Vietnam is experiencing a remarkable economic surge driven by a flourishing manufacturing sector, robust exports, and an increasingly prosperous middle class. Recognized by the World Bank as a “development success story,” the country is witnessing significant advancements in living standards and infrastructure. This article will delve into the dynamic F&B sector, the burgeoning E-commerce landscape, and the flourishing Digital Economy, reflecting Vietnam’s evolving market trends.
With both the B2B and B2C sectors showing promise, 2022 has emerged as an auspicious year for launching businesses in Vietnam. Vietnamese consumers’ shift towards modern, high-quality products provides crucial consumer insights for businesses exploring the Vietnamese market, guiding product and strategy development.
Interested in the Vietnamese market? Check out InCorp Vietnam’s Market Research Services
What is Market Research?
Market research is a systematic process aimed at gathering pertinent information about your target market and customers. This practice serves to validate the success of a new product, refine existing products, and gauge brand perception, ensuring effective communication of your company’s value proposition. While market research doesn’t provide a crystal ball for marketers, it addresses key questions about industry dynamics, though obtaining insights about customers requires a comprehensive approach.
Market researchers explore various facets of the market, and this endeavor can span weeks or even months to accurately depict the business landscape. The methodologies employed in market research encompass deploying surveys, engaging with sample groups, conducting interviews, and other similar processes.
The primary objective of undertaking market research is to comprehend and analyze the market associated with a specific product or service. This understanding helps in anticipating the audience’s response to a product or service. Consumer insights from market research are crucial for refining marketing efforts, shaping advertising, and identifying consumer preferences and service expectations, guiding businesses in product and service development.
How Market Research Works?
Market research serves as a crucial tool for assessing the feasibility of a new product or service. The findings derived from this process play a pivotal role in refining product design and shaping the strategy for its public launch. Market research is instrumental in determining market segmentation, aiding in product differentiation, and facilitating targeted advertising efforts. Businesses undertake a series of tasks as part of the market research process, focusing on gathering information specific to the market sector the product is intended for. This information is meticulously analyzed, and pertinent data points are deciphered to form conclusions about optimal product design and marketing strategies tailored to the intended market segment.
Market research becomes an integral part of the research and development (R&D) phase during the introduction of a new product or service. The process can be conducted through various methodologies, including surveys, product testing, interviews, and focus groups. Each method contributes to gathering valuable insights that guide businesses in making informed decisions regarding product development and market positioning.
Primary Market Research vs. Secondary Market Research
The depth of exploration, in market research, can be classified into two fundamental types- qualitative and quantitative, each serving distinct purposes based on the nature of the studies conducted and the information sought within the industry. Qualitative research delves into public opinion, scrutinizing how the market perceives the products currently available. On the other hand, quantitative research focuses on data, seeking pertinent trends within the information extracted from public records.
Primary research involves the direct pursuit of firsthand information concerning your market and the customers within it. This method proves particularly valuable when segmenting your market and developing detailed buyer personas. On the other hand, Secondary research involves utilizing existing data and public records to derive insightful conclusions. This encompasses a diverse range of sources, including trend reports, market statistics, industry content, and pre-existing sales data within your business.
