Vietnam - Trade Promotion and AdvertisingVietnam - Trade Promotion
Advertising remains heavily regulated by the Vietnamese government. In principle, only companies licensed in Vietnam may place advertisements. Advertisements for tobacco and liquor (excluding beverages with alcohol content below 15 percent by volume) are prohibited in the mass media. Advertising for pharmaceuticals, agrichemicals, cosmetics, and toiletries require registration and approval from the appropriate ministries, while the Ministry of Culture, Sports and Tourism must approve all advertising content. Arbitrary enforcement and interpretation of the regulations continue to hinder the development of the advertising industry. Limits on advertising and promotional expenditures exist for companies, and are tied to a percentage of total sales. The government’s current regulations essentially prevent domestic enterprises from investing more than ten percent of their total spending on advertising.
According to the Vietnam Advertising Association (VAA), the country now has more than 4,000 domestic ad companies, with the majority operating in Ho Chi Minh City. Vietnam hosts over 30 representative offices of the world’s leading advertising companies, including WPP plc, J. Walter Thompson (a subsidiary of WPP), Dentsu, Omnicom, Interpublic, Publicis, Saatchi & Saatchi (a subsidiary of Publicis), and McCann. Foreign advertising firms are generally not permitted to directly sign contracts with local media agencies. Instead they must partner with local advertising companies to implement ad campaigns in newspapers or TV commercials.
Many foreign brand managers make heavy investments in television advertising campaigns. Over 90 percent of Vietnam’s urban population own televisions. Nation-wide penetration is greater than 87 percent. There are approximately 60 local and one national broadcaster (VTV). With the emergence of satellite dishes and cable networks, many households also watch international networks (CNBC, CNN, StarTV).
With high internet penetration and ubiquitous smart phone usage, Vietnam’s young consumer population obtains much of their information via mobile internet. Social media usage is large and growing. Thus, on-line promotion and outreach are increasingly important channels. Vietnamese consumers, especially those under the age of 35, frequently use Facebook, Zing Me, LinkedIn, Instagram, YouTube, and other social networking websites. The largest users are in the 18-24 age groups. It is common to see young Vietnamese people tapping on their smartphones on the street, at home, in the office, restaurants or coffee shops.
The internet has an increasing influence on consumers’ opinions. People carry out online research before buying items, check the latest trends and promotions and share experiences with other people through online forums and social networks. However, less than 60% of internet users shop online and the amount of money they spend is small because most remain skeptical of electronic payment methods. This is unlikely to change until internet security and online banking services improve. Nonetheless, Vietnamese people are keen users of the internet for searching for product information. Therefore, many small businesses use social networking sites to reach a large base of customers. Because of customers’ skepticism of electronic payments, online sellers usually enable cash payment upon delivery. Whether they sell home-made food, clothing and beauty products or electronic gadgets, online stores are popular with many internet users.
A high literacy rate, a surge in new publications, and increased print media circulation all support the print media’s growing popularity as an effective channel for advertising. Regulations place limits on space allocated for advertisements. There are over 400 newspapers and other publications in Vietnam, but few have nationwide circulation. Among the more popular publications are Thanh Nien (Young Adult), Nhan Dan (The People), Tuoi Tre (Youth), and Lao Dong (Labor). There are also quite a few international quality publications in circulation, including Nha Dep (Beautiful Home), Dinh Cao (Sports and Fitness), M (Fashion) and Phu Nu The Gioi (Woman's World), Gia Dinh & Tiep Thi (Family and Marketing). These latest publications are setting new standards for the quality of publishing in Vietnam. English newspapers and publications include the Saigon Times Daily, Vietnam News, Vietnam Economic Times, Thanh Nien English News, and Vietnam Investment Review.
Outdoor advertising ranges from billboards and signboards to public transport, building walls, bus stations, and wash and service stations, among others. Firms should confirm that the advertising agency has proper permits to lease the space. For example, billboard advertising in Ho Chi Minh City is restricted to the vicinity of the airport (per Circular 19/2013/TT-BXD dated Oct. 31, 2013). Advertising on articles such as umbrellas, scooters, etc. does not require a permit; however, it must comply with advertising regulations.
Radio advertising is perhaps not as widely used for product promotion, but radio ad volume is growing. This is largely due to improvements in programming, such as the inclusion of English lessons and international music, along with the standard selection of Vietnamese pop music. Today, the audience represents a cross-section of the population with increasing buying power. There are many local and one national broadcaster, Voice of Vietnam (VOV).
Trade fairs are numerous and cover a broad range of sectors, and are generally becoming a more attractive and sophisticated method for product promotion and industry networking. Many exhibitions are co-sponsored by government ministries, State Owned Enterprises, and industry associations. Common venues are the Giang Vo Exhibition Center, the National Convention Center, and the Viet-Xo Cultural House in Hanoi. In Ho Chi Minh City, the Reunification Palace, international hotels, the Ho Chi Minh City International Exhibition and Convention Center, and the newly opened Saigon Exhibition and Convention Centre (SECC) are the main venues.
Vietnam Trade Development and Promotion