The present fluctuations in the world economy have made a significant impact on the Vietnam market. In the past year alone, the economic recession and high inflation have resulted in escalating business costs; these include labor, fuel, and logistics.
However, from a positive perspective, there are still many opportunities for businesses in Vietnam. With an increasing GDP growth forecasted to reach 6.5 percent in 2023, the rise in population income, and consumer demand continuing with an upward trend, this is the right time for businesses to invest in bringing their business forward.
Businesses, especially foreign direct investment companies, must recognize the importance of investment to create added value. In markets with distinct regional differences, such as North, Central, and South Vietnam, localization needs to be implemented intensively.
In each region, it is necessary to have local people who can meet the different requirements of customers. For instance, DKSH has achieved strong market penetration and healthy growth despite the challenging COVID-19 conditions in the past two years due to our in-depth understanding of the local market.
To anticipate similar challenges ahead, businesses need to have a solid business model that allows the company to be flexible while minimizing risk. By continuing to invest in digitalization, businesses can identify opportunities to invest and obtain the best results in the consumer goods industry. Companies that optimize their operating models will gain crucial competitive advantages.
The strategy of glocalization is the key to business success especially in today’s demanding market situation. As companies increasingly demand a higher level of local market understanding, this is something that many multinational companies struggle with in Vietnam.
From the perspective of a global enterprise, businesses often want to apply a standardized operation model groupwide. However, in Vietnam, consumers and local cultures are different, and businesses must find a way to reconcile global and local factors to best serve their customers.
Working with the right business partner is important as an experienced partner will help implement the right services standard based on having detailed local market insights, creating the right development orientation for each different market.
Glocalization also helps bring value to the growth and sustainable development of businesses, markets, and local communities. When working together with a business partner, it is essential to consider the existing capacity of both sides and the added value each will provide before collaborating.
A good example of this is DKSH’s success in collaborating with Sanofi to create a localized Lactacyd product range, which saw the company chalking up increased sales over 20 times in the past decade.
As Vietnam continues to offer vast opportunities for businesses in the consumer goods industry, the glocalization strategy will provide an important competitive advantage. To help businesses achieve this, DKSH focuses on developing and strengthening capabilities reliably and responsibly.
Reach out to better understand these opportunities and how your business can better balance risks and capitalize on the growing market demand for consumer goods products and services in Vietnam.
Kim Le Huy is the Vice President, Business Unit Consumer Health for DKSH Vietnam. He has more than 18 years of experience working in the consumer goods sector across various Southeast Asia markets. Since joining DKSH in 2020, his vast exposure to the international business environment has further strengthened DKSH’s Consumer Goods presence in Vietnam.