Vietnam’s Vingroup takes on Asia’s giants

VIETNAM'S TOP LOCAL BRANDS

Vingroup has quickly risen the ranks in Vietam's top local brands as it looks to grow its dominance both at home and abroad.

Predominantly a real estate company, Vingroup—controlled by Vietnam’s richest man and its first billionaire, Pham Nhat Vuong—has been rapidly growing its portfolio over the last few years, and now operates 48 subsidiaries across auto, retail, education, healthcare and more. In December last year it began selling smartphones for the first time, under the brand Vsmart, and has outlined large-scale plans to grow its share in this market.

As a result, Vingroup climbed 19 places in Vietnam’s top local brands this year, to sit confidently at the number four slot, overtaking Viettel (5), the country’s largest mobile network operator, which fell two places.

“Vingroup has been aggressively expanding in Vietnam, moving from hospitality to housing, healthcare and education industries. As expected, it is now in the top 10 list,” explains Essence VP of product APAC Chandler Nguyen.

Vingroup is still behind Samsung and Apple, the first and third "local" brands in the list (the survey question asks people to name the best local brands, but allows any answer, so international brands tend to get named). However, Vingroup's ambitious plan to become Vietnam’s first globally recognised smartphone brand could see this change.

While it only entered the smartphone market last year, the company has plans to lift its annual capacity to 125 million units by next year by building a new factory, according to Nikkei Asian Review, which is 25x its current 5 million units per year output.

The conglomerate’s growth is underpinned by favourable government regulations and the patriotism it elicits in local consumers, according to MullenLowe Mishra president and chief executive Saby Mishra.

“Vietnam’s communist government is rewriting regulations in areas such as autos and pharmaceuticals trying to promote local companies such as Vingroup after years in which its economy was dominated by foreign competitors like Samsung,” Mishra says.

“Several rising Vietnamese consumer facing companies are innovating and serving local taste uniquely, at scale and driving the Vietnam pride factor. With its made-in-Vietnam cars/retail/real estate/resorts story, Vingroup is a signal of that trend.”

Mishra says local brands like Vingroup can offer quality products at good value, can serve local tastes better than international brands, and have “tremendous distribution” and execution in rural Vietnam which is around 68% of market.

Vingroup enjoyed the most substantial boost of Vietnam’s local brands, followed by Hao Hao Noodles (14), which rose 11 places. Dairy company Vinamilk retained the number two slot, while Hanoi Beer (9) moved up one place.

But not all Vietnamese brands were successes in this year’s top local brands list—Vietnam Airlines (23) was down eight places, from 15 to 23, while several local brands did not feature on the list. This includes supermarket brand Co.op Mart (22 in 2018), appliance manufacturer Sunhouse (24), Saigon Beer (28), Ba Vi (30), Mobifone (31) and Ben Tre coconut candy (34). New Vietnamese brands include VNexpress (29), Vinasun Taxi (30), Hanoi Beer (35), Vinmart (37), Vinfast (39) and Vmart (41).
 

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