Feb 15, 2013

Vietnam - The answer to the US ice cream war

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VietNamNet Bridge – Not only popular ice cream brands which target popular customers, high end brands have also eyed the Vietnamese market.

The landing of the big guys

Häagen-Dazs ice cream has been developed in Vietnam by Lifestyle International JSC which opened the first shop in district 1 in HCM City in August 2012.

With the sale price double Bud’s and higher than the average price level of Baskin-Robbins, it is obvious that the ice cream chain aims the high class in the society. This explains why the interior decoration and the atmosphere in Häagen-Dazs’ shops always have specific features.

Especially, the ice cream chain never intends to launch promotion campaigns so as to maintain the image of a high end ice cream chain.

Therefore, analysts think that Baskin-Robbins, which has positioned itself in the high-end market segment, would not be able to compete with Häagen-Dazs in the high-end market and with Bud’s in popular market.

Vu Trong Nghia, Marketing Director of Swensen’s Vietnam, said the chain has begun pushing up its operation in Vietnam. The first Swensen’s shop in HCM City was opened in 2010, while the second and third were opened in Hanoi.

Nghia said that Swensen’s strategy is to develop at a reasonable pace, exploring the situation to find out a reasonable business model for itself.

Have been present in Thailand for the last 25 years already, Swensen’s network has covered all the big urban areas of the country. The US ice cream chain also wants to repeat the success Vietnam, therefore, it has prepared very carefully for the upcoming marketing campaign in the country.

After two years of learning about the market, the ice cream chain plans to expand its networks with the shops to be located in all provinces and cities, especially in HCM City, Hanoi, Can Tho, Hai Phong and Da Nang.

It seems that Swensen has decided to follow a specific strategy, different from other US ice cream brands which only focus on the southern market.

The representative of Swensen’s Vietnam said it plans to open 30 shops in the next three years in big urban areas of Vietnam.

Analysts think that Swensen’s has every reason to believe in the success of the expansion plan.

Swensen’s Vietnam is put under the management of GAMI Food, a subsidiary of a big group in the real estate and automobile trade group. Therefore, the powerful financial capability of the holding group would help Swensen’s effectively in seeking retail premises to develop the shop network.

While the Swensen’s shops in HCM City are located next to the Minh Duc Secondary School and Nguyen Thai Hoc Primary School, the Swensen’s shops in Hanoi are also located in the areas with high population, especially children.

Swensen’s targets medium class clients. This can be seen in its pricing strategy: a cube of ice cream is priced at VND35,000, which is not too expensive if compared with Bud’s, and still lower than Baskin-Robins.

A lot of difficulties are awaiting Swensen’s in Vietnam, even though the brand has been very succeeding in Thailand.

Analysts say that unlike in Thailand, in Vietnam, Swensen’s would have to compete not only with other ice cream brands, but also with coffee brands as well. Meanwhile, coffee was not a rival of Swensen’s, because this was not the hobby of Thai. Meanwhile, in Vietnam, it would have to struggle with Trung Nguyen, Highlands Coffee and Starbucks, the fellow-countryman from the US.


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