Vietnam: into the minds of millennial shoppers



Photos: Viet Tuan

Brands need lớn identify how khổng lồ specifically target Millennial customers.

by Mr. Ralf Matthaes / Founder/Managing Director, Infocus Mekong Research

Vietnam’s Millennials are changing the landscape of consumerism. These 18-35 year olds exhibit different purchasing behavior và require different sale strategies to lớn harness their interest in your products and services and above all their ever growing disposable incomes.

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FMCG growth

2018 witnessed the first year in over 25 years that volumes of fast-moving consumer goods (FMCG) experienced a decline in urban Vietnam giới, at 0.1 per cent, và recorded only a mild 2.4 per cent value growth, driven mostly by inflation. FMCG growth in rural Vietnam giới was more positive sầu, with 5.5 per cent value growth and 3.2 per cent volume growth.

FMCG marketers need not panic just yet, however, as there are several growing trends that shed a healthier light on the FMCG Millennial market.

FMCG purchases are typically measured by what is purchased & consumed inside the home và does not include out-of-trang chính consumption, where Millennials are flexing their economic muscle.

Infocus Mekong Research’s 2019 Consumer Confidence Index is still very positive, at 91 points out of 1đôi mươi, only 1 point below 2018, meaning that consumers are still upbeat and willing to spover but are spending their hard-earned VND differently than their non-Millennial contemporaries.

Millennial consumers shop very differently & look more for br& experience than other consumers and place a high value on the entire experience và convenience of spending money than non-Millennials, whose key focus has been on best value for money and brands that are “good enough”.

What is a Millennial?

Millennials, also known as Generation Y, are the demographic cohort that directly follows Generation X, consisting of individuals born between 1982 and 2004. Millennials grew up in an electronics-filled & increasingly online & socially-networked world. They are the generation that has received the most marketing attention. Having been raised under the mantra “follow your dreams” & being told they were special, they tend lớn be confident.

In Vietphái mạnh, though similar to lớn global Millennials, they are typically younger and defined by Vietnam’s turbulent history và the arrival of the mạng internet & mass media. Thus, a typical Millennial in Vietnam giới was born ten years or more after the country’s reunification in 1975 & are defined by the arrival of the mạng internet in December of 1997, making them aged from 18 to lớn 35 but with very similar traits khổng lồ their global brethren.

Prevailing trends

The major difference between Millennials và older consumers can be best summed up as them caring more about the personalization of goods và services, with a keen eye on br& experience và enhancement, convenience and health, & being digital natives & much more brvà astute và savvy than older consumers.

Millennials almost always retìm kiếm their purchases online before any purchase. They compare & research online, visit stores to try, và then ultimately buy online to lớn save sầu money và gain convenience.

These consumers enjoy và want their freedom và independence, và hence tend to go out much more in terms of dining and eating out, stepping out of the yoke of parental control. This is partially what is driving the reduction of FMCG in-trang chính volume consumption, as they buy less khổng lồ consume at trang chính and more when they are on the go. Just visit any of Vietnam’s coffee shops, fast food outlets, & convenience stores & see the high-volume traffic. Circle K, by way of example, experienced double-digit growth in 2018, and outlets such as Jollibee are also seeing phenomenal growth due lớn this trkết thúc towards out-of-trang chủ consumption.

Millennials are the drivers of everything digital. Ninety per cent own a smartphone & over 60 per cent own laptops, desktops, tablets, and even smart watches. Seventy-eight per cent made at least one purchase online in the last 30 days, highlighting a mega Millennial trend: online shopping. Most online platforms are thriving in terms of growth but are still hindered by supply chain issues & the limited use of electronic payments, but growth for some is in the triple digits. This further adds to lớn the reduction of growth in the traditional FMCG market as digital purchases are impacting both modern trade & traditional trade growth. Ironically, of the $3 billion plus e-commerce market, some categories are already outselling modern and traditional trade.

