E52: Is Vietnam's richest demographic being ignored by brands?
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They are super rich. They don't spend much and they just saving money and invest for the future. That group of customers should be the one brands should pay attention to. Welcome to You Don't Know Vietnam, the show that demystifies Vietnam for global audiences by talking to the creatives, trendsetters, and business owners who are taking on the market.

Forget what you thought you knew about Vietnam. It's no longer that, as you're about to find out. I'm Ian Paynton, co-founder of We Create Content, a content marketing agency that helps global brands enter Vietnam and connect with Vietnamese consumers. We make global brands relevant in Vietnam with always-on, hyper-local content.

On this episode of You Don't Know Vietnam, I'm talking to Lai Thiên Mank, who is the Managing Director of market research and branding agency MyBrand. Today, Mank tells me how and why branding has changed in Vietnam in recent years and discusses on-the-ground perceptions of local versus global brands.

He shares why Vietnamese consumers have such different behaviours from north to south and why this makes gaining hyper-local insights so important for your product design, brand positioning and marketing messaging, especially if you want to win the hearts and minds of local audiences. He also reveals which demographic in Vietnam is an untapped goldmine that many brands are currently ignoring.

Hi, Ian. Xin chào. Xin chào. Thanks for joining me on You Don't Know Vietnam. My pleasure. Thank you very much for inviting me. I think it's super important, right? Talking about brand in Vietnam, the growth of brands, how international brands can do better here, how local brands have improved over the years. How have you seen branding change in Vietnam over the last 10 years, would you say? In the last 10 years, branding has changed a lot. It

In the early stage of my career, I'm working at Hồ Kinh Vy. Most of the international brands are the leading brands in Vietnam. And back to 10 years ago, to keep the brand ahead,

They spent a lot of money on the media, traditional media like television, TV show, outdoor events, something like that. There were some big advertising companies just the media buying. This is massive money putting into the media at that time. And for that,

Vietnamese brands have no way to compete because local brands do not have massive budget for media buy. So only people see Coca-Cola, Tiger Beers, Heineken, a lot of international brands taking all the advertising spots in the traditional media.

But recently, as time changes, I think the communication channels are diversifying, more social media is coming in. People may be less spending time on TV, spend more time on the mobile phone. And that's the reason why there's a chance for local brands to start to appear towards the customers. Spending money on social media is more targeted.

That means you don't have to spend a lot of money to bomb back all the market, but you can choose your target audience to put the very targeted campaigns on the certain social medias like Facebook or YouTube. That's why there's a growing of Vietnamese brands coming to the market. The second thing is that recently the standard of production in Vietnam is quite improved.

It means that the products made in Vietnam recently have much quality. They have experience from production for foreign brands, and they now understand the way of managing their production, managing the materials, managing the quality control, and that makes the Vietnamese products improving in terms of quality.

And also in terms of design. Got it. So social media has democratized the media buying space a little bit. It's made it more accessible for local brands. Exactly. Also, production techniques have increased. So there's better products and design has definitely improved as well. So you've got better brands. So altogether...

You've got a growing demand for more local brands among Vietnamese people. Exactly. I'd say that they don't actually just love an imported brand because it's imported anymore. There's a certain pride, isn't there, around a Vietnam-grown brand, I think. The pride of the local people is something that explains that people...

trying to choose the local brands over international brands. We know even the government, they try to carry out the campaign that local people buy local brands. And then that triggers a lot of that sense of nationality. And they have the pride of holding in their hand a product that's made in Vietnam rather than an international brand.

But if we're talking about the social status of the person, it is another aspect. For that kind of bride, I think they

will choose international brands to show that they are at different level, they are using expensive products, they want to enjoy the international standards. So this will happen in luxury high-end products, technologies, cars, things like that. For that kind of behavior, international brands are still the winner because up to now,

international brands still winning in terms of higher quality, higher standard, more prestige. The branding campaign sold international standard and that will make people feel that maybe I'm more practiced than others when I am using a famous international brand.

So from what I'm hearing you saying is then that there's pride around local brands now and consumers in Vietnam aren't just going to love a global brand because it's imported. However, in the higher end, in the luxury segments, there is some prestige and status around these luxury brands, these tech brands and automobile brands.

But that's not to say that when coming to Vietnam, they don't have to connect with the Vietnamese in a really local way, right? With their advertising, their marketing. It's still paid to be really hyper-local in their approach in Vietnam and adapt to the market as a unique market.

Except the high-end segment, I think the high-end segment, the international brand should keep the origin marketing message because this is global images. But for other segments, it is highly recommended that the international brand should customize any marketing message to fit with local values.

