🦌 Vietnam Is Now Willing To

Earlier today, I was briefed by our senior military and national security leaders on the status of the drawdown of U.S. forces and allied forces in Afghanistan. When I announced our drawdown in According to the MOUs signed between the Embassy and the institutes, Vietnam Nationals can apply for undergraduate, postgraduate courses beginning from September/October 2021. Under the initiative, Vietnamese students are not required to pay any application fee. Each scholarship provides approved tuition fees as well as accommodation and meal A US army veteran has allegedly been found living in a remote Vietnam village - 44 years after he was presumed dead when his helicopter was shot down. Oh-we-oh Ho Chi'Minh Oh, look, you've landed in Saigon. You're among the little people now. We represent the ARVN Army The ARVN Army Oh, no! Follow the Ho Chi Minh Trail. Follow the Ho Chi Minh Trail. "Oh, I'll get you, my pretty!" Oh, my God. It's the wicked witch of the north. It's Hanoi Hanna! "Now, little GI, you and your little 'tune-ooh By the time President Gerald R. Ford took office in 1974, the United States' involvement in the Vietnam War had been radically reduced. In 1975, however, renewed fighting saw communist-supported North Vietnamese forces pushing closer to Saigon, the capital of South Vietnam, which was still a U.S. ally. Saigon, later called Ho Chi Minh City, would soon fall to the North and the process of Vietnam Immigration Service: 👉 We are happy to inform that Nationals who are eligible for Vietnam e-visa (30 days, single entry) now can apply for an e-visa to visit Vietnam. 👉 No need for Covid Test from 15 May 2022 👉 No need for Medical Declaration anymore from 27 April 2022. 💚 💚 💚 Mostly. The Japanese occupied Vietnam during World War II but allowed the French to remain and exert some influence. At the war's end in August 1945, a power vacuum was created in Vietnam. Capitalizing on this, the Việt Minh launched the "August Revolution" across the country to seize government offices.Emperor Bảo Đại abdicated on August 25, 1945, ending the Nguyễn dynasty. Mũi Né, for water sports. Come to Mũi Né, in Southeast Vietnam, for the water sports; windsurfing, kitesurfing and sailing are often on the agenda for travellers. And, even if you aren't a morning person, it's well worth getting up early to see the sunrise at the sand dunes in Mũi Né. There are even concerns that Vientiane is willing to pay down Chinese debts using land transfers. Like in Cambodia, Laos is actively engaged in SEZ activities with China. Chinese firms have IWhZ4bI. Nearly 50 years since the end of the Vietnam War, and more than a quarter century since the normalization of relations, Vietnam is emerging as a rising power at the heart of the Indo-Pacific region and an increasingly important partner. Once one of the world’s poorest and most isolated countries, Vietnam is now a middle-income country with a dynamic, young population and a promising future. Since joining ASEAN in 1997, Vietnam has played a significant role in regional diplomacy and development. Vietnam’s foreign policy aims to act as a “friend and reliable partner of all countries in the international community.” Vietnam has established strategic partnerships with Japan, China, India, Russia and other countries. The United States and Vietnam agreed on a “comprehensive partnership” in 2013 that is strategic in all but name, including cooperation on economic, security, educational, cultural and war legacy issues. Vietnam’s policy of multiple partnerships has remained intact despite maritime security challenges in the East South China Sea and disputes over management of the Mekong River. Politically, Vietnam is a one-party state ruled by the Communist Party. The People’s Army of Vietnam has significant influence in the political system. Freedom of expression, opinion and speech are guaranteed in the constitution but not properly implemented in practice. Vietnam’s vibrant civil society and social media face increasing restrictions affecting both informal actors such as bloggers and legally registered nongovernmental organizations NGOs. Human rights remain a contentious issue in the relationship; however, both President Obama and President Trump assured Vietnamese leaders in the past that the United States respects Vietnam’s differing political system. The Vietnamese government won international recognition for its strict handling of the COVID-19 pandemic in its early stages. Although subsequent waves have been harder to control, Vietnam’s economy has continued to grow at the highest rate in Southeast Asia. Future challenges for the country include how to continue economic liberalization and societal opening while maintaining stability and a relatively low level of inequality. USIP’s War Legacies and Reconciliation Initiative The Institute of Peace engages in research and dialogue examining the extraordinary arc of relations. In August 2021, USIP launched a multiyear project to foster public education as well as government-to-government and