Vietnam is a swiftly growing economy with a strong population of nearly 100 million. According to Luxasia’s Karen Ong, there’s business to be done there and the sky is the limit.
Ong is currently Luxasia’s Regional Managing Director of Singapore, Malaysia, and Vietnam. However, she recently spent some time in Vietnam as its acting Country Manager to ascertain the challenges and access the company’s position in the market as the acting Country Manager
When she began her role in June, it felt to her like taking a step back in time. “In Singapore we take things for granted. We shake on it and we think it’s done and that everyone knows what to do. But there, you have to follow up and chase. There’s a lot of email back and forth. It reminds me of how we used to do business 10 to 15 years ago.”
The relatively young market comes with its fair share of challenges – the trade is still conservative, the talent pool is small and turnover is extremely high.
“It’s still very relationship based, the speed is much slower, and even if you plan way in advance, things may not always execute the way you have planned. The follow up has to be very close and you have to be very prescriptive in the way things want to be done,” said Ong.
Surveying the landscape
In some ways, Vietnam reminds Ong of China in the early days. The notion of self-fulfilment and self-affirmation are not yet prevalent in mind of the average consumer. Instead, they are more concerned about brand recognition, and luxury beauty products are seen as status symbols. “It is still very much big brands focused. People want to use something other people recognise.”
However, after paying close attention to consumers, Ong noticed that there was a young group of consumers whose aspirations are vastly different from the generation before.
“If you go to Ho Chi Minh City today, you’ll see a lot of small cafes, little artsy concept shops, art galleries and bookshops. Artistic culture is predominant in the young people, who are looking for different things – it’s just not translated into beauty yet,” she said.
Like other millennials around the world, young Vietnamese consumers are inclined to social media and social media influencers, some of which have followings of over 400,000.
With strong influence from key opinion leaders, it will not be difficult for Vietnam to catch up on the current beauty trends that exist outside of Vietnam, such as the natural and organic movement, said Ong.
“We are keeping a look out,” Ong said of these trends. “The minute we think they are ready, we want to be the first to bring in some new niched ideas and concepts.”
The beauty stalwart boasts an impressive list of niched beauty brands to complement the enviable luxury offerings it has in its portfolio. Currently, Luxasia has less than 20 brands in Vietnam. Among them are include Burberry, Marc Jacobs, Calvin Klein, Guerlain and Thierry Mugler.
This is just the beginning for Vietnam. Ong revealed that the group is giving Vietnam plenty of attention and investment of resource in order for the business there to reach its potential, which Ong believes is enormous.
“All I have to do is bring in 20 brands every year and I can double the business for the next five years. Even then I still will not be finished bringing in all the brands we have,” she said.
Even then, the company will not have quenched its ambitions in the country. The next step for Vietnam will be to develop new distribution channels, namely, through independent perfumery shops which occupy a significant part of the retail landscape in Vietnam.
Though the market is still small, plans for e-commerce are certainly in the pipeline, said Ong. “It’s not very big, but there’s definitely opportunity. With social influencers, there will be social commerce. I think this will be big, especially since their key opinion leaders are so strong.”
Additionally Luxasia hopes to continue expanding across the country. Right now, its business is mainly in Ho Chi Minh City, Hanoi and other second-tier cities.
“We are not where we want to be yet, but we are headed in the right direction. We are a formidable player and we have big dreams and ambitions,” Ong added.