Banks và insurance companies in Vietphái nam have realized this digital trend explosion and are all offering omni-channel payment and purchase options, further catering to these tech-savvy consumers.

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In terms of sản phẩm và service brand selection, Millennials choose brands and services that offer personalization, such as being able khổng lồ thiết kế your own running shoes, and apps, which you can program with your preferred content, và all must offer convenience, such as miễn phí delivery, have sầu a health platkhung, và be eco-friendly. These are the new parameters of br& selection and should evolve even further over the next few years.

Another key trkết thúc is switching from local Vietnamese brands lớn international brands. This especially holds true for food & beverages, due lớn recent food safety và hygiene issues ahy vọng some local brands. This is further exacerbated by the perception that Vietnamese brands should be cheaper lớn produce, creating the perception that local brands should cost less than international brands and hence consumers select international brands, as they are perceived to have sầu better chất lượng & assurances, even at a slightly higher price.


FMCG companies’ tactics and strategies

Many FMCG companies have sầu been quick lớn realize these changes. Nowhere can this been seen more prominently than the growth in digital advertising spend, which in a short five years has grown from about $30 million to lớn an estimated $300 million in 2018. Though only accounting for some 17 per cent of total advertising spover, it does bare witness that FMCGs are fishing where the fish are: online.

Almost all major FMCG’s advertise on Facebook & Google và even have sầu their own bạn pages và blogs for consumers khổng lồ add & tóm tắt experiences. This is one area where proper targeting & knowing exactly who your Millennial digital native sầu is becomes crucial, khổng lồ ensure you are measuring the impact of your digital campaigns to lớn better understvà your RoI, which Infocus can help with via our partner Miaozhen systems.

Many FMCGs have embraced gaming to lớn bring their messages to these young consumers. As all are digital and grew up with gaming, many companies are attracting consumers by gamifying their messages to generate brand awareness and consideration.

As Vietnam’s tech boom continues, many companies are reaching consumers with digital promotions, using QR codes to deliver discounts & vouchers lớn drive business. This again allows for immediate access & reduces cost, as paper & procedures are minimalized.

Vietnam has become the l& of apps. There are over 4,000 available daily to tải về. They allow FMCGs the power lớn gain invaluable information about their consumers, while driving their communications and allowing them to lớn better target their consumers with algorithm preferences, making consumer choice so much easier.

FMCGs are also embracing market place platforms, such as Shopee, Senbởi và Lazadomain authority. These market places offer không tính tiền delivery & ultimately convenience, further driving sales and reducing reliance on store presence, which is becoming more & more cost prohibitive sầu.

The use of social truyền thông media has skyrocketed, from the obvious (Facebook, Google, Zalo, etc.) khổng lồ the new - Instagram, Viber, và Facetime. FMCGs are placing themselves at the forefront of where Millennials spend most of their time; online and via their smartphones. This allows for continuous br& building in an ever more fragmented truyền thông market.

Finally, many FMCGs have brought giải pháp công nghệ khổng lồ the retail environment, where smartphone-targeted ad campaigns tell a consumer where the best đơn hàng are & what discounts can be had.

Considering that smart công nghệ has only been in Vietphái mạnh for seven years or so, it is amazing how fast the digital advertising age has transformed the FMCG landscape & will continue lớn bởi so.

Winning Millennials

So, to ensure the continued growth in FMCG from Millennials, it is critical to offer a svào online presence, apps, gamification, smart tech retail messaging, online promotions, và, most importantly, nội dung & products or services that meet these consumers’ expectations, which are personalization, convenience, a health platform, eco-friendliness, và a sense of belonging and an ability khổng lồ nói qua.

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If these can be achieved, the last challenge for success is to ensure you know how to lớn specifically target these Millennials, which is all about knowing your target audience and their preferred medial channels & which categories they prefer for which truyền thông channels and what time lớn engage them.