|Vietnamese tech companies are slowly conquering foreign markets, but need to up their game to compete with other brands |
With the Regional Comprehensive Economic Partnership coming into effect on January 15, Tran Tien Dong from the Vietnamese Association in Myanmar hopes that he can finally buy Vietnamese mobile phones at more affordable rates.
“I like Vietnamese phones but so far I have bought Chinese models as they were cheaper,” Dong explained, who also mentioned that although Vietnamese phones have been exported to Myanmar, Chinese and Thai devices have been dominating the market for a long time.
The first telecom companies from Vietnam crossed the border to Myanmar in 2016, with Viettel first and then VNPT. Both major telecom providers are licensed to offer their services in the country’s market, and Viettel even entered joint ventures with over 10 local companies to support its operations.
However, not every Vietnamese company can showcase similar successes when it comes to venturing abroad. In June 2019, Mobile Star Corporation, the owner of the Mobiistar smartphone brand, announced its departure from the Indian market, just one year after entering it. The main reason for the company’s defeat in India was the bankruptcy of its partner, Vsun Technologies, a month earlier, which disrupted the supply chain of the Vietnamese smartphone maker.
At his last appearance in the media, CEO of Mobile Star Corporation Ngo Nguyen Kha explained that as Vsun Hong Kong and Shenzhen lost liquidity in the Chinese market, they could no longer support Mobile Star’s operations in India.
Kha added that while many investors his company sought out were initially impressed by the rapid development of Mobile Star’s presence in India as well as the company’s brand identity, Vsun’s massive debt frightened them, leading to failed negotiations.
After launching a total of nine different models in the Indian market during its short presence, Mobile Star’s devices are now no longer available. Meanwhile, the company’s smartphones are also nearly non-existent in the Vietnamese market, even though some larger distributors like Mobile World are still listing them, albeit without available stock.
Most national brands of other countries succeed by going global with their distinctive brands. Pham Thi Kim Loan, president of Ngan Ha Co., Ltd., a Ho Chi Minh City-headquartered company specialised in providing vertebrae-treatment products branded Doctorloan, commented, “Although many Vietnamese products show a decent level of innovation, they miss out on inviting international investors onto their journey and thus don’t make use of their full potential.”
Up to now, Ngan Ha has been granted 236 patents globally and only focuses on production, application, and trade. Loan still remembers the proposal of a Chinese investor – an owner of a large Chinese brand. “When she came to Taiwan and was introduced to our products, she was amazed at what we had. However, after that, she went to Vietnam and told me that it would be difficult for our products to be labelled as ‘Made in Vietnam’ when exported to China,” Loan explained. “The investor asked us to set up a company in Singapore and use the ‘Made in Singapore’ label or mix our production with that of Chinese manufacturers.”
Loan said that, though she thought about following the investor’s suggestion, she decided to withdraw and continue to build her Vietnamese brand. “However, to build a good brand one must go from a solid foundation, with high-quality products, sophisticated customer care, and innovative marketing. Just being Vietnamese alone is not good enough.”
While many telecom companies are still confused with their internal problems, Hanoian security software and electronics company BKAV promoted its Bphone smartphones in Myanmar for more than a year, even setting up a branch called BKAV Myanmar.
According to the company’s representative, one of its biggest advantages is the trust that the people from Myanmar have in Vietnamese brands, which are perceived of higher quality than Chinese or Thai products while offering affordable prices.
As high quality is not the only element that matters for the success of a product line, intangible factors such as brand value are increasingly respected by investors as they reflect the reputation of businesses in the marketplace and the fiercely competitive world today.
At the end of November, BKAV began exporting its AI View cameras to the US market, enabled by cooperation with tech giant Qualcomm.
Tommy Le, BKAV’s vice president of US business development, said, “At Qualcomm’s headquarters, our AI View cameras will be presented within a key project in the company’s smart city strategy. BKAV got the first order after more than three months in the US, which represents a huge step forward that reaffirms our capabilities and the quality of our products. From here, we have the foundation to further develop in this market, towards becoming one of the top five camera manufacturers in the world.”
However, to even be able to enter the US market, BKAV’s AI View camera had to go through multiple tests and receive the FCC certification, a rigorous proof issued by the US Federal Communications Commission, which applies to electronic products sold in the US.
Finding the right market
Most international business experts agreed that branding becomes increasingly important. Aware of this trend, BKAV last year joined the Open Security and Safety Alliance along with leading names such as Bosch, Qualcomm, and Hanwha. The 150 members of the alliance aim to provide image and video analysis solutions as well as create a framework providing standards for operating systems, Internet of Things infrastructure, data security and privacy, and improved levels of performance.
Equally aware of the importance of branding, the Vietnamese government decided to work together with consulting firms such as Brand Finance to design the national branding programme Vietnam Value, thereby receiving the attention of the business community and investors at home and abroad. With the Vietnam Value Programme, the country is on the right path to progress in branding and economic development, according to analysts.
Every year, brand evaluation and strategy consultancy Brand Finance examines thousands of the world’s top brands. In December, the consultancy stated that the overall value of Vietnam’s top 50 most valuable brands increased by 28 per cent, growing from $18.8 billion in 2019 to $26.1 billion in 2020.
Additionally, Brand Finance stated, “Viettel continues to dominate as the nation’s most valuable brand for the fifth consecutive year, with its brand value increased by $1.5 billion.” Meanwhile, Vietcombank overtook BIDV to become Vietnam’s “strongest brand” with the brand strength rating AAA-, the consultancy stated.
Each brand in the company’s assessment is assigned a Brand Strength Index score out of 100, which feeds into the brand value calculation. Based on this, each brand is assigned a corresponding rating of up to AAA+, similar to credit ratings.
As such, the efforts of Vietnamese brands are being recognised increasingly. While in the early 2000s, Vietnamese enterprises did not appear in international rankings, latest since last year, the total value of the 50 leading brands reached over $9.3 billion.
However, the way to bring Vietnam’s technology brands to the global market is not entirely clear. Nguyen Thanh Son, branding expert and chairman of MVV Entrepreneur Academy said, “One of the weaknesses of Vietnamese brands is the lack of a global vision, which is crucial when expanding worldwide. However, as it is not possible to dominate global markets immediately.” Son added that Vietnamese brands “have to consider their key markets before spreading too fast too thin.”