people-to-people dialogue among Vietnamese and Americans. Addressing war legacies, including Agent Orange, unexploded bombs UXO and recovery of wartime remains, is an essential component of the wider work of building a strong bilateral partnership. USIP’s initiative stems from Congress’s landmark authorization in 2021 for the government to assist Vietnam in identifying its war dead, following decades of Vietnamese cooperation to help the United States conduct the fullest possible accounting of personnel. USIP’s project aims to further advance reconciliation, to sustain support for addressing war legacies and to highlight lessons from the experience that could apply elsewhere in the world. Events and Public Education USIP convenes virtual and in-person seminars featuring prominent speakers from the and Vietnam. Our experts also join events with partners around the United States to increase public awareness of the journey towards reconciliation and the ongoing importance of addressing war legacies. Facilitating Dialogue USIP convenes governmental and nongovernmental leaders in Track and Track 2 dialogues on war legacies and the partnership. Dialogues focus on specific issues or topics, such as Agent Orange remediation or veterans’ exchange. Additional dialogues are planned for students and young professionals from both countries, including Americans of Vietnamese descent. Media and Publications USIP supports video, social media, blogs and reports on topics related to war legacies and bilateral cooperation, enabling Americans and Vietnamese to speak in their own voices about their experiences of reconciliation. Publications advance USIP’s values of ending conflicts and rethinking engagement in Asia. Lloyd Austin and Vietnamese Defense Minister Phan Van GiangOn December 2, 2021, USIP hosted a public online event on “Learning from Cooperation on Wartime Remains Recovery How Vietnamese and Americans are Working Together to Account for Missing Personnel from the Vietnam War.” The event featured governmental and non-government speakers from both countries, including Defense POW/MIA Accounting Agency Director Kelly McKeague and Vietnamese Deputy Ambassador Hoang Thanh Nga. Related Publications While relations have progressed remarkably since the end of the Vietnam War, “we talk about reconciliation as a long-term process … so even though we’re now almost 50 years into the post-war period, that reconciliation process isn’t complete yet,” says USIP’s Andrew Wells-Dang. Type Podcast This winter marks 50 years since and Vietnamese diplomats in Paris ceremoniously signed “peace accords” that did not end the Vietnam War, but that achieved America’s withdrawal from it. Thus, the accords permitted, a half-century later, what is now a durable American-Vietnamese reconciliation. In the face of seemingly intractable wars — in Ukraine, Afghanistan, the eastern Congo basin, Yemen or elsewhere — the growing relationship shows that even a peace that seems impossible today can indeed be built for our children. Type Analysis and Commentary Reconciliation Fifty years ago, the accords led to the withdrawal of military forces from Vietnam, marking an important step toward a post-war settlement between the United States and Vietnam. Now, “There is a lot of cooperation on economic issues, education, security and on resolving the legacies of the war … we have a comprehensive partnership that is 10 years old,” says USIP’S Andrew Wells-Dang. Type Podcast Trong khi Chiến tranh Việt Nam đã lùi xa gần 50 năm 1975-2025, các gia đình Việt vẫn tiếp tục khắc khoải tìm kiếm hài cốt thân nhân nằm xuống trong cuộc chiến. Nỗ lực tìm kiếm này không chỉ giúp khép lại quá khứ, mà còn đóng vai trò quan trọng trong thúc đẩy tiến trình hòa giải, khắc phục hậu quả chiến tranh, và đưa câu chuyện quan hệ Hoa Kỳ-Việt Nam trở thành một điển hình về tính thực tiễn và khả năng xây dựng hòa bình thời hậu chiến. Tuy nhiên, năm tháng đi qua và tạo thêm nhiều thách thức, việc tìm kiếm hài cốt ngày càng trở nên khó khăn. Type Blog Reconciliation View All Publications Related Projects In 2021, the Institute of Peace launched a multiyear project to foster greater dialogue both in and between the United States and Vietnam on war legacy issues and reconciliation. This project stems from the Congress’s landmark 2021 authorization for the government to assist Vietnam in identifying its missing personnel, following decades of Vietnamese cooperation to help the United States conduct the fullest possible accounting of personnel. This project will support this bilateral initiative while also engaging in the work that remains to addresss legacies of war — including the continuing impacts of Agent Orange and unexploded ordnance — and to deepen reconciliation. View All ASEAN Beat Security Southeast Asia The South China Sea matters to Vietnam’s economic development, but its land borders are the key to its long-term security. The border gate between Vietnam and Laos at Lao Bao, Vietnam. Credit DepositphotosWhere should the focus of Vietnam’s national security