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Tuesday, June 25, 2024

Minor steps needed before going global

By Pham Le

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Academic and industry experts believe it is time to take a comprehensive and concrete approach to building Vietnam’s national brand.

Vietnam’s national brand value has witnessed continuous improvements in the last few years. According to Brand Finance, Vietnam ranked 33rd globally in 2021 with a national brand value of US$388 billion, up 21.6% year on year. The country was also among the 10 fastest growing national brands.

“Such outcomes have been achieved with the concerted efforts of the Government’s strategic programs and support, together with firm-level attempts to increase their presence and value in both domestic and global markets,” Dr. Erhan Atay, senior program manager for international business of RMIT University, said in a statement sent to The Saigon Times.

However, while the exporting values of key industries such as processed food and garment have increased significantly, the reality is that the number of brands originating from Vietnam that is globally known is extremely limited, he remarked.

Dr. Dang Thao Quyen, RMIT School of Business & Management Academic, echoed the above remark, saying that Vietnam’s export revenue mainly comes from selling raw materials or attending to simple production or assembling processes of global value chains.

“These business activities add little value and are unsustainable for firms and the economy. Eventually, global consumers remain unaware of Vietnamese brands, while domestic consumers prefer international products over local ones in many instances,” Quyen said.

The RMIT academics said that to compete with global businesses, both the Government and the business community need to take a comprehensive and concrete approach toward strengthening the nation’s brand and the brands of individual firms.

Domestic market first

Speaking at the International Business Week event themed, “National branding in the global business context: The way forward for Vietnam”, organized recently by RMIT University, experts pointed out strategies that should be adopted to approach the local market before going global.

According to experts, if a country or brand wants to win the global market, it should first gain the confidence of its domestic citizens and market. Companies should not underestimate the significance of the domestic market. If they cannot satisfy customers in their own homes, there is no guarantee they will have any chance of competing in markets with different political, socio-cultural and economic environments.

“If a country and its products are not attractive to its citizens, then the country will have a tougher time attracting foreign audiences and maintaining a favourable reputation in the international arena for the long term,” said Dr. Lindsey M. Bier, assistant professor at the University of Southern California, United States.

Penetrating international markets can be a bumpy journey which first requires minor steps, patience and effort that firms should be prepared for. Firms can first accept being producers of other countries’ brands before selling products with their original brands. However, they should not lose the Vietnamese origin during any stage.

“We need to be realistic. Everybody wants to go international and be a big player there, but we must know who we are. We must know the position of our nation. So, don’t think too big; let’s go step by step,” said Vo Thi Lien Huong, vice general director of Secoin Corporation.

Understanding foreign markets

The experts pointed out that due to a lack of knowledge about foreign markets, many Vietnamese firms have learned expensive lessons and lost their brands or trademarks to foreign enterprises. Thus, firms should obtain adequate knowledge to penetrate, grow and protect their brands globally.

“Many businesses that lack experience exporting products to foreign markets had their brands acquired. Foreign enterprises often propose to change the brand name to a foreign brand. Vietnamese businesses accept and lose their brand names when they go to foreign markets,” said Lai Tien Manh, Brand Finance country representative in Vietnam.

“We need to think about where we have an edge compared to others. We must be a green brand,” said Dr. Daniel Borer, RMIT Vietnam economics lecturer, adding that differentiation is the key to standing out and excelling in international markets. Furthermore, the country and firms should stay updated with global trends regarding sustainability and integrate the UN Sustainable Development Goals into their strategies for sustainable growth.

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