| Primary Market Research | Secondary Market Research |
| Exploratory Primary Research: This form of primary market research is less focused on quantifiable customer trends and more on identifying potential challenges that merit collaborative attention. Usually initiated as a preliminary step, before any specific research is conducted, exploratory research may entail open-ended interviews or surveys with small groups of individuals. Specific Primary Research: Following exploratory research, specific primary market research comes into play, aiming to delve into issues or opportunities that the business has already identified as significant. In this phase, the business may narrow its focus to a smaller, more precise segment of the audience and pose targeted questions to address suspected problems or capitalize on emerging opportunities. | Public Sources: These readily accessible materials form the foundational layer of secondary market research. Typically available for free, public sources include government statistics. Examples in the U.S. include the Bureau of Labor & Statistics and the U.S. Census Bureau, providing comprehensive insights into various industries nationwide. Commercial Sources: This category comprises market reports generated by research agencies such as Gartner, Pew, or Forrester. While this information is portable and distributable, it usually comes with a cost for download and acquisition due to its depth and industry expertise. Internal Sources: Internal data within your organization is a valuable component of secondary research. Information such as customer retention rates, average revenue per sale, and historical data on the performance of both old and new accounts can offer crucial insights into current buyer preferences. |
Some Types of Market Research
- Interviews
Interviews provide a platform for face-to-face discussions, whether in-person or virtual, allowing for a natural flow of conversation and the observation of the interviewee’s body language. This method is instrumental in gathering insights about individuals and helping shape buyer personas. These personas encapsulate details about the ideal customer, including age, family size, budget, job title, work-related challenges, and lifestyle aspects. Having a well-defined buyer profile can significantly influence your overall marketing strategy, guiding decisions from product features to website content.
- Focus Groups
Utilizing a small, carefully selected group, focus groups facilitate product testing, demos, and feedback collection. This type of market research is invaluable for generating ideas related to product differentiation — identifying unique qualities that set your product apart in the marketplace. Engaging with focus group participants on questions and showcasing services allows businesses to refine and enhance their offerings based on direct user input.
- Product/Service Use Research
This research delves into understanding how and why your audience uses your product or service, examining specific features and gauging usability for the target audience. According to a 2020 report, usability testing received the highest rating in terms of usefulness for discovering user insights, highlighting its significance. Insights from this research provide valuable information for improving the overall user experience and tailoring offerings to meet customer needs effectively.
- Observation-Based Research
Observation-based research allows businesses to observe how their target audience interacts with their product or service. This method provides insights into user behaviors, successful aspects of user experience (UX), encountered roadblocks, and areas where improvements can be made for enhanced usability and application. This observational approach offers a comprehensive understanding of user engagement, guiding refinements for a more user-centric product or service.
- Buyer Persona Research
Conducting buyer persona research provides a realistic understanding of your target audience. It delves into the challenges they face, the reasons they seek your product or service, their expectations from your business, and more, offering valuable insights for effective marketing strategies.
- Market Segmentation Research
Market segmentation research involves categorizing your target audience into distinct groups based on specific defining characteristics. This approach allows you to tailor strategies to meet diverse needs, comprehend pain points, understand goals, and establish effective communication for each segment.
- Pricing Research
Pricing research provides insights into the market landscape, revealing the pricing of similar products or services, the expectations of the target audience, and the optimal price point for the product or service. This information forms the foundation for defining a competitive and fair pricing strategy, ensuring alignment with market expectations.
- Competitive Analysis
Conducting competitive analyses offers a profound understanding of the competitive landscape within the market and industry. Businesses can discern successful trends in the industry, understand consumer preferences among products similar to theirs, identify competitors to benchmark against, and strategize ways to distinguish themselves from the competition.
- Customer Satisfaction and Loyalty Research
Research into customer satisfaction and loyalty explores strategies to encourage repeat business. This includes understanding what motivates customers to return, such as loyalty programs or exceptional customer service. Utilizing tools like CRM systems for automated customer feedback surveys enhances the process of gauging satisfaction and loyalty.
- Brand Awareness Research
Brand awareness research sheds light on what your target audience recognizes and knows about your brand. It delves into the associations they make with your business and the perceived values associated with your brand, providing essential insights for refining brand positioning.
- Campaign Research
Campaign research involves analyzing the success of past campaigns among the target audience and current customers. This process requires experimentation and a thorough examination of elements that resonate with the audience. By identifying successful components, businesses can tailor future campaigns to align with audience preferences and emphasize aspects that matter most to their customers.