strategy lie in an age of rising Chinese power? In 2019, Vietnam’s Ministry of National Defense released a defense white paper that put much emphasis on the South China Sea SCS. Vietnam made clear that it was unhappy with China’s destabilizing behaviors in the SCS, referencing its “actions to unilaterally impose based on force disregarding international laws and militarization activities that change the status quo, violate Vietnam’s sovereignty.” The white paper also cautioned that “great-power competition is getting increasingly tense, making the East Sea [SCS] become flashpoint’ at one point, which increases the risks of conflict.”Since the 1990s, the SCS has been the focus of Vietnam’s national security strategy, with the goal of constraining Chinese expansion. Indeed, the bulk of Vietnam’s military modernization efforts since the early 2000s has focused on the navy and air force in order to boost their ability to protect the country’s maritime interests in a context of high-tech warfare and growing uncertainty in the SCS. Scholars have also noted the importance of the SCS in the overall China-Vietnam relationship and the ways in which China’s rise has shifted the regional maritime balance of power with great implications for settling the SCS disputes in a peaceful such an emphasis on the SCS as the potential flashpoint of Vietnam’s future conflicts with China is misplaced for two reasons. First, China’s rise has shifted the power balance not only at sea but also on the land. Beijing’s attempts to woo Vietnam’s neighbors, Cambodia and Laos, with economic rewards are as dangerous to Hanoi as its destabilizing actions in the SCS. Second, such an emphasis cannot explain Hanoi’s shift to maritime security in the 1990s and overstates the importance of the SCS in its long-term strategic outlook at the expense of other more important priorities, such as the alignment of Cambodia and Laos. Vietnam’s post-Cold War reorientation toward the SCS is based on the premise that its land borders are already secured. But China’s moves to win Laos and Cambodia to its side should shift its focus back generally prioritize land security over maritime security, and only after they have secured their land borders do they look to the ocean. This is simply because it is costly to build and maintain an army and a navy at the same time, especially when the rival is a peer or a more powerful state. China only began to expand its maritime capabilities in the 1980s after its land borders were secured and it became the sole great power in mainland Northeast Asia, reducing its need for a large army. Even now, China has little fear for its land security, given that most of its neighbors are much weaker. In the case of India, the Himalayas serve as a natural buffer to prevent both sides from fighting a large war that can threaten China’s survival. Thanks to the favorable power balance on the land, Beijing has shifted its focus to the maritime domain to contest the United States’ maritime same thing can be said about Vietnam. Hanoi only looked to the sea in the 1990s after it had defeated South Vietnam, resolved its border conflicts and normalized relations with China, and addressed the security threats in Laos and Cambodia in the aftermath of the Third Indochina War. Hanoi’s protests against China’s occupations of the Paracel islands in 1974 and the Johnson South Reef in 1988 were weak for a good reason it was distracted by other more pressing security threats on land and it did not have the capability to field a strong army and navy at the same prioritization of land over the sea was understandable. Compared to mainland Indochina, the SCS lacks the strategic importance that matters to Vietnam’s survival. Both the Paracel and Spratly island groups are far from Vietnam’s shore, meaning that losing them, while harmful to Vietnam’s economic interests, does not hurt Vietnam’s survival in any way. Remarkably, South Vietnam’s loss of the Paracel islands in 1974 to China did not spell its doom – the North Vietnamese army was responsible for that – while Vietnam’s loss of Johnson South Reef to China in 1988 did not threaten Hanoi’s survival as much as China’s 1979 ground both China’s and Vietnam’s land features are too small to defend in the event of war. And apart from using them as a way to assert sovereignty, those features have limited military use without external maritime surveillance capability and have little impact on freedom of navigation. On the other hand, Hanoi is fully aware of the significance of Laos and Cambodia to its survival, which has been demonstrated by its use of the Ho Chi Minh Trail to launch attacks on South Vietnam and its ambition to keep the two countries under an Indochinese Federation and out of the orbit of other rivals after key point is that China now poses a comprehensive threat to Vietnam, on both land and sea, as it presses forward with its Belt and Road Initiative and militarization of islands in the South China Sea, as well as the modernization of its navy. As a weaker power, Vietnam has