Brands Must Be Considered Competitive Weapon

10:00:13 AM | 23/11/2020

The economies of Vietnam and the world will be affected by political trends, population aging trends, Industry 4.0, and increased regional connectivity in the coming years. In addition, climate change and environmental pollution are increasingly serious. Therefore, it is extremely important for small businesses to use brands as a competitive weapon and to change the approach to this matter.

Mr. Vu Xuan Truong from the Institute for Brand and Competitiveness Strategy said that Vietnam currently has about 500,000 small and medium-sized enterprises (SMEs), of which 90% are small. Previously, smallholding businesses did not pay attention to strategic vision because they just managed to live from hand to mouth. However, this thinking has changed in the past 3-5 years.

Businesses therefore must use brands as a competitive weapon and change their approach to this matter, he said. They also need to change leadership outlooks on corporate governance and see each employee as an expression of brand.

Notably, the Covid-19 pandemic broke out in early 2020 and infections quickly reached more than 200 countries, leaving a heavy impact on the economy and society around the world, including Vietnam. The Covid-19 pandemic has disrupted input supply chains and output consumption markets. It seriously wrecked the tourism industry and even triggered a global economic crisis.

Therefore, branding strategies for businesses in an open market context, especially at the back of changed consumer behaviors due to Covid-19, should be very focused. Accordingly, products related to health, associated with environmental protection and sustainable development, are expected to prevail in the future.

In addition, before the above impacts, adopting digital transformation and promoting strengths of the digital economy and e-commerce are inevitable trends. According to Ms. Nguyen Thi Minh Huyen, Deputy Director of the Department of E-Commerce and Digital Economy under the Ministry of Industry and Trade, Vietnam has great potential for developing the digital economy. The size of Vietnam's digital economy ranks second in Southeast Asia, just after Indonesia. E-commerce - an important component of the digital economy - grew by over 25% in the past time and will continue to grow in the next five years. Vietnam's digital economy in 2019 was valued at US$10.8 billion, expanding by 38%, as 66% of the people have access to the internet. In 2019, online shoppers reached 44.8 million, with each spending US$225 on average. Besides, online travel, online media and online vehicle booking are consumer technology trends. This is an opportunity for digital economic development, especially in the context of the Covid-19 pandemic. This is the best direction for businesses in Vietnam.

However, the biggest challenge for businesses today is human resources equipped with digital skills, she said. According to statistics, Vietnam has 53.1 million workers, of which 76% have no professional qualifications, 5% have been trained for three months or more, 4% complete intermediate education, 4% have college degrees, and 11% have university degrees or higher.

In 2020, Vietnam lacks about 500,000 data scientists; rural students lack job opportunities and have lower life quality due to limited access to digital skills education; the mismatch of theory training and practical skills, teamwork skills and innovations of Vietnam's workforce need to be enhanced; and unskilled workforce also faces a high risk of being replaced by automation.

Mr. Tran Nguyen Phuc, representative of Intage Vietnam Project, said that Vietnam's economy has been changing strongly with great breakthroughs in the past 10 years. Together with market expansion, domestic consumers have also become more sophisticated, demanding and complicated. That has posed great challenges to businesses in grasping consumer trends and innovating product development to stay ahead of the market.

However, current methods of getting to know consumers are mostly like solving the visible tip of an iceberg, he said. Therefore, a disruptive business is able to get rid of inherent notions and deepen customers’ perceptions to understand them comprehensively when competitive advantages of quality and prices are at equilibrium. Consumers’ minds are becoming more and more modern and following globalization trends. To meet customers' needs, applying technology solutions is the best solution.

Ms. Nguyen Thi Bich Chung from Kantar Market Research Company said, Vietnam is currently one of the most optimistic countries about the economy after the Covid-19 pandemic in Asia. This comes from a change in thinking, lifestyle and financial management of Vietnamese people, as well as efforts of all stakeholders to rebuild the economy after a tough period. “The values that Vietnamese brands and products should aim for are promoting product development solutions, focusing on product values, convincing consumers to believe in the product values they spend money for,” she added.

By Quynh Chi, Vietnam Business Forum