Vietnam - The once well-known Vietnamese brands that fall into oblivion

VietNamNet Bridge – It is quite a normal thing that a brand turns up and then disappears from the market. However, economists say the disappearance of a series of once well-known Vietnamese brands is really worrying.

All official reports released by stage agencies and independent research institutes show that Vietnamese businesses have been undergoing the toughest days in their durations.

In the first nine months of 2012 alone, 40,000 enterprises reportedly had to leave the market, which was equal to the total number of enterprises leaving the market in the previous 20 years. Meanwhile, a lot of the existing 500,000 enterprises have been incurring losses.

Tribeco, the brand which turned up in 1992, was once the pride of the Vietnamese. The products bearing Tribeco brand were once listed in the list of the Vietnamese high quality products.

However, Tribeco is no more the pride of the Vietnamese, because it has been transferred to Taiwanese Uni President Group.

Pho 24, which makes real Vietnamese pho (noodle soup) with 60 branches throughout the country and 20 branches in Asia, has fallen into the hands of the Filipino JolliBee.

A lot of other well-known brands like Dinana, Da Lan and P/S have also transferred to foreigners after long periods of unprofitable business periods. The owners of the brands, who spent years to develop the brands, had to sell them to avoid the economic difficulties in the context of the economic crisis.

Hoang Tung, a marketing expert, on one hand, said the establishment or close of businesses is quite a normal thing in a market economy. However, it is really “abnormal” if too many brands disappear just within a short time.

“The wave of the disappearance of Vietnamese well-known brand not only shows the health of the enterprises and the corporate governance skills of the owners, but also shows the weakness in protecting Vietnamese brands,” Tung said.

Vu Kim Hanh, Director of BSA, a business research and support center, has noted that Vietnamese businesses have to struggle to live in the context of big disadvantages.

Vietnamese enterprises have to borrow money from banks at the interest rates much higher than foreign ones. Meanwhile, Vietnamese enterprises are just small ones with limited financial capability, while foreign ones are eminent rivals which have been working in the fields for many years.

Vietnamese enterprises are inferior to foreign ones in everything, from the financial system, corporate governance skill to the labor force quality. Meanwhile, they always have to suffer disadvantages in a business environment with unfair competition.

Therefore, a lot of them, after certain periods of operation, had to leave the market, while others had to sell themselves to foreign international conglomerates.

There are many reasons that make Vietnamese fail to develop and protect their brands. These include the Vietnamese people’s habit of preferring foreign made products, the lack of the State’s strategy to support businesses, the lack of capable consultancy firms, the lack of cooperation among businesses, and the lack of the support by the mass media.

Luong Van Vinh, General Director of My Hao Cosmetics Company, said while foreign enterprises in the same business fields can spend a lot of money to popularize their products through noisy and costly sale promotion campaigns on TVs and mass media, My Hao can only try to directly introduce its products to as many people as possible.

Vinh has revealed that some foreign partners have expressed their willingness to buy My Hao brand at 30 million dollars. However, the company has refused the attractive suggestion.

Nang Luong Moi

Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.