little choice but to adjust its calculations accordingly and prioritize wisely. China’s occupation of SCS features claimed by Vietnam does not offer it more leverage on land. However, China’s ability to attack Vietnam on land does offer it more leverage on the sea because the stakes are much higher for Vietnam’s security. And this suggests that Vietnam should look west for its has little hope in the east; it cannot fight and win a naval war against China because the maritime balance of power is heavily skewed against it no matter how much it spends on modernizing its navy and air force in the aftermath of major purchases from Russia. It also cannot expect the to come to its defense, given that Washington has maintained its neutrality with regard to the territorial disputes in the SCS and is not bound by a treaty to defend Vietnam, as in the case of the the balance of power on land works more in Vietnam’s favor and it is this that will determine its survival. Vietnam has experience fighting major ground wars against superior enemies and has a better chance of neutralizing China’s qualitative and quantitative military advantages than at sea. The war in Ukraine has shown that a small power can forestall a large power’s attacks by employing a porcupine strategy. Instead of deploying modern military equipment, Vietnam can simply procure cheap and mass-produced weapon systems that are easy to hide and use to significantly increase the costs of Chinese ground mountainous topography of northern Vietnam and Laos should also complement Hanoi’s “porcupine” strategy. During China’s invasion in 1979, Vietnam successfully relied on militia and special operatives, who used tunnels and jungle warfare to stop Chinese assaults along the border while the regular army waited behind the front line to confront the exhausted Chinese Vietnam to successfully deter China, it needs to ensure that China does not establish any military outposts in Laos and Cambodia that allow Beijing to launch a multi-front invasion in addition to the China-Vietnam border. This explains why Hanoi is wary of China’s involvement in the refurbishment of a naval base in Cambodia and Chinese investments in debt-crippled Laos. Sri Lanka accepting to host a Chinese research vessel despite India’s objections should caution Vietnam that Beijing can similarly leverage its economic power to security ends in Laos. Vietnam thus should put more effort into courting these two countries with economic rewards and political partners in the Quadrilateral Security Dialogue – the Australia, Japan, and India – should not only support its efforts to balance against China in the SCS but also in Laos and Cambodia. And the support does not have to be military. The Quad can provide economic and infrastructure support to weaken the appeal of China’s economic rewards, a task that Vietnam alone cannot achieve. Importantly, Vietnam needs to maintain good relations with China by committing to a diplomatic solution of the SCS disputes in line with international law. History has shown that if the overall Vietnam-China relationship is good, both sides will be willing to settle their disputes South China Sea surely matters to Vietnam’s economic development, but it will be Laos and Cambodia that determine its survival over the long term. And importantly, protecting Vietnam’s land security first and foremost is the best way for it to protect its sovereignty in the SCS. Continuing to balance against China at sea via naval and air force modernization is a step in the wrong direction if China increasingly poses a threat on land. Vietnam therefore needs to strengthen its army and put Laos and Cambodia back at the center of its national security strategy. A grand strategy for Vietnam should start with a simple question is Vietnam secure enough on land to expand to the sea? If China ever decides to test Vietnam on land, Hanoi should be able to pass the test, as it has successfully done so many times over the past 2,000 years. Powered by continued investments in its manufacturing sector, dynamic foreign direct investment, and rising productivity, Vietnam has been a consistent outperformer in Asia. GDP has increased at a compound annual rate of 5 percent in real terms over the past 20 years, which was times faster than the global Even in 2020, when the COVID-19 pandemic was causing deep disruption in the global economy, Vietnam posted GDP growth of The country continues battling the resurgence of COVID-19 cases and navigating through this crisis. However, consumption is expected to expand and define the future as incomes rise. Swift demographic and technological changes will result in trailblazing consumer behaviors that offer new sources of growth to companies informed and agile enough to capture them. In this article, we focus on how these trends are shaping the future of Vietnamese consumers and what companies can do to win their hearts. Vietnamese consumers enter the middle class and put midsize cities on the radar Asia is the world’s consumption growth engine miss Asia and