How to enter the Vietnamese market with FMCG products

Almost all transnational brands are represented in Vietnam. Vietnamese and foreign goods stand separately from each other, and the attitude towards the latter is positive. For the Vietnamese, imported goods are quality goods.

How to enter the Vietnamese market with FMCG products

Russian goods are also known here. They are perceived as European, but cheaper. In Vietnam, Russian meat, sunflower oil, caviar and chocolate are known and appreciated. Dmitry Vasenin, managing partner of VietSmart, told how to enter the country's market.

Market analytics

You can find out and analyze the real state of affairs in the Vietnamese market:

Through analytics of the customs database. Here you can find everything that is officially imported. What can be understood by analyzing the data: who buys what and imports it into the country, in what quantity, at what price, from whom, when. This way you can mark potential buyers and partners for your type of product.

Through marketplaces. If we talk about fast-moving consumer goods (FMCG), you need to take into account that a considerable part of them are sold on marketplaces. Visual information about this is stored in digitized form: what the market consists of, who are the top sellers, stores, product cards, and more.

Through reports from business associations, as well as government and tax reports. In Vietnam, you can even buy inside information from distributors of large chains. The most current analytics are collected for the last two years.

As for offline trading, it is very difficult to give information about how things are in this area. Experts estimate that between 40% and 60% of Vietnam's economy is in the shadows. Goods are imported unofficially and are often sold for cash.

Strategic plans

Having identified key partners in the market, you can begin communicating with them. Please note that many companies do not have employees who speak business English. The best option — Vietnamese mediator. It is important to choose this person correctly, because he can become the entry point into the Vietnamese market.

To achieve the desired result, several business meetings in an informal setting will be required. It is important to know that Vietnamese entrepreneurs take business esotericism seriously. For them, every detail matters: your date and place of birth, facial expressions, gestures, appearance, and more.

In Vietnam, a person buys from a person, not from a brand. That is why personal presence in the country of you or your representative is necessary.

To enter the Vietnamese market, at first you need to set attractive prices for products relative to competitors. This will make it easier to sell and earn more from it. If we lower prices — not an option, marketing will help. But here you will have to invest a lot in advertising.

You won't be able to make quick money here. There are 96 people in our business club of Russian-speaking entrepreneurs. And among them there is not a single one who would have received the first positive results in this country earlier than six months later. That is why you need to make a decision about entering this market carefully.

Registration and certification

For Russians in Vietnam, the visa-free regime is valid for 45 days. The visa is valid for 90 days and costs about 25 US dollars.

In order to conduct business officially, you need to obtain a Temporary Resident Card or a resident card. This will take about three months and cost $1,000. But, as practice shows, at first you can conduct business without it.

When looking for partners, don’t stop at just one. The peculiarity of the Vietnamese is that they work with a partner as long as it is profitable for them. Or until they find a way to produce or buy the same product as yours, only cheaper.

It is impossible to register a company in Vietnam without knowing the Vietnamese language. Therefore, local partners are definitely needed. To open a foreign company here, a legal entity or an individual, it will cost 3 – 4 months. It will cost 6 – 10 thousand US dollars

Another option — open a company in the name of a Vietnamese citizen with subsequent transfer to a foreigner. The process will take 2 – 3 weeks, and if without delay, then a week. It will cost about 4000 US dollars. But here there is a risk that it will not be possible to agree on the transfer: for example, the Vietnamese partner may inflate the price. Such cases have happened.

In parallel with registration, the product certification process is launched. In order to certify the “food” and cosmetics, you will need 3 – 4 months. Cost — $100 per position. But you can also speed up the process by doing everything in 3 – 4 weeks.

Equipment, electronics, industrial and construction equipment do not always require certification. For some positions, application documents are required. Mandatory moment — All documents must be issued to the Vietnamese importing company.

Packaging, promotion, delivery

The cheapest distribution channel for FMCG goods — marketplaces that are developing in Vietnam. Based on the results of work in 2023, the Vietnamese online platform Shopee entered the top 10 largest in the world, taking fourth position and overtaking AliExpress.

In Vietnam, selling through social networks banned in Russia works well. One of the key players in online trading in Vietnam are aggregators. In offline trade, the segment of organized chain retail is actively growing: 20% of all retail trade (in Russia - 50%).

If we talk about advertising and promotion, offline promotions, brand parades, photo zone design, and SMS mailings are still used in Vietnam. Free shipping is also still considered an effective advertising tool, since the buyer usually pays for it.

There is a lot of outdoor advertising in Vietnam: loud, assertive, bright. The streets in the cities are very noisy, but there is a lot of greenery and sun. Natural colors in advertising are almost not perceived by the Vietnamese. "Outdoor" here — this is often expensive and not particularly effective. Advertising on the Internet and sales through bloggers work much better.

In order for a product to sell well, you need to answer the question in advance: why will the Vietnamese buy it? In addition, you need to remember about the climatic and cultural characteristics of the country. Vietnam — a country with a hot climate and high humidity. That’s why food packaging here is strong: to keep moisture out. The product sizes are also adapted to the market. For example, cookies or sweets here are of such a size that they are enough for exactly one time.

All inscriptions on the packaging must be in the manufacturer's language. In Vietnamese, as a rule, there is only a sticker. If the packaging is translated into Vietnamese, the product will most likely be mistaken for a fake.

Vietnam — a country where 73% of the population rely on motorcycles as a means of transportation. In this they are leaders in Southeast Asia. Motorbikes are used to transport any goods throughout the country. This is one of the features of local delivery. Therefore, the packaging must be adapted for such transportation.

Motorcycles influence lifestyle. For ordinary Vietnamese, have breakfast in one place and drink coffee in another — The usual thing. Retail outlets are designed so that it is easy to park near them.

If you manage to overcome many bureaucratic, cultural and market peculiarities, and begin to successfully sell your goods on the Vietnamese market, the entrepreneur may encounter another local peculiarity — withdrawal of earned money. It is also worth taking care of resolving this issue in advance.

3/13/24
Dmitry Vasenin, managing partner of VietSmart
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Source: RB.RU portal