Secret of success for FMCG brand building overseas

June 19, 2021 | 08:00
Trademark protection and brand building is essential for local products to make a mark in global markets. Trung Trinh Hien and Thuy Thanh Do from Austrian-backed, Hanoi-based company Live Forever Young discussed the points that need to be noted to be successful in brand building overseas for fast-moving consumer goods segment.
Secret of success for FMCG brand building overseas
Trung Trinh Hien (left) and Thuy Thanh Do from Austrian-backed, Hanoi-based company Live Forever Young

If your company wants to launch a new fast-moving consumer goods (FMCG) product in the Vietnamese market, the approach is to identify a consumer need in Vietnam, develop your product idea in-house (or outsource with contracted experts) and decide on the type of packaging.

You either have an existing brand or you decide on a brand name and design a logo for it. Plus, your marketing team will design the label and fill it with mandatory text to be compliant as well as articulating the product features and benefits. Factors related to product trademarks are often overlooked or not too complicated to implement for the domestic market.

Trademark is one of the intellectual property rights (IPs) protected by laws, including patents, trademarks, copyrights, and trade secrets. These IP rights are a foundation for many businesses to succeed and create valuable intangible assets for owners.

In Vietnam, the IP rights of trademarks can only be established based on registration under the rule “first to file”. Therefore, enterprises need to register for protection of their trademark as soon as possible.

Along with efforts to build brand value, enterprises need to have a strategy in protection of intellectual property rights in key markets, depending on their financial capacity and market development plan.

If you want to do trademark registration for your company’s brand in a foreign market, for example the EU or the US, you will usually need the services of a specialised law firm. To support a number of Vietnam-based organisations that are entering the global market, a three-step approach is recommended.

First, it is necessary to understand the business goals and countries in which they aspire to do business. Second, enterprises need to search their mark before filing a trademark application. The two most significant are to better ensure availability of the registration of the mark before adoption and to help avoid unintended infringement of another’s mark.

In addition, a worldwide trademark search is often helpful to ensure that a mark is available for use as a domain name when a company’s website is intended to have broad, international exposure. In fact, it is preferred to conduct a trademark search as soon as you have an idea for a product or business name that you think might have current or future economic value.

Third, based on the IP laws of a particular country, enterprises shall decide to file a trademark application. It should be noted that there are international agreements that can enable Vietnamese companies to effectively cover multiple abroad markets at the same time.

From the story of ST24 and ST25 rice, it showed that Vietnamese enterprises need to actively register for protection of their trademark in markets where there is a need, otherwise it could be appropriated by a third party. Pursuing lawsuits related to intellectual property rights are awfully expensive in terms of time and cost.

If you just want to sell your product in your brand passively or even as original equipment manufacturer (OEM), you may not need to worry and spend much time about trademark registration with many complicated and time-consuming procedures as well as certain legal costs. However, if you really realise that your company has really unique products with certain advantages in terms of geographical factors, marketing stories, technological know-how, sourcing, and human resources that other businesses do not have, think of building your own brand in the global market for long term and sustainable profit and positioning your own brand.

The story of ST25 rice and other fruits and specialty products of Vietnam that are at risk of losing their own brand to other international competitors in the world market are typical examples.

Regarding branding for FMCG, especially agriculture products in overseas markets, geographical indications need to be analysed. Geographical indications can be viewed as a subset of trademarks. A geographical indication is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.

Here, the Intellectual Property Office of Vietnam has issued decisions on granting geographical indication registration certificates for famous products such as Lang Son star anise, Van Yen cinnamon, Quang Tri pepper, or Ngoc Linh ginseng. At the end of 2015, Vietnam completed the document of registration of geographical indication for star aniseed in Europe. This helps to affirm the brand name and avoid infringement of the IP rights to Vietnam’s star anise products in foreign countries.

The US is a big market of the world with high demand for anise and cinnamon - two agriculture crops that Vietnam is one of the few countries owning them. Therefore, from the very beginning stage, when bringing products to the US market, Vietnam should register for geographical indication protection and local enterprises should think of registering for their trademark protection.

Imagine one day, there is a multinational company knocking on your door, expressing interest in your products, your brand and your company, they will ask to buy this brand at an incredibly good price or propose a joint venture. This only happens when you are the owner of all trademarks in that market, otherwise you will lose your brand to someone else and become an OEM for them.

Indeed, conducting trademark registration as soon as launching products into foreign markets needs to be established as a top priority in the process of building your brand. Is it too difficult when you do it yourself? It will reduce a lot of time and costs, and be more effective if you find the right partners in the EU or US to help you through their professional and experienced services. Together is the word: together they grow and win.

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