you could miss half the global picture—a $10 trillion consumption growth opportunity over the next decade, according to recent McKinsey Global Institute research. Vietnam is well positioned to be a significant driver of the next chapter of Asia’s consumption story. Over the next decade, 36 million more consumers may join Vietnam’s consuming class, defined as consumers who spend at least $11 a day in purchasing power parity PPP This is a major change. In 2000, less than 10 percent of Vietnam’s population were members of the consuming class, which has risen to 40 percent today. By 2030, this figure may be close to 75 percent Exhibit 1. New consumption power is emerging not only from those who have entered the consuming class for the first time, but from the consuming class’s sharp rise within the income pyramid. The two highest tiers of the consuming class those spending $30 or more per day are growing the fastest and may account for 20 percent of Vietnam’s population by 2030. Urbanization is an important contributor to income growth. Vietnam’s urban population is projected to surge by 10 million over the next decade as the share of the country’s urban population rises from 37 percent in 2020 to 44 percent by Cities are likely to be Vietnam’s engine of growth, contributing roughly 90 percent of all consumption growth over the next The story of Vietnam’s urbanization has often been centered around the populous cities of Hanoi and Ho Chi Minh City HCMC, where each city is home to more than 10 million people and most of Vietnam’s middle However, our analysis finds that over the next decade, sources of urban consumption are likely to spread to smaller cities, including Can Tho, Da Nang, and Hai Phong, where the middle classes are set to grow. Five demographic shifts transforming the consuming class Although the rising consuming class and urbanization are large drivers of Vietnam’s growth, a new chapter is being written that goes beyond scale and rising incomes. Significant demographic change and the penetration of digital technologies are likely to reinforce the diversity of Vietnam’s consumer markets, prompting sometimes surprising changes in consumer preferences and behavior. To thrive in Vietnam’s consumer markets, companies will have to consider trends that reflect the country’s evolving socioeconomic realities and those that will influence consumption shrinking households, more spending by seniors, greater market participation by digital natives, economic empowerment of women, and wider geographic distribution of spending. Households are getting smaller Across Asia, households are shrinking. The size of the average Vietnamese household has decreased by around 20 percent over the past two decades, from people per household in 1999 to people per household in A large contributor of this change has been Vietnam’s declining total fertility rate, from births per woman during the 1995–2000 period to an estimated between 2015 and At the same time, new lifestyles and ways of working especially as women make continued progress in economic empowerment may lead to fewer multigenerational families living under one roof. This trend toward smaller households is reinforced by urbanization, for two reasons. Firstly, the total fertility rate in cities is even lower than in the country as a whole; for instance, the fertility rate in HCMC was around in 2020. Secondly, urban centers tend to attract young people who move away from their parents and extended families. If the experience of other Asian markets holds true in Vietnam, the declining size of households may lead to new types of demands, including smaller homes, increased ownership of pets, and new forms of entertainment. Seniors are accounting for an increasing share of consumption Vietnam remains a young country overall, with a median age of 32 in 2020. However, the number of people aged 60 and over is projected to increase by five million; seniors could account for more than 17 percent of Vietnam’s population by 2030. Spending by seniors is expected to triple in the next decade, growing at more than double the rate for the population as a whole during the same period. The expansion of relatively well-off seniors is likely to have significant impact on several sectors. For example, over the past decade, there has already been rapid growth of investments in healthcare. Local players, such as Vinmec, which runs hospitals, and Pharmacity, a retail pharmacy company founded in 2011, are growing rapidly. High-quality nursing homes are spreading, as well as assisted-living accommodations. Beyond healthcare, the housing market is seeing growth in real estate development that is increasingly focused on suburban areas where the air quality is better and there is more space for seniors and retirees. Digital natives are becoming an increasing force in Vietnam’s consumption So-called digital natives born between 1980 and 2012, including members of Generation Z and millennials, are expected to account for around 40 percent of Vietnam’s consumption by 2030. Members