The Vietnam economy and its best marketing strategies
for the 2020s.

Vietnam’s GDP per capita prediction in the 2020s

A dive into the Vietnamese economy

The Vietnam economy is developing at a rapid pace in recent years along with its significant rise in digital needs.This article provides concrete facts as to why this Southeast Asian country is a good choice for foreign investors.It explains ways and means of how to scale a business in Vietnam and what digital marketing solutions are the go-to options to effectively target this unique market.

Vietnam today in numbers

Vietnam GDP is recorded at around $245 billion in 2018 and with a steady growth rate of 6.6%. The country is listed as the world’s 35th economy. 60% of total consumer expenditure is related to housing, food and transportation.

Vietnam welcomed 26,000 foreign direct investment (FDI) projects totaling to $35 billion US dollars with implemented capital of $19 billion in 2018. Moreover, 131,000 new businesses were established in the private sector including automobiles manufacturers.

In 2019, Vietnam registered an all-time trade turnover of $500 billion. In the World Bank’s Doing business report, the Southeast Asian country placed 69th out of 190 countries on the ease of doing business score.

Population and consumer profile

The population of Vietnam has risen drastically over the past 10 years. In the latest census of 2018, the number of citizens was recorded at about 95.5 million people. Almost half (46%) is made up of people under their 30s.

The population of Vietnam has risen drastically over the past 10 years. In the latest census of 2018, the number of citizens was recorded at about 95.5 million people. Almost half (46%) is made up of people under their 30s.[divider 

Vietnam population

The government welcomes foreign investments

Vietnam has opened its doors to foreign investors when it became a member of the World Trade Organisation (WHO) in 2007.
Organisations or individuals can operate a venture in any industry of their choosing and build the business structure in any way they want as long as it is compliant with Vietnamese law.

Even though urban residents are only one third of the population, their expenditure accounts for the rest 42% of the expenditure. Therefore, the average spending of a Vietnamese living in a city is higher than a rural dweller.

Vietnam’s GDP per capita prediction in the 2020s

Vietnam economic outlook in the 2020s

In May 2019, a study by Madhur Jha, Standard Chartered’s India-based head of thematic research, predicted that Vietnam will benefit from a growth rate of 7% during the 2020s.
This means the country’s capital income will increase from the current $2,500 to 10,400 by 2030. 

The Vietnam Dong

The Dong has been Vietnam’s currency since May 3, 1978. Looking at a forex aspect, the currency is currently not free-floating as the financial market is not yet fully developed.

In May 2019, a study by Madhur Jha, Standard Chartered’s India-based head of thematic research, predicted that Vietnam will benefit from a growth rate of 7% during the 2020s.
This means the country’s capital income will increase from the current $2,500 to 10,400 by 2030.

Bui Quoc Dung, head of the State Bank of Vietnam (SBV)’s Monetary Policy Department stated that the current fixed exchange mechanism “allows Vietnam to adjust the exchange rate according to changes in major partners’ currencies to ensure the competitiveness of Vietnamese products in the international market. At the same time, the current mechanism will prevent extreme movements in the exchange rate, creating favorable conditions for companies in their production and business activities.”

Shifts in the modern consumer behavior

Online and traditional shopping

Shopping malls and supermarkets are becoming more popular around the cities, however, the older Vietnamese generation is still inclined to shop at traditional wet markets and family run shops. These types of store provide a personal shopping experience and allow relationships to form between the buyer and the owner.

ECommerce is becoming more popular and more profiting in recent years. A survey conducted by Vietnam eCommerce Association found that some buyers are still hesitant to make an online purchase and 80% of online transactions are still paid with cash on delivery so they can check the goods before paying.

Vietnam eCommerce market is expected to hit $13 billion USD in 2020. 79% of online shoppers use mobile apps. Major platforms are Lazada, Tiki, Shopee and Sendo.
Environmentally friendly products see a dramatic increase in sales as the population has become more concerned about the domestic pollution. Paper straws, electric scooters, and plastic alternatives have been introduced and widely accepted in 2019

Vietnam wet market

Perception of the locals on goods quality and branded items

The overall economy is rocketing, so are the locals’ income level and living standard. Vietnamese are price sensitive consumers but are recently becoming more quality conscious as they are in search of value-for-money products.

Environmentally friendly products see a dramatic increase in sales as the population has become more concerned about the domestic pollution. Paper straws, electric scooters, and plastic alternatives have been introduced and widely accepted in 2019.

The middle-class and high-come class often shop at international outlets and seek branded items, as these products are deemed to be of superior quality and prestige.

Vietnam Shopping Mall

The increasing trends of smartphones

Telecommunication services are more widely available and the broadband will be improved to 5G coverage soon. Vietnamese are shifting away from TV and towards mobiles due to their on-the-go lifestyle.
A research conducted by Vietnam Net in January 2018, found that 67% of the population has access to the internet on their phone. Out of 130 million phones registered in Vietnam, 32 million are smartphones. 85% of these users are between the ages of 15 and 49.

The middle-class and high-come class often shop at international outlets and seek branded items, as these products are deemed to be of superior quality and prestige.

The average user spends 2 hours on the phone every day. The main activities involve social media, game apps and product searches. Mobile advertisings are encouraged to improve sales for the Vietnamese B2B and B2C markets.

