide 50% reductions on a huge range of essential everyday items with free shipping across products from popular brands like Pampers, Tini World, Baskin Robins, Downy and more.
The impact of COVID-19 means brands need to step up their game to provide products and services that satisfy consumer demand in these increasingly turbulent times, and particularly in view of the increasingly tough economy which is characterising the new normal post COVID-19.
Vietnamese culture is a living example of “strike while the iron is hot” – as demonstrated by the country’s fast and efficient response to the COVID-19 pandemic. Since then, businesses in the country have been stirred to action in rethinking their business models, and exploring new territories for success, while remaining vigilant and agile to changing consumer demands.
In Vietnam, the worst may very well be over, but we remain mindful that unpresented situations can occur at any time without warning, so remaining true to the customer and with a compassionate customer-centric approach to everything you do as a brand, will likely determine whether your brand remains relevant or becomes irrelevant in the long term. If the pandemic has taught us anything, it’s that meaningful connections matter most, and brands who operate with this in mind, are likely to see the biggest returns.
The writer is Quynh Nguyen, strategy lead, VMLY&R Vietnam.
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