of this digitally savvy generation live online and on their mobiles. Almost 70 percent of Vietnam’s population in 2020 are internet users. Rapid digitization is changing the daily channels and communication methods used by Vietnamese people, particularly in e-commerce, where regional players, such as Shopee and Lazada, and local players, such as Tiki, are active. The rapid emergence of digital consumers has fueled innovation in retail and purchasing behavior. For example, local social network Zalo is among the most used applications in Vietnam, with 52 million monthly active users, and has become a significant marketing channel. An estimated 55 percent of Vietnamese Gen Zers now use TikTok, driving intense competition, as evidenced in the launch of YouTube shorts and Instagram reels. Social commerce sites, such as Mio, and live-streaming platforms are reinventing consumption methods by creating new channels that attract new and often younger shoppers to a category or a brand. These new behavioral trends have forced companies to rethink the allocation of their marketing budget. Marketers are realizing the increased importance and pervasiveness of online channels. In 2021, online ad spending is expected to hit almost $1 billion in Vietnam and to grow by about 22 percent a year until 2025. Women’s economic empowerment presents a large opportunity Vietnam has historically been ahead of other countries on women’s participation in the labor force. In 2019, Vietnam’s ratio of female-to-male labor-force participation was 88 percent, one of the highest in the Vietnamese consumers are accustomed to seeing female executives in leading roles at large Vietnamese companies, including PNJ, Sovico, Vinamilk, and Vingroup. Other forms of empowerment—including increased financial and digital inclusion, opportunities to raise skills and therefore transition into higher-income jobs, and a greater say in household purchasing decisions—could unleash even more female consumption. According to MGI research on the estimated GDP growth potential from narrowing gender gaps, women’s empowerment could add an additional $80 billion to Vietnam’s GDP in the period to 2030. The rise of the small-city and suburban consumers Consumption power has become more distributed over the past decade. While consumption had largely resided in the nation’s two major economic and financial hubs, Hanoi and HCMC, other cities are also developing into economic forces. In 2020, Hanoi and HCMC accounted for 37 percent of all Vietnamese households with income of more than $22,000 a year in 2011 PPP terms, but this share could drop to 31 percent in 2030 Exhibit 2. Our analysis notes that growth in the number of middle-class households in smaller cities and even rural areas is outpacing those in Hanoi and HCMC—a compound annual rate of about 8 percent, compared with 5 Moreover, the Mekong and Red River Deltas, densely populated but not fully urbanized, are becoming significant consumption pools, attracting the attention of consumer-goods companies and modern retailers. Behavioral shifts modernizing and diversifying the consumer environment Beyond demographic shifts, Vietnam’s consumer markets are experiencing significant changes in behaviors as incomes rise and as innovation in business models and technology accelerates. Five shifts are notable digitization’s impact on distribution channels, increasing use of consumer-facing ecosystems, a growing preference for domestic brands, greater interest in “conscious lifestyle” products, and a lessening of geographic differentiation. New channel mix In most consumer markets, traditional grocery stores are being replaced by modern stores, especially supermarkets and convenience stores larger hypermarket formats are still present but growing less rapidly. But in Vietnam, beyond the traditional narrative of retail modernization, digitization is rapidly changing the way Vietnamese shop. As in several other Asian markets, leapfrogging in two arenas are under way. First, e-commerce is developing so rapidly that it is conceivably bypassing the usual development from traditional to modern store-based retail. By 2025, e-commerce in Vietnam could be almost as large as offline modern grocery Second, traditional trade is digitizing rapidly too. Vietnam has more than 680,000 offline outlets selling basic food and fast-moving consumer goods FCMG. Local players like Telio and Vinshop are offering digital ordering and digital payments options to these traditional food and FMCG outlets. As those digital players gradually compete with traditional business-to-business B2B players such as wholesalers and cash-and-carry stores, traditional trade can become increasingly connected. The process could disintermediate traditional distributors and wholesalers, which could lead to greater efficiency. A big convergence Consumer demand is being reshaped by a “big convergence” in which digital ecosystems are aggregating many consumer needs and serving them with varying degrees of integration. At the most integrated end of the