The Crucial Role of Market Research in Vietnam
With a population of 98 million consumers spread across 27 million households, Vietnam presents a vast market landscape. However, its diversity is evident in various segments, including geography, needs, beliefs, brand preferences, and income levels. Successfully launching a new product or service in Vietnam requires a nuanced understanding of the target consumer, their current behaviors, and beliefs. Market research becomes a critical tool in identifying viable consumer segments in terms of volume and expenditure, determining where a business and brand can thrive.
For a foreign entity seeking secure entry into Vietnam, comprehensive due diligence on potential market entry firms is paramount. Ensuring these firms possess the necessary permissions, facilities, staff, and financial resources is essential. Seeking the assistance of legal experts can facilitate connections with reliable market research partners in Vietnam, paving the way for a more informed market entry.
In the dynamic Vietnamese market, market research serves as a prerequisite for enterprises aiming to capitalize on the nation’s economic boom. Thorough research empowers investors to navigate the ever-changing market landscape and adapt their business strategies promptly. Identifying market trends is not just about staying competitive but also about maximizing profits. To achieve this, collaborating with a trustworthy consultancy is crucial, aligning with the need to define the specific information sought.
Need help with Market Research for your business? Find out our Market Research Services in Vietnam now!
Guide to Executing Effective Market Research
- Step 1: Identify Your Research Topic
Begin by defining your research topic. Possible areas of investigation could include product features, product or service launches, understanding new target audiences, refining existing audience profiles, brand identity, marketing campaign concepts, and customer experience.
- Step 2: Draft a Research Hypothesis
Formulate a research hypothesis as your starting assumption. Since disproving a negative is often easier than proving a positive, craft a negative statement, such as ‘price does not affect brand perception.’
- Step 3: Determine Effective Research Methods
Select research methods based on factors like budget, time constraints, and the nature of the questions you aim to answer. A combination of surveys, interviews, and focus groups can provide a blend of qualitative and quantitative data.
- Step 4: Decide on Data Collection and Analysis Approaches
For primary research, dealing with a substantial amount of data can be overwhelming. Utilize tools that simplify data analysis, particularly with the increasing trend of brands handling their research in-house. Technology-driven solutions streamline the process and highlight crucial information for informed decision-making.
- Step 5: Conduct Your Research
Execute your research using platforms like Qualtrics CoreXM with the following stages:
– Pre-launch: Ensure that surveys or other research methods align with project specifications.
– Soft launch: Collect a small portion of data to verify functionality and address any data quality issues.
– Full launch: Once satisfied with the pre-launch phases, proceed with the full-scale data collection.
– Review: Scrutinize data for issues or low-quality responses, and if necessary, remove them to maintain data integrity for analysis.
Current Vietnamese Market Trends (2023 Update)
Food & Beverage Industry
As of 2023, the Food & Beverage industry continues to play a pivotal role in Vietnam’s economic landscape. According to data from the Ministry of Industry and Trade of Vietnam, the country’s annual consumption of food and beverages contributes to 15% of the GDP, showcasing consistent growth. Presently, Vietnam’s domestic food and drink sector holds the lion’s share in the consumer market, reflecting the significance of this industry in the country’s economic makeup.
Statista reports that in 2021, the revenue generated by the Vietnamese Food & Beverages segment was projected to reach US$559 million. With a vast market encompassing 93 million people, over half of whom are under the age of 35, Vietnam stands as a promising hub for the food and beverage sector in Asia. This demographic composition creates a fertile ground for market expansion and innovation.
Projections indicate that in 2021, Vietnam’s growth rate in food and beverage consumption is expected to rank third among all Asian countries, further solidifying its position as an emerging leader in the industry. The continuous growth of this sector not only underscores the evolving consumer preferences within Vietnam but also signifies the immense potential for businesses to tap into this dynamic market.
