Competing with a Personal Touch

WHEN looking at the Vietnamese cosmetics and personal care sector, it’s not hard to see that it’s a very competitive industry indeed. According to industry sources around 80% of the country’s market share is controlled by foreign-owned companies, which makes it difficult for the local companies to compete against the innovative marketing and distribution strategies of the big overseas brands. Yet there are a handful of local SMEs that are finding success – including one company that developed their own marketing and distribution strategy for over five years, and in that time created a niche market for themselves based on the exclusive distribution of their own products, as well as a couple of Korean brands. All their products are marketed using a very personalized client service strategy.

 

“Nhan Sac Viet” is a company that is unique in the sense that their mission is to build their brand through understanding the individual needs of their customers and providing them with the product best suited to their particular skin type. HAPPI Asia caught up with managing director, Nguyễn Thi Minh Thu, to discuss the development of Nhan Sac Viet, their products, and the challenges the company faces competing in a very volatile industry. 

 

Could you tell our readers a little bit about your company’s history and what makes Nhan Sac Viet produces and services different from the competitors?

 

Nguyễn Thi Minh Thu: I guess you could say the foundation of the company started around 10 years ago, when I realized that cosmetics and personal care products here in Viet Nam were being purchased by consumers because of the brand name, rather than if they were suitable for their particular skin type. There was always lot of marketing hype and big product claims with the big brands. 

 

The company in its present form was set up in 2009, and the company’s mission was to provide a very personalized service to our customers where we educate and advise them about their own particular skin care needs. From there, we provide them with the most suitable product from our range of Korean products we exclusively import into Viet Nam, as well as the products we develop, outsource and package under our brand. 

 

What are some of the brands that you’re distribution in the Vietnamese market?

 

Mrs. Nguyễn:  We have a number of streams to our business; firstly, we deal in the supply of products to spas which are packaged in larger quantities and for use by skin care professionals. These are all part of our B2B product line, and includes cream and lotions for acne and whitening treatments, etc. We also have our own brand, ‘Nano Sphere’, which we outsource to our specifications to a Viet Nam-based manufacturer. This product range comprises of acne treatments, various whitening products and collagen creams. 

 

We also have a retail focus to our strategy where we use the services of other distributors to reach a larger audience through a larger number of outlets. The Korean product range for which we are the exclusive Vietnamese agents for, and that we market to our retail sector are brands such as SURE, which manufactures high-end cosmetics; SURE also forms part of our B2B product line. LIBERTY is another of our product range from Korea; they are succalso manufacturers of cosmetics as well as products using stem cell technology.

 

Is there any particular reason you focus on Korean product instead of American or European brands?

 

Mrs. Nguyễn: I found over the years that each country had certain strengths with their products, such as the US brands where they produce some great skin recovery and rejuvenation treatments and products. However, for general maintenance, I don’t find the American products suitable for the Vietnamese skin, and also remember, our weather here in Viet Nam is harsher with regards to heat than America or Europe. For general maintenance I found the Korean, Japanese, and some German bands are best suited to the oily skin of the Vietnamese.

 

Nhan Sac Viet distributes Korean brands, such as DMCK, which it finds are more suitable to Vietnamese skin type and environment

 

With foreign-owned companies taking a big 80% share of the Vietnamese cosmetics and personal market, what is Nhan Sac Viet’s competitive strategy? How do you compete?

 

Mrs. Nguyễn: I guess it’s the same as any business trying to sell products and services. You need that special angle, a special way of doing your business, that something that makes you stand out from your competitors. 

 

We started by focusing on our customer relations as one of the factors to success. As with most successful businesses, we don’t want to sell to a customer once; we want to sell to them for life. So we do a lot of direct marketing to a lot of potential customers over a year, and advise them on the best products and programs they should consider for their particular skin type. We like to meet our customers directly, and find this personal, experiential approach gives us that competitive edge. 

 

It’s also important to remember that although the Vietnamese people are attracted to big international brands for the status value, they’re still more attracted to personal service with people they know and trust. Our competitive strategy from the start was to provide quality customer service, professional advice, quality products, and above all, giving the customer what they truly need at a competitive price.

 

Apart from direct marketing as one way of getting your product connected with consumers, are there other marketing strategies you employ?

 

Mrs. Nguyễn: With direct marketing, we do regular promotions where people can sample the products while receiving a specialized treatment from one of our qualified practitioners. Developing relationships and building trust are the key elements to consider when doing business in Viet Nam, and these types of promotions help us greatly with meeting our future customers. We also operate a member based loyalty program, which keeps us in touch with our customers. We do some online marketing with the usual social networking platforms, but at the moment we are more than happy with our supply and demand ratio, and we’ll consider building on that as we start to expand operations.

 

You talk about expanding operation in the future. What is the company’s strategy in terms of growth?

 

Mrs. Nguyễn: If you look at the business we’re in, it’s easy to see that it’s based on a great deal of science. So if I was looking at the long-term strategy of the company, then I would say to create a center focusing on R&D. Over the years I’ve built up a great deal of knowledge on most of the products presently on the market, so we’re presently looking at the feasibility of developing a superstore concept providing a large number of brands, as well as treatment, spa areas, under one roof. But that plan is still in its early stages of development and evaluation. We’ll continue to expand our retail stream, and develop more products under our own brand name, which should keep us busy over the next few years. 

 

What do you see as some of the challenges facing the industry in the future?

 

Mrs. Nguyễn:  Branding and technology. The foreign companies know how to develop brand loyalty, they know how to seduce consumers and keep them loyal. It seems sometimes that the Vietnamese companies are still standing at the gate while all the other players are in the race. Local companies need to start looking very seriously at how they market their product and connect with the consumer. Technology is always an issue for manufacturers. Investment into technology doesn’t come cheap, but if manufacturers are to compete against the foreign companies with quality they will have to spend the money on the technology and R&D. 

 

Distribution is also a very difficult area to navigate, and this is another area where the foreign companies seem to have dominance. So in answer to your question, there are many challenges facing the industry in the future, which is why Nhan Sac Viet’s strategy is based on developing customer brand loyalty through direct contact with consumers. There’s no way we could compete with the major brands in either marketing or distribution, we just simply couldn’t afford it, but the cosmetic and personal care market is big enough to accommodate a large number of player, and we found our niche.