spectrum are super apps, which offer a one-stop digital shop for customers through multiple uses, functions and complementary services. As consumer-facing ecosystems have emerged and grown rapidly, players in consumer packaged goods CPGs and retail have had to rethink their stance on partnerships. There is still headroom for growth in Vietnam’s digital ecosystems. In many economies around the world, the disruption associated with the COVID-19 pandemic accelerated digital adoption across categories, including in groceries, entertainment, digital healthcare, real estate, and education. This acceleration is evident in Vietnam. From online school classes to food ordering, Vietnamese consumers have increased the pace of their digital adoption and use. One study found that 41 percent of all digital consumers in Vietnam are new consumers, and 91 percent of these new consumers said they intend to continue their use of digital tools after the pandemic. Greater preference for homegrown brands Asian brands are maintaining a strong position in many consumer-facing categories across Asia, including in Vietnam. In FMCG, for instance, Asian brands increased revenue at 9 percent a year, compared with 5 percent for global non-Asian Conventional wisdom has held that the emerging middle class in Asia tends to favor buying global Western brands, but this does not hold true—or at least not in every category. Local players have built successful brands in Vietnam, including VinFast in the automotive sector and Masan, Nutifood, and Vinamilk in FMCG. Local players have also been successful in modern retail. Foreign retailers were amongst the pioneers of modern trade in Vietnam, but most of the fastest-growing brands of retail chains today are local players, such as Bach Hoa Xanh, Coop Mart, and VinMart. Conscious lifestyle choices Consumer lifestyle and behaviors that take into consideration other people, the environment, and society are often associated with more developed economies. However, surveys suggest that many Vietnamese consumers are emulating this behavior. Reusable straws and mugs in coffee shops, tote bags at supermarkets, and eco-friendly fashion brands are now common sights in cities throughout Vietnam. In one consumer survey, 91 percent of Vietnamese respondents said they were aware of and were participating in a conscious lifestyle. In contrast, 86 percent of respondents in Indonesia, 73 percent in Thailand, and 75 percent in Malaysia said the same. Notably, 84 percent of Vietnamese respondents said they were willing to pay a premium for conscious-lifestyle products. This suggests potential for premiumization in the market. Of course, what consumers say may not predict what they actually do. Indeed, there is ample evidence that willingness to pay premiums for eco-conscious products is not yet sufficient in most Asian markets. Nevertheless, Vietnamese consumers are clearly paying more attention to sustainability, social responsibility, and labor conditions, and many are willing to take action through their wallets. Less emphasis on geographic differentiation, including the traditional north–south divide Vietnam has a very distinct geography and history. It has two large cities of roughly equal size, separated by more than 1,100 kilometers. These cities are Vietnam’s largest consumption centers but have very different climates and therefore different fashion and histories, leading to significant variations in consumer behavior and preferences. Therefore, the traditional marketing approach was to deploy tailored communications to reach the specific preferences of customers in the north, south, and cities in between. Such large differences in the consumer landscape within Vietnam could be a hurdle for brands, especially those of players who are unfamiliar with local context. Paradoxically, however, while Vietnamese consumers are segmenting and diversifying, cultural differentiation by geography appears to be diminishing. Domestic travel is increasing and connecting Vietnam more than ever before. The flight route from Hanoi to HCMC is the second busiest in the world, with close to a million seats. Consumers across the country’s regions are becoming more affluent. Digital media are harmonizing brand communication; brands that have established a regional stronghold are now capturing other regional markets. In short, different parts of the country and different types of consumers are converging. A telling example of this convergence is the beer industry. In 2015, brands distributed nationally without a local stronghold had about 32 percent of economy-wide volume, with 37 percent for brands focused on the south, such as Saigon Beer, and 24 percent for northern or central-focused brands such as Hanoi Beer or Carlsberg’s portfolio. However, by 2020, the share of national brands had risen to about 40 percent, while the share of northern and central brands had Thus, even as Vietnam’s consumer market is diversifying, geographical stereotypes about Vietnamese consumers could become obsolete. Implications for