Even I'm seeing that brands like Coca-Cola is trying to communicate the values of Tet holiday, family values. That is more traditional to Vietnamese people. And it's easier to get the attention from the mass market because Vietnamese people have a lot of traditional cultures outside for most people.

men and women, the traditional songs, they've still long been injected into the blood of the Vietnamese people. That's why international brands should

come and see themselves adapt into the local cultures. That is the best way to take the attention from the audience. So how important would you say is insight then for these global brands? And before doing anything in Vietnam, really understanding the Vietnamese consumers, understanding their brand's position in the market, perception in the market, and

Figuring out a local positioning and messaging strategy. As I say, they have to spend quite money and time to learn before coming to the market. Marketing agency, market research agencies is the first agency you should learn from. Things in Vietnam change so quickly. Even ourselves, the local people, when we do research, the research may be very different from three or four months ago. Things change fast.

quite quick. So that's why getting the local insight is always the first priority before coming to the market. To make sure that you don't assume that any successful story outside of Vietnam in other countries, maybe 100% happen in Vietnam. It will not happen that way. We understand the scenery, the situation of the market and adaptation.

That's the key. Is there anything to look out for in the market research phase that you see brands fail at? Are there things that are easy to get wrong? Yeah, yeah. When foreigners or foreign brands come into Vietnam, they may be talking to others and simply may be satisfied with the people saying that in Vietnam, it's diversified. This is the North and the South is very different. It's true, but it's not enough.

because Vietnamese culture is very diversified. Even the language they use is very different from this province to that province. The pattern of payment or purchasing power is very, very different from area to area. And if you want to win, you need very different marketing strategies for different areas.

because of the culture, because of the consumer behavior. It's so different from province to province. That is a challenge, isn't it? And I love how diverse Vietnam is from north to south. From the seasons to the language to the food to what's happening in production. But you're right, it's a marketing challenge. How do you connect with these people

different demographics and psychographics around the country because Vietnam is not just one population, right? It's so diverse and so varied. Exactly. Do you think that what you've just described about purchasing power in the South versus the North versus the seaside, has that got anything to do with why the Saigonese are known to spend a lot more cash than, let's say, Hanoians? Mm-hmm.

That's something we are trying to explain to ourselves. And a lot of businesses that the Saigonese are ready to spend money, they earn money and spend money immediately. So they don't take very long when purchasing something. Versus the northern people who take a lot of time to consider, to find out things and then make the decision.

So we've been discussing and we say that maybe it is because of the history and the environment is so different. Because in the South of Vietnam, the weather is quite nice. Two seasons in a year, the raining and the sunny season. And especially the Mekong Delta, which takes a lot of the mid-area in the South, people find it so easy to grow vegetables or fruit.

food, rice, fish, and many things. So the agriculture products is growing in the South a lot easier than in the North. The North will have four seasons weather. People have very cold time, very hot time with the storms coming and people have drought every year. So that's the crop is harder to grow. So it means in the past,

It is harder to have the proper crop than in the South. So the North people maybe bring that kind of feeling and they think that it's hard to earn money. That's why I have to save a bit for the future. Maybe for tomorrow, I don't have enough crop. So that kind of

of behavior. While in the South, people feel very easy to get something if I don't have money today, I can go to the field and I have quickly have some fish, quickly have some vegetables, and I quickly have a nice dinner. So that explains why people in the South is more comfortable to spend money rather than people in the North.

However, because of the spending behavior, people in the North tend to have more saving money. So they have mid-cash in hand. And then for that, they are more comfortable buying more expensive things like properties, lands, cars, and expensive items than compared to people in the South. I think that's the reason why. It's fascinating, isn't it?

Interesting, very interesting. A country of 100 million people and there's so much variation in spending power, consumer behaviors, and that impacts your messaging, your marketing strategy, your product market fit. Yes.

For big brands, when we are working with, for example, mobile phone, it is the brands that the whole country is the target audience. They design the products and they name the products differently from region to region. It's close to the culture of people in the region. Naming, pricing, customer care programs.

They all design different to make sure that the fit with the local people and they have enough resources to do that. Not many brands can do that. But if some brands can do that, I think that is a very good way to show that the brands do care about the differences and do care about the local as a reason that may help better for winning in the market.

Vietnam's moving quickly. Its consumers change as you move up and down the country. How would you say Vietnamese consumers have evolved over the last five years? What's true of them, let's say, five years ago that's not true today? I think there's a number of things we can easily realize for the last five years and now. I think the first thing is that the way they do payment.

Five years ago, we still using a lot of cash, just cash everywhere. Every occasion when we buy anything from cheap to expensive, we all using cash. It is and cool. This is a cash economy. But in the last five years, banking and payment methods has improved a lot. Digital banking, the

The banks are investing a lot in transforming and then it leads to the payment method today. I think up to more than 60% of all payments are made by digital payment, which is faster, easier. QR codes are everywhere, every corner of the street, every small shop, they use QR.

for payment. That is a very nice way of transforming. The other things, it related to the fact that

Before, brands think that well, big shops is big win. They try to open very big shops to get people in. But recently, things changed because now people getting to buying things online, they are not always want to go to the shop. The brand have to rethink the strategy from brick and mortar into online shopping.

And that is something a small shop can have a big win overnight, which is something that never happened before. Because before the small shop don't have any opportunity to get the sales of maybe millions of dollars. No one can dream about that. But it is the truth now. So a big change for Vietnamese economic sense.

