“Vietnam is the next upcoming market, and there’s fierce competition,” says Oru Mohiuddin of consumer researcher Euromonitor International.
The country’s 90 million people increasingly are eager to buy Western brands they deem superior to many local and regional products. And marketing executives say Vietnamese are more aspirational than consumers with comparable incomes in other developing nations. That’s one reason many global companies already established in China, Brazil, and India are now turning their attention to Vietnam as the next great emerging market.
Sales of diapers, home-and-personal-care products, and beauty goods by all manufacturers totaled $ 1.35 billion in the country last year, a 14 percent increase over 2010, according to Euromonitor. While that’s minuscule compared with P&G’s global sales last year of $ 82.6 billion, Vietnam is expected to be one of the fastest-growing emerging markets in coming years, Euromonitor says, with consumer spending forecast to jump 42 percent from 2012 to 2016.
“Vietnam is a young culture, very interested in trying new things, so you don’t have to be the 100-year incumbent to be able to win,” says Deb Henretta, group president of P&G’s Asia business. Vietnam and other Asian countries, including potential markets such as Myanmar, are “the growth engines for the company.”
P&G is betting on the appetite in Vietnam for premium brands, such as its Olay skin whiteners, and that its larger range of products will give it an advantage. It’s also producing lower-cost merchandise that can be bought by consumers with modest incomes who can trade up later. Explains Henretta: “We want to win with all levels of consumers.”
The bottom line: Procter & Gamble, which already gets 37 percent of sales from emerging markets, is targeting fast-developing Vietnam for future growth.