companies wooing Vietnam’s consumers Vietnam’s consumer markets are changing rapidly—diversifying, modernizing, and digitizing. Companies can find considerable momentum to tap into, but to position themselves in a way that can win the hearts and minds of Vietnamese consumers, they need to answer questions about which markets to enter, how to communicate with consumers, and how to maintain a combination of localization and agility. Where to play? Companies in Vietnam need to take a broader view of where to compete than sufficed in the past. Success today requires moving beyond the two-city approach and considering new channels in light of changing technology. In more than two cities. Except in a few sectors such as high-end luxury, the era of focusing exclusively on Hanoi and HCMC is over. Competitive local consumer-facing industries are already pursuing rural consumers over a broad geographic area. Companies that have confined themselves to serving consumers in Vietnam’s two leading cities will need to broaden their approach. To reach around 50 percent of the population with incomes of more than $22,000 per year, companies typically need to plan distribution to the top 15 cities. Major retail players are seeking to capture new opportunities by investing not only in key cities but also in a broad swath of nonurban areas whose overall population is large Exhibit 3. In more than traditional channels. Companies in Vietnam also should take a flexible distribution approach to embrace the changes occurring in channel mix. Vietnam’s hybrid and fast-changing channel mix will pose challenges. Companies need to be agile in positioning themselves for a combination of a large share of fragmented traditional trade, a rapidly growing but still unpredictable online B2B sector, a constantly recomposing modern retail landscape, and relatively new e-commerce that is one of the fastest growing in Southeast Asia. In this context, competing in Vietnam requires not only the right strategy, but also capabilities in channel management, key account management, pricing, and promotions optimization. How to communicate with Vietnam’s new consumers? Businesses that succeed in Vietnam will have to upgrade their messages and channels of communication to reach today’s consumers. More often than not, this involves digital channels, as well as an awareness of new norms and values. Double down on digital engagement. Vietnamese consumers across age groups and regions are digitally connected. While online retail is just taking off, marketing and brands will need to make full use of social media, user reviews, social commerce, live streams, and online ecosystems to gain early traction. Build relatable brands with a conscience and, if possible, a local vibe. Vietnamese consumers are adopting the kind of conscious consumption that is more prevalent in economies further down their development path. To capture their attention and their wallet, companies may consider localizing brands that “fit” the new zeitgeist. Approaches that could make brands relatable include using icons and champions of local culture and designing products that focus on local heritage. To some extent, Asian rather than Vietnamese brand image and ambassadors have also sometimes proven suitable; some brands recruit Korean and Japanese ambassadors with a local audience. Importantly, adopting the norms and values of the modern, socially conscious consumer is a must. How to operate? Talent localization and agility have become critical. In the face of rapid change, companies in Vietnam will also likely need to reinvent their operating models around four axioms Recruit, train, and promote local talent. Talent management grows in importance as capabilities needed to compete become increasingly complex for example, to digitize businesses. Update the operating model. Shape an operating model that favors the speed of local innovation and personalization, in response to the fast development of Vietnamese consumers’ behavior. Reallocate resources rapidly. As conditions in the market change, companies need to move resources rapidly between product lines or distribution channels. Build the ability to enter cross-sector partnerships. In an increasingly interconnected world, such partnerships are likely to become a source of performance. In short, beyond building an effective entry strategy, companies will need to double down on forming more robust Vietnamese organizations to compete successfully. Vietnam’s dynamic consumer markets have had strong momentum for a while, and they are now becoming more complex. The consuming class is diversifying geographically, socially, demographically, and technologically. As consumers become more diverse and demanding, companies wishing to serve them will need to refine their strategy to take account not only of income levels, but also of new channels, strategy, marketing allocation, and behavior even within their established customer bases. Download the article in Vietnamese PDF-10 pages.

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