So the biggest changes then are going from cash to digital payments. I thought that wouldn't happen when I first got here. Vietnam is using cash for everything. And it's certainly increased and accelerated over the last five years, I think since COVID. Now I don't carry cash at all. I can go out confident with my mobile phone and not need any cash. And I'm not even using Apple Pay or Google Pay. I'm just using QR code. Yes, that's the most popular in Vietnam now.

The second thing is going from bricks and mortar shopping experiences to online e-commerce. And actually that's having a big impact on some of the bigger brands because they're

They're struggling to make that digital transformation. Whereas smaller shops and smaller brands are able to adapt much more quickly, adopt things like TikTok shop, Shopee, Lazada, and actually take a piece of the pie that way while the bigger players are still trying to transform. Yes. It's interesting, isn't it? The whole live streaming space and the e-commerce space. I think Vietnam have quite a similar culture to China.

And the Vietnamese shop owners got a lot of inspiration from Chinese swimmers. Because in China, they are famous with some swimmers who make their sales up to multi-million dollar sales.

a live stream. So that's inspired the Vietnamese people to follow and they got some results too. I did see that streaming group in Vietnam that made billions of dong's worth of live streaming sales. It's quite remarkable. Everyone's talking about the growth of the middle class in Vietnam. Do you think there's a particular segment that no one's actually paying attention to that they should be paying attention to? For most of the brands, most of the brands think that

the middle class is the most important part because they are still working, they are earning money, they have monthly income, and they are the shanghain who are spending. But I think in Vietnam, the people who are over 60, I mean people born before 1964, is a group that maybe not many brands are paying attention to. The baby boomers in Vietnam, they...

have quite a hard time. They spend their youth with two or three wars in Vietnam. For the past 60 years, Vietnam has at least three wars. The wars with the French, the war with America, and the war with China. This is not Vietnam. So Baby Boomer is some of the group that spend the

most difficult time when they are young up to now. They don't spend a lot of money for themselves. They want to save money for other people in the family, for the younger generation. And up to now, actually, a lot of baby boomers have a lot of money because they don't spend. And they have quite a

a good sense of investment because when they have money, they start buying property, buying lands, buying gold. And I think some part of maybe boomer in big city, they are super rich. They are very rich because they don't spend much and they just saving money and invest for the future.

That group of customers should be the one some brands should pay attention to them because as I see in the market, not many brands design the products or service to serve the baby boomers, the people who over 60, except maybe some healthcare service or insurance service or something like that. So only that is not enough.

because people over 60, they still have a lot of power. They still have a lot of energy. They have big demand for luxury traveling. They spend a lot of money for traveling. They go to fitness, they go to spas, they enjoy a lot. Fashion, jewelry, high-end technologies, cars, all that kind of category can easily get money from the rich. So it's a completely underserved and almost forgotten about

Gold mines? Yeah. For brands. Yeah, that's a gold mine. I think that's a really good insight. Like you said, they're super active, aren't they? They're still doing business. They're hanging out with friends. They're playing pickleball. They're going to the gym. Exactly. Yeah. Back in the UK, they would be sat on a sofa watching daytime TV, doing nothing and just getting old and lazy. But I think in Vietnam, they're much more active. Yeah, yeah. True.

If you could give one piece of advice to global brands coming to Vietnam to either do market research correctly or speak to Vietnamese consumers, engage Vietnamese consumers on a daily basis, what would that advice be?

For new brands coming to Vietnam, as I said, please come to see the research agency. That is one of the top priority. But the advice is that be very clear on the business objective and be comfortable to share the business objective with research agency.

Because when you come to research agency, normally by bringing question, I have this question, I have that question, please try out and give me the answers. It is not enough because research agency needs to understand the bigger picture. What you are using that answers for? What the real purpose, what's the real business objective you want to achieve in Vietnam? That's why

The research agency can redefine the question together with the brands. So if you spend money on market research, spend it wisely. And you need to get the right answer to make business decision, not just

answer for curiosity for yourself. It is not enough. It's not making sure your success in Vietnam. So when you land in Vietnam, make sure you do your market research, probably through a local agency and treat that agency as a partner and be very honest and clear about your bigger ambitions, your long-term goals. So that agency can really tailor the market research and get the right answers for you. Exactly. Thank you very much for this wrap up.

So I like to end these episodes by asking you, what are you most excited about for Vietnam's future? Everybody is there talking about what the government is doing. The government is cutting a lot of operations to simplify the whole operation structure. And that will actually inspire a lot of brands, a lot of companies to do the same. Because the

operation effectiveness is very important. And if you ask me what I'm inspiring about right now, we trust the way the government and other people is improving the operation efficiency itself. I see a lot of companies having system they have complicated

decision-making process, everything has to go step by step, it is called procedures, it is very ineffective. And people need to learn to act quick, make quick decisions. And I hope that with that kind of attitude, Vietnam will have a good jump ahead for the next, let's say, five years.

You've been listening to You Don't Know Vietnam. I'm Ian Paynton from We Create Content. I'd like to thank DJ Jace from The Beat Saigon for their epic soundtrack and a massive thank you to you for making it all the way to the end.