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Economic Sector

Last updated: Thursday, August 17, 2017

 

Consumer Demand for Organic Products: On the Rise

Posted: Thursday, April 27, 2017


Green branding strategy has become a central issue in the framework of the Vietnam National Brand Programme, a long-term trade promotion programme backed by the Government of Vietnam and aimed at promoting the image of Vietnam as a nation with high reputation for diversified high quality goods and services; and enhancing the awareness of domestic and foreign distributors and consumers in Vietnamese enterprises and products.

Mr Do Kim Lang, Deputy Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said, “The purpose of the programme is to create opportunities to drive Vietnamese brands towards green growth to shape a green economy for the country”. Green quality is also a ‘soft weapon’ for a brand to win.
Ms Dang Thuy Ha, Director of Consumer Behaviour Research, Nielsen Vietnam Company, said, businesses need to build consumer trust in their brands through commitments to social and environmental responsibility; always place health at the heart of product development to provide customers with a focused strategy on product development in couple with sustainability commitments.

According to research results collected by Nielsen Vietnam Company, “green” and “clean” brands have high growth of about 4 per cent. For example, the food and beverage industry has seen a higher growth than the market by an average of 2.5 - 11.4 per cent. Consumers are paying increasing attention to healthier and environmentally-friendly products. Up to 80 per cent of Vietnamese consumers are willing to pay more to buy products with ingredients friendly to the environment, branded “green” and “clean”.

More specifically, Vietnamese are more concerned about reduced water supply, environmental sustainability and products made from sustainable sources. Top five factors that affect the purchasing decision of Vietnamese consumers are good for health (77 per cent); organic and natural (77 per cent); brand trusted (75 per cent); environmental-friendly (62 per cent); and committed to social values (61 per cent). In particular, consumers want to use products with sustainability commitments. Specifically, 24 per cent of consumers want more environment -friendly products on the market while 37 per cent want more products with commitments to social values.
A representative from the Institute for Brand and Competitiveness Strategy (BCSI) said pointed out some existing hardships and challenges in developing green brands in Vietnam, such as the conflict of profitability and green growth. In Vietnam, most companies are small and medium-scaled and they typically lack investment capital for green product development. Technology is also an issue. Green technology is popular in the world but its application in Vietnam is still somewhat limited. Companies can transfer modern green technologies but people sometimes lack qualifications and competences to use them well.

One of immediate solutions recommended by the Vietnam Trade Promotion Agency (Vietrade) is supporting businesses to develop green branding strategies and accelerating the green labelling programme. At the same time, it is important to build criteria for priority products on the market and raise the awareness of the Vietnam Green Label Programme. In particular, promoting the mutual recognition of Green Labels with other countries will help enterprises to access and expand markets.

Huong Giang

 








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