Read More: Food & Beverage Industry in Vietnam: Market Overview and Investment Opportunities (Updates 2023)
E-commerce Trends
The E-commerce landscape in Vietnam is experiencing rapid evolution, supported by the continuous refinement of relevant laws and regulations. According to a report from Statista, the revenue in Vietnam’s E-commerce market is anticipated to soar to US$7,010 million in 2021, underscoring the robust growth trajectory of online commerce in the country.
Delving deeper into market segments, the same report highlights that Electronics & Media constitute the largest segment in Vietnam’s E-commerce market. With a projected market volume of US$1,843 million in 2021, this sector stands out as a significant contributor to the overall growth of E-commerce in the country.
Read Related: A Look into Business Opportunities in E-commerce in Vietnam
An Emerging Digital Economy
Vietnam’s digital economy has achieved a remarkable scale, reaching an astounding US$21 billion, as per the latest report from research firm Cimigo. Even more impressively, Google’s projections indicate a substantial leap, forecasting that the digital economy will soar to US$49 billion by the year 2025. This foreseen growth represents a twofold increase within a mere three years, signaling a dynamic and rapidly expanding digital landscape in the country.
Key sectors anticipated to experience substantial advancements include:
- Software & IT Consulting
- Digital Services
- Industry 4.0
- E-commerce
- Information Services
- Tech-based Agriculture
Top 8 Companies to Conduct Market Research in Vietnam – 2023 Update
Here are a few reputable market research firms that have been known for their expertise in the Vietnamese market.
- Orissa International is a strategic partner for businesses seeking expansion into key Southeast Asian markets, which include Singapore, Malaysia, Thailand, Indonesia, Vietnam, and the Philippines. What distinguishes Orissa from its competitors is its specialized local knowledge within the Southeast Asian region.
- Milieu Insight stands as the premier full-stack consumer research and data analytics company in Southeast Asia. It is renowned for its excellence in delivering valuable insights and market research data to brands and businesses. Its operations span across key Southeast Asian countries including Malaysia, Thailand, Singapore, Indonesia, the Philippines, and Vietnam.
- Founded in 2002, Cimigo has emerged as a frontrunner among market research firms, particularly in the vibrant markets of Vietnam and Indonesia. With a dedicated team of over 120 research experts, Cimigo is at the forefront of providing businesses with unparalleled market entry research services in areas such as financial services, healthcare, automotive, retail, healthcare, education, etc.
- YCP Solidiance with 17 offices in Asia, North America, and Europe, is a strategic consultancy firm. These offices are a unit of the YCP Group, whose journey began in the year 2006. With extensive experience and technical skills in a variety of sectors, they help customers in making sound business decisions.
- Nielsen Holdings Inc. is an information, data, and market measurement giant based in the US, with a presence in Vietnam. The firm is currently a part of the S&P 500. Listed on the New York Stock Exchange, it provides the media business with the most precise knowledge by tracking audience preferences across all channels and platforms, such as social media, podcasts, and streaming TV.
Read More: Top 8 Companies to Conduct Market Research in Vietnam – 2023 Update
How can InCorp Vietnam help with Market Research?
In the ever-evolving landscape of Vietnam’s dynamic economy, market research plays a pivotal role in guiding businesses toward success. InCorp Vietnam emerges as a crucial ally for entrepreneurs and investors seeking comprehensive market analysis and insights.
InCorp Vietnam brings a wealth of expertise in market research, offering tailored solutions to meet the unique needs of your business. Whether you are exploring market trends, evaluating consumer behavior, or strategizing for growth, our team of experts is equipped to provide valuable insights.
About Us
InCorp Vietnam is a leading market entry and corporate services firm in Vietnam. We are part of InCorp Group, a regional leader in corporate solutions that encompasses 8 countries in Asia-Pacific, headquartered in Singapore. With over 1,200 legal experts serving over 15,000 Corporate Clients across the region, our expertise speaks for itself. We provide transparent legal consulting, setup, and advice based on local requirements to make your business fit into the market perfectly with healthy growth.
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