Welcome to our ongoing series exploring the fascinating realm of consumer purchasing behaviour in Southeast Asian countries. In this article, we shift our focus to Vietnam, a rising star among the emerging economies of the region. As an integral part of our comprehensive research, we have previously delved into the buying habits of Singaporean buyers and Malaysian consumers, shedding light on the unique traits and preferences that shape their respective markets.
With its dynamic economy, vibrant culture, and rapidly expanding middle class, Vietnam presents a compelling case study for understanding consumer behaviour in this evolving landscape. As an increasingly attractive destination for international business and investment, this Southeast Asian nation holds immense potential for market growth and development. With that said, here are the top 6 characteristics of Vietnamese consumers that you should take note of upon expanding into this market.
1. Price-sensitive
Although the number of middle class consumers in Vietnam are increasing rapidly, there is still a majority of low average income consumers in the market. The population consists of Vietnamese consumers that are extra careful with their money spent and prioritise core product’s value over additional benefits. Vietnamese shoppers compare prices across multiple retailers before making a purchase, just as Malaysian buyers also have a bargain-hunting mindset, high-income Vietnamese also share the same mindset. Keep in mind that Vietnamese consumers will prefer the best deal over brand loyalty or product quality.
2. Promotion-driven
Similar to Malaysian consumers, Vietnamese are heavily influenced by promotions and discounts. The competitive retail market in Vietnam has resulted in many retail promotions and discounts, and it additionally supports price-consciousness and selectiveness in their purchasing behaviour. With that in mind, sales and promotions are an effective way to attract Vietnamese customers and drive sales.
3. High demand for local products
Vietnamese consumers prefer to buy locally-made products over imported ones, as they value supporting their own economy and culture. Moreover, local products often offer better value for money compared to imported products. This is especially true for essential items such as food and household goods. This means that it is important for businesses to cater to local tastes and preferences of Vietnamese consumers and emphasise the local origin of products.
4. Increasing adoption of e-commerce
The digital shopping trend in Vietnam is gaining significant popularity and should not be underestimated. Online shopping platforms such as Shopee, Tiki, Lazada and Sendo offer convenience and a wider selection of products as well as delivery to remote locations. This contributes to the growth of E-commerce platforms that are rapidly increasing in popularity, especially among younger consumers.
Did you know?
In the third quarter of 2022, around 98% of the internet users in Vietnam owned mobile phones, with almost all of these phones being smartphones.
Source: Statista, 2022
5. Traditional shopping culture
Despite the growth of e-commerce, traditional brick-and-mortar stores are still highly popular in Vietnam. Shopping is often seen as a social activity, and consumers enjoy browsing and shopping with friends and family. This implies that even if your business primarily operates online, your target demographic may not predominantly utilise this platform for their purchases. You may consider having a showroom or physical store to make your products easily available to the Vietnamese in-person consumers.
6. High importance of trust and reputation
Vietnamese consumers highly value personal relationships and social connections and it proliferates to businesses as well. That’s why trust and reputation hold paramount importance for Vietnamese shoppers when it comes to making their purchasing decisions as they place great emphasis on these factors as they navigate the marketplace. Therefore, companies that have a good reputation and strong relationships with their customers are more likely to succeed in the Vietnamese market.
In recent years, there have been several cases of online fraud and scams in Vietnam, creating more cautious consumers especially when it comes to making purchases online. As a result, consumers are more likely to pay attention to the reputation of online marketplaces and sellers when shopping online. Hence, when operating in the Vietnamese market, effectively communicating transparency and reliability becomes one of the most vital objectives to achieve.
Conclusions
According to McKinsey, by 2030, Vietnam will have added about 36 million people to the middle class. Currently, the consuming class in Vietnam is becoming more demographically diverse, sophisticated and spread out geographically (outside of the large cities of Hanoi and Ho Chi Min). Besides global business trends such as the increasing role of e-commerce, and economy-based characteristics such as price-consciousness, Vietnamese consumers have shown to have their own specific preferences. Loyalty to local products and the significant role of social connections are completing the mix of traits of the purchase behaviour of Vietnamese buyers. Understanding the growing importance of this market and characteristics of Vietnamese consumers’ behaviour will help you to tailor the right approach to the Vietnamese market.
What's next for you?
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