At the webminar Market Focus Vietnam organized recently by Geneva Chamber of Commerce, Industry and Services (CCIG) and Swiss-Vietnamese Business Gateway (SVBG), in partnership with the Embassy of Vietnam in Switzerland and Schifferli & Associés, the panelists have given out many good points of Vietnam’s business environment and the reasons why Vietnam should be considered as the good destination for Swiss investors.
What is more, the Supply Chain Director of Nestle Vietnam - Will Mackerth also told the story of Vietnamese consumer trends in the past Covid-19 pandemic year. Following is Will Mackerth’s speech at the webminar.
“I have been the supply chain manager for the past 6 years. Today I would like to talk about the marketplace for fast consumer goods in Vietnam, consumption trends, localization and sustainability and how international and multinational businesses have strived in Vietnam and created values.
We started our business in Vietnam from the late 1990s, first with the water joint venture called La Vie and followed by food and beverage business in 1995. We grow since then to 3,200 employees in the food and beverage business and more than 630 in the water business. We have 4 food and beverage factories and two water factories supported, 80% of the products we produce here for domestic market and 20% for exports. We have number of brands you may recognize”, Will Mackerth recalled.
Nestle’s supply chain director revealed that: “Our capital investment so far is 650 million dollars and around 70% of our materials and packaging are purchased locally so we are very much embedded in the local business. Domestically, Vietnam is still primarily traditional trade marketplace so we partnership with local distributors, web markets and small retailer outlets. In terms of understanding this marketplace, we work with partners to build the picture of elvolving consumer trends”.
According to Will Mackerth, the Covid-19 pandemic has resulted on a strong focus on health but also food safety remains strong priority for consumers. As a result, authenticity and originality becomes very important. Convenience has long been a key factor of Vietnamese consumers. Nestle products here range towards convenience products like drinks, complementary products. The pandemic has economically workers in Vietnam reduced hours and smaller incomes. The choices are now seem improving, people are mindful of what they spend.
“We are looking around here the trend of e-commerce, digitalization and the use of automation. E-commerce is still very small when compared to other parts in the world. The growth trend is strong and delivery apps and other integrated solutions are having big impacts through the pandemic.
This area will outgrow other market segments over the next few years. Consumers desire for new experience remain strong but it has to adapt to the contraints of the past twelve months. Lockdown has shifted consumption from outdoor to mobile phone delivery in the cities but the rural areas in the country has been less impacted. And we must remember that 65% of Vietnam’s population is still rurally based.
Vietnam has been a tech savvy population, a fine smartphone ownership and an excellent 3G coverage nationwide. Users are active browsers of YouTube and Facebook and numerous digital solutions and this continues towards new home grown names like Zalo and Momo.
These apps combine both entertainment and purchasing opportunities. You see a lot of crossovers between these trends. We have three priorities, first we must continue to innovate, secondly we digitalize all aspects of our business end to end all and try to bring data and digital information all consumers and customers into the business. Sustainability is our third priority.
Adapting Nestle international business into local business in Vietnam mainly focus on nutrition deficiencies. And we pride ourselves into providing those kinds of products.”, Will Mackerth shared.