Vietnamese brands chasing the dreams

In the 80s-90s of the last century, Vietnam used to have many “national” brands, carrying the Vietnamese dream and a sky of memories like Co Ba soap, Da Lan toothpaste, Thong Nhat bicycle, or Thuong Dinh shoes… Once well-known in the Vietnamese market, but now, those old names have fallen into oblivion.

The year 2000 marked the signing of the Vietnam – US Trade Agreement, opening a new era for Vietnam’s economy. This milestone created a chance for Vietnam to integrate into the world economy as well as for foreign corporations to join in the Vietnamese market. With enormous financial resources, the international brands did not hesitate to throw money at marketing campaigns, mostly television advertisements, to increase the coverage of foreign goods on the national scale.

Since then, Vietnamese brands have gradually become inferior and lack competitiveness. Many old names have stayed in the past as the last generation’s pride, while some have changed to adapt to the new economic environment to pursue the Vietnamese brand dream. Here are the stories of two domestic brands and how they have survived and developed firmly against the challenges of the times.

“The Legend” Miliket: Change to survive

Miliket noodles (formerly known as Colusa – Miliket noodles) is one of the first brands in Vietnam, dominated 90% of instant noodles market share in its golden age. Serving for nearly 50 years, the image of Miliket shrimp flavored instant noodles has carved in the memory of many generations.

After the year 2000, domestic and foreign instant noodles brands started joining the game, boosting capital and proliferating. Once an affordable and indispensable dish for the majority of Vietnamese families, but now Miliket must give up its monopoly position.

Facing the fierce competition of both domestic and foreign goods, Miliket has enduringly developed and expanded its product range to catch up with market trends. Still focusing on the familiar “2 shrimps” instant noodles, but now, the business has developed many other products such as instant pho, porridge, hu tieu, glass noodles, trying to regain the domestic market share. When the trend of cup noodles arose, Miliket also followed and launched similar products not to lag behind. Besides, Miliket persistently produces “4 shrimps” noodles that most dominant brands currently do not provide and distribute to restaurants.

Miliket’s goal is to penetrate the low-end segment and the rural market; thus, the once king of instant noodles does not choose to advertise or carry out any marketing campaigns in the media. Instead, the brand regularly participates in high-quality Vietnamese goods and rural Vietnamese goods fairs to market directly to consumers as well as small retailers. At the same time, Miliket also focuses on distributing products to wholesale markets, retail markets to ensure the brand’s coverage.

Positioning the brand as affordable instant noodles with a long history associated with Vietnamese childhood, Miliket chose traditional yet, practical strategies to reach the rural people. Thanks to that, the instant noodles brand still survives in this highly competitive market.

LIX detergent: Enduring racer

LIX Detergent was born in 1972 under the name of Huan Huan Chemical Industry Company. However, it’s not until 1992 when it officially restructured as Lix Detergent Company (LIXCO) that the company grew rapidly and became the most popular detergent brand in the country at that time.

However, the situation reversed when in 1995, two “tycoons” of the U.S. consumer goods -Procter & Gamble and Unilever – simultaneously jumped into the Vietnamese market. Since 2000, LIX stepped back to process for Unilever to survive. LIX processed up to thousands of tons of detergent, accounting for 70% of the total revenue of the business. For a long time, people rarely see the brand’s products on the shelves in supermarkets and retail stores.

LIX was aware that if continuing processing for other tycoons, the day that the brand disappears from the market will soon to come. The company decided to gradually reduce the process and boost production for the brand, marking the return to the race of gaining market share.

Since then, LIX detergent has remained stable in the market due to development of both products breadth and depth. Product packaging is also “upgraded” to be more attractive and keep up with the trend. Also, the brand promotes distribution in large and small supermarket chains across the country. It reaches out to foreign markets with the main export products such as detergent, dishwashing liquid, floor cleaner, washing liquid, softener, toilet cleaner, Javel bleach, etc.

Do not run any TV advertising, LIX actively approaches customers through community programs at markets across the country. For example, “Gratitude to the woman I love”, “LIX brings spring”, or most recently, LIX has “joined hands in preventing acute respiratory inflammation caused by new strain of Coronavirus (2019-nCov)” by donating more than 5000 liters of hand sanitizer to hospitals, schools, etc.

Thanks to these propaganda activities, LIX detergent gradually regained its position among Vietnamese consumers from rural to urban areas.

Choose the right segment to grow

The xenophile trend of Vietnamese accidentally killed domestic brands, especially in the context of the fierce and competitive market as today. The prerequisite for survival is to expand the product range, change the packaging, regularly update the trend, and most of the Vietnamese brands since the last century have done this well.

To survive the vital battle, Vietnamese businesses had to reposition and redefine the target audience. The once-popular names mostly moved to the countryside or targeted the low-end segment in urban areas, Miliket and LIX detergent were no exception. The rural market accounts for 70% of the country’s population with increasing income, so when shifting to this market, Vietnamese businesses still have a lot of opportunities to grow.

The Trade Marketing strategy in rural areas has a high effect because people are easily affected by word of mouth and herd mentality. Therefore, brands should focus on sales channels and distributions to bring products directly to consumers. Understanding this insight, Miliket and LIX detergent have excelled in their campaigns. In 2019, LIX got 4th rank in the chart of the most chosen family care brands in rural areas, according to the 2019 Brand Footprint report of market research company Kantar WorldPanel.

Vietnam is a developing country with emerging markets, making it a lucrative place for brands to prosper. Through many ups and downs, the old Vietnamese brands will always be the witnesses of persistence, constant striving for the dream of Vietnamese brands – delivering high-quality goods to every Vietnamese family.

 

Author Trinh Nguyen is a Communication – PR Intern at EloQ Communications (https://www.eloqasia.com/). Trinh is studying at California State University, Fullerton, California (USA), majoring in Public Relations.

EloQ Communications is a leading agency in public relations (PR) and integrated marketing communications (IMC) based in Ho Chi Minh City. EloQ has experience in cooperating with foreign companies doing business in Vietnam, including diverse customers from more than 30 countries and territories, some of which appear in Fortune 500 list, many multinational corporations, and domestic companies.