Green transformation and a journey to the future

According to our Consumer Outlook 2024 report, 16 per cent of Vietnamese consumers now regard a sustainable future as a pivotal factor influencing their lifestyle and consumption decisions in the long term. Particularly noteworthy is the finding that 24 per cent are actively focusing on sustainable living in their short-term planning, underscoring the growing significance of environmentally friendly practices.

Le Minh Trang, associate director Retail Measurement Service NielsenIQ (NIQ) Vietnam

Among the short-term priorities identified, 82 per cent of Vietnamese consumers are emphasising the enhancement of their physical health and overall wellbeing. This indicates a dual concern for self-care and the selection of products and services that are conducive to both personal health and environmental sustainability. Such trends suggest an evolving consumer mindset, wherein the interconnection between individual health and ecological sustainability is becoming increasingly salient.

The aforementioned study further reveals that apprehensions surrounding climate change and environmental degradation rank among the top five concerns among consumers, with 14 per cent deeming this an urgent issue that warrants immediate attention. This rising concern, particularly in light of Vietnam’s vulnerability to climate change, illustrates a burgeoning awareness of the imperative to protect the environment.

A salient factor in this evolution is the gradual transition of consumer focus from individualistic concerns to broader community issues, wherein the quest for a sustainable future plays a pivotal role. Historically, consumer attention was predominantly directed towards factors with immediate personal relevance, such as health and financial stability.

However, there is a discernible shift towards recognising the significance of external factors, including environmental quality, sustainability, and corporate social responsibility. This transformation presents considerable opportunities for businesses and brands to cater to the increasing demand for environmentally friendly products and services.

Emerging green consumption trends in Vietnam encompass a marked increase in the utilisation of organic products, recycling initiatives, and environmentally friendly services. Businesses are becoming acutely aware that retaining consumer loyalty necessitates not only the provision of high-quality products but also a demonstrable commitment to environmental stewardship.

Numerous brands are undertaking a transformation of their business models towards sustainability, implementing practices such as utilising recycled packaging and committing to reducing carbon emissions and safeguarding water resources.

Industries significantly impacted by the green consumption trend and the rising interest in sustainable living within Vietnam include food and beverage, personal care, fast-moving consumer goods, and consumer electronics. There is a discernible consumer preference for organic products, eco-friendly packaging, and energy-efficient devices. Notably, with 82 per cent of consumers expressing interest in improving their health and wellbeing, the food and personal care sectors are experiencing robust demand for safe, chemical-free products.

The adoption of green production strategies has conferred substantial business benefits, particularly as consumer interest in sustainable consumption intensifies. Research from NIQ indicates that 42 per cent of consumers in Asia-Pacific consider it ‘very important’ for businesses to proactively mitigate their environmental impact, while 34 per cent classify this as an ‘important’ factor. Such findings suggest that businesses dedicated to sustainable practices enhance customer loyalty and receive robust support from consumers who value environmental accountability.

Transitioning to green production methods not only enables businesses to reduce long-term operational costs through optimised resource use and waste minimisation but also enhances profit margins. Furthermore, organisations that commit to sustainability often benefit from an elevated brand image, thus gaining a competitive advantage in the marketplace.

Finally, adherence to international and national environmental standards paves the way for new opportunities in exports and business collaborations, thereby reinforcing the significance of sustainable practices within the context of global trade.

According to NIQ’s Sustainability Report, businesses will increasingly confront significant transformations and heightened pressures from both consumers and environmental regulations in the future. A critical area of focus is the evaluation and actionable response to environmental impacts. To fulfil sustainability commitments, companies must conduct regular assessments of their ecological footprints, encompassing carbon emissions, energy consumption, and other ecological ramifications.

This endeavour often necessitates the involvement of specialists or partnerships with third-party entities to identify shortcomings and areas requiring enhancement. Businesses are thus compelled not only to optimise their production processes but also to refine their supply chains – from the sourcing of raw materials to the consumption of finished products – ensuring that their operations align with strategies aimed at minimising environmental impact.

Integral to any green development strategy is the transition to alternative packaging solutions. Prioritising the reduction of plastics and non-biodegradable materials is essential. Employing environmentally friendly packaging options - such as recycled materials, biodegradable solutions, and minimised packaging dimensions - will significantly mitigate waste and enhance logistical efficiency. This shift is not merely a strategic environmental initiative but also a pressing demand from consumers and regulatory authorities.

The emergence of green consumption trends exerts considerable pressure on businesses to rapidly adapt and transform. From optimising production methodologies and managing supply chains to integrating innovative technologies, companies must navigate a landscape characterised by stringent legal requirements while simultaneously addressing the escalating expectations of consumers.

This paradigm shift creates substantial opportunities for enterprises that proactively transition to sustainable business models, thereby enhancing their competitive positioning in the marketplace. The green consumer market is projected to experience robust growth through 2030 and beyond, as sustainable solutions and advanced technologies increasingly dominate global trends.

Businesses must act on green transformation Green transformation is urgent for manufacturing businesses to improve competitiveness, attract green investment, and ensure sustainable impacts, according to experts.

Dual transformation an essential choice for business Accelerating digital and green transformation is expected to help Vietnam enhance the efficiency of attracting foreign investment.

Businesses embrace dual transformation to drive growth Digital transformation is a prerequisite for businesses to achieve faster green transition, and green transformation itself is pressuring businesses to select the right tools for digital transformation.