Local makers wring for life

According to Euromonitor International, the world leader in strategy research for consumer markets, Unilever Vietnam currently leads laundry care in the country with 59 per cent value share. Its leading brands are Omo, Comfort, Surf and Viso.

“Since its participation in Vietnam, Unilever has had a very strong understanding of Vietnamese consumer needs and behaviour as a result of its huge investment in research and development activities. Furthermore, Unilever was also very active and creative in its marketing activities,” said Euromonitor International in its website.

Some 23.1 per cent of Vietnam’s laundry care market share is now held by US’ Procter & Gamble.
Meanwhile, the remaining market share of the product is controlled by local brand names like Vi Dan, Viso, Lix, Daso and My Hao, and some imported brand names like France’s Econet, Malaysia’s Lucako and Thailand’s Pao.

Vietnam has a population of nearly 90 million people, with per capita income of $1,540 per year. Despite economic woes, the local laundry care market has been growing recently at 10 per cent per year.

Euromonitor forecast that in the 2012-2016 period, this market’s size would grow from VND7.5 trillion ($360.5 million) to over VND8.6 trillion ($413.4 million). During the 2006 -2011 period, this size swelled  from VND3.8 trillion ($182.7 million) to nearly VND7.3 trillion ($351 million).

However,  according the Ministry of Industry and Trade’s VietnamCompetition Authority, only few out of 30 local laundry care makers have been able to keep themselves afloat in the market due to pressure from foreign rivals.

But, some local firms have found ways  to compete. For example, Lix Detergent Joint Stock Company has since 2000 been a processor for Unilever, with an annual capacity of thousands of tonnes of products. However, Lix has always found ways to expand their production size. It bought in 2005 a Hanoi-based factory of Unilever and gradually amplified its own products with its own brand names. Besides, Lix has also boosted its exports, which currently occupy 44 per cent of its total revenue. This strategy has helped Lix fetch an average annual revenue growth rate of 25 per cent.

My Hao Chemical Cosmetic Joint Stock Company had found its own way without becoming Unilever’s processor. My Hao said it had turned down Unilever’s proposal to buy the My Hao brand name, at a price of several million US dollars in 1995, $10 million in 1998 and $30 million in 2010.

“If we sold the My Hao brand name to Unilever, it was likely that we would have many orders from partners with attractive prices. However, when the market went down, we would lose our market,” said My Hao’s director Luong Van Vinh.

My Hao has annually since 2008 invested $1 million into expanding and improving production and distribution chains and building its own brand names. At present, its products occupy five per cent of Vietnam’s laundry care market and also exporting its products to Taiwan, Laos, the Philippines and North Korea.  

According to Euromonitor, in 2011, laundry care experienced increasing demand from consumers in line with increasing living standards and rising consumer awareness toward hygiene in the country. International manufacturers continued to boost their sales by introducing new products and new marketing campaigns to stimulate growth, while local manufacturers continued to upgrade their packaging to improve their brand image to attract consumers’ attention.