Vietnamese girl on a smartphone

Growing a business in Vietnam

Why choose Vietnam?

Vietnam has signed 13 free trade agreements (FTAs) that support regional and global supply, and expand its export markets.
The average user spends 2 hours on the phone every day. The main activities involve social media, game apps and product searches. Mobile advertisings are encouraged to improve sales for the Vietnamese B2B and B2C markets.

The government is developing socio-political and macro-economic stability. It is also implementing substantial reforms to address sustainable development and environmental impact.
Vietnam’s location makes it a strategic position for investors who want to diversify their supply chain from China.

Vietnam infographic

Investment opportunities in different sectors

Due to its rich and fertile land, the country sustains itself with natural resources. Their production focus is on rice, textiles, tobacco and chemical goods. Vietnam is the second largest exporter of rice, and the number 1 producer of cashew nuts.
The majority of FDI funds are poured into agriculture and manufacturing to utilize its export advantages.
There are, however, great opportunities for foreign investors to offer goods and professional services that domestic companies do not have. These include high-tech industries, financial services, logistics, cosmetics, furniture and real estate.

The government offers attractive tax incentives to encourage FDI in non-polluting businesses and value-added services. As Vietnam’s energy demand is growing, a need arises to reduce fossil fuel consumption, and invest in other forms of renewable energy such as solar and wind energy.
Tourism is another booming sector, with 2019 recording the highest number of international visitors at 18 million. Investing in the entertainment industry or launching a new restaurant, bar or hotel will deem profitable in a few years.

The government offers attractive tax incentives to encourage FDI in non-polluting businesses and value-added services. As Vietnam’s energy demand is growing, a need arises to reduce fossil fuel consumption, and invest in other forms of renewable energy such as solar and wind energy.

Tourism is another booming sector, with 2019 recording the highest number of international visitors at 18 million. Investing in the entertainment industry or launching a new restaurant, bar or hotel will deem profitable in a few years.

Partnership with a local agency

Industry research, market entry tactics, local knowledge and strong marketing strategies are critical to retailers and professional service providers, especially for foreign companies.
A perfect example set by Grab is creatively adopting the on-demand motorbike services. They efficiently employed the population’s preference of the scooter and its cost leverage.

Grab usage Vietnam

To reduce unseen risks and secure a steady revenue in Vietnam, it is strongly suggested to employ an experienced Vietnamese partner to advise on your growth strategies.
On Digitals has got you covered. We are an experienced digital marketing agency with a spark of creativity. We specialize in search engine optimization (SEO) tactics, Paid-per-click (PPC) campaigns, social media management and website/eCommerce development.
We will provide a tailored digital solution along with business consultation for your business for your niche in Vietnam. Come and visit us at 75 Ho Hao Hon street, District 1.

Targeting Vietnamese consumers and companies with digital marketing

Local social media best practices and tactics

57 million smartphone users in Vietnam are on social media, the most common ones are Zalo, Facebook, TikTok, and Instagram. Zalo is the most popular messaging app, superseding Facebook messenger.
The younger generation prefers Zalo, Instagram and Facebook while the older one is on Yahoo and Viber. The majority of Vietnamese Instagram users speak English while this is not always the case for Facebook and Zalo users.

Facebook and Zalo are better suited for lead generation and product sales while Tiktok is more for brand awareness. Use the former if you would like to market fashion, consumer products, lifestyle, or food, and use the latter for sports, gaming, and media. Instagram works well for personal care and cosmetics products.

LinkedIn is not yet popular in Vietnam, however, it is becoming more well-known. This B2B platform allows you to target Vietnamese expats or international companies based in Vietnam to secure contracts of larger value. The majority of local users who are on LinkedIn speak fluent English.

Social media Vietnam

Allow users to buy directly on the platform, do not direct them to your website as they are more likely to get lost.

If someone contacts you via chat platforms, respond to them as soon as possible. Vietnamese like to build relationships with the seller before making a purchase.

Write content that clicks the locals’ sentiment. Make sure you understand their culture and combine your social media marketing strategies with the local holidays and traditions.

The local readers are in favor of long articles so include a lot of details and explanations. Don’t hesitate to include emoji’s in your text, they make the copy more appealing.

Do not create visuals that look like ads, try and be as authentic as possible. Make good use of Vietnamese and English hashtags.

Vietnamese traidition

Utilize Search Engine Optimization (SEO) and Google Adwords (PPC)

Vietnamese rely heavily on Google to search for information. There are millions of searches per day. They search for information at university, at work or while waiting for a bus.
Search Engine Optimization displays your website on Google’s top search results when users search for relevant keywords. It is not required to pay Google and your website will be displayed 24/7 upon campaign completion.

The local readers are in favor of long articles so include a lot of details and explanations. Don\’t hesitate to include emoji’s in your text, they make the copy more appealing.

Do not create visuals that look like ads, try and be as authentic as possible. Make good use of Vietnamese and English hashtags.


Visually stunning and mobile-friendly websites

Conclusion

Once a small economy in ASEAN, Vietnam has now integrated with international economy and achieved impressive economic and social standards. It is an attractive market for foreign investors, especially in the ICT sectors and real estate.
As the young generation moves into the digital age, companies need to adapt their marketing strategies based on their use of social media and best local SEO practices. If you need any help with this, speak to On Digitals.