Foreign
firms, with their deep pockets, cornered a lion's share of advertising on
television, with their local rivals, especially small and medium-sized ones,
unable to match them in the spending stakes.
Despite the economic slump, advertising
revenues saw strong growth in the first nine months, rising 16 per cent to
nearly $600 million.
TV ads, mostly by multinationals, accounted
for over $500 million.
A recent poll by market researcher Kantar
Media Vietnam found that in the period only seven Vietnamese brands figured in
the list of the 20 biggest spenders.
Luong Van Vinh, general director of My Hao
Cosmetics Company, said his company has chosen to expand its distribution
network and virtually did not advertise due to high cost.
Trinh Chi Cuong, director of Dai Dong Tien
Plastic Company, agreed saying that most SMEs are reluctant to advertise on TV
due to the costs.
A 30-second spot normally costs VND30-35
million ($1,427-1,665), he said, adding that a campaign will only be effective
if the advertisement appears frequently on TV.
With their ability to spend millions of dollar
on ads, a figure that local companies can only dream of, foreign brands have
gradually taken over the market from local businesses.
One shampoo manufacturer, for instance, spent
$8.1 million on TV ads in the first nine months, Kantar Media found.
At a time when local businesses are forced to
cut costs, an international shampoo manufacturer has increased its spending on
TV ads 10-fold to nearly $5.7 million.
The domestic food sector have been the worst
affected.
Luu Duong, chairwoman of the Ho Chi Minh City
Sauce Club, said with the big players' massive spending on TV ads, many small
sauce producers have seen their market share shrink, with some even going
bankrupt.
After the 2008 scare when the toxic 3-MCPD
asfound in soy sauce, small businesses have updated technologies and production
lines, but were still unable to attract consumers because they could not afford
ads to inform them of the changes, she said.
Ngo Thi Hoang Mai, deputy general director of
Lien Thanh Fish Sauce Co, said the company had recently decided to run a
six-month TV ad campaign until February next year at a cost of hundreds of
millions of dong.
Giant foreign firms spend that amount in just
a few days but her company has to consider it very carefully, she said.
The director of another food processing
company said every time the company launches new products, it also thinks of
running TV ads but is unable to afford it.
The company instead has to depend on inviting
shoppers at traditional markets and supermarkets to try its products, he said.
Some domestic firms manage to reach their
customers directly through promotion programmes, and so focus on displaying
their products at supermarkets.
They strengthen their distribution system and
increase their sales staff and margins for agents.
Vinh of My Hao Company said after a year of
not advertising on TV, the company has recently run commercials on provincial
channels since they cost less than in big cities.
Some other companies too have chosen this
route, especially since it allows them to reach rural consumers.
VIR - VNA
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