How Vietnamese Businesses Adapted to the Pandemic?

The pandemic erupted unexpectedly, plunging business leaders into an unprecedented year. Anxiety within the business community continuously surged, casting a shadow of uncertainty across all sectors. While everyone knew the pandemic would eventually end, the persistent worry raised a crucial question: What fueled this constant state of unease?

Brand Strength as Business Immunity

What was the foremost challenge of 2020? The answer is not limited to the pandemic alone.

According to Mr. Guo Zhifeng, CEO of Chicilon Media Vietnam, 2019 marked the end of personal and traffic-generated revenue. Now, it's the era of market share battles. “This era is characterized by relentless innovation and imitation, meaning the lifespan of innovation is very short—three months, six months, but rarely beyond 12 months. Therefore, product homogenization is inevitable, especially in consumer markets. In the market share battle, the overall market size remains unchanged, and severe homogenization leads to the second characteristic: most businesses engage in price and traffic wars. Many believe that leading with price cuts will boost traffic, resulting in rampant discounting. Price and traffic wars diminish profits, often leading to widespread losses.”

To maintain free traffic, brands must resonate with consumers. Brand strength can boost conversion rates and enable products to command higher prices than competitors. The key to escaping the vortex of product homogenization lies in product innovation and brand building. Innovation is quickly imitated, so establishing a brand to gain consumer recognition is crucial.

The persistent anxiety among business leaders stems from the fear of losses and diminishing business performance. Yet, it is evident that in this era, the strong remain resilient, and those with sustainable revenue and profit are always the industry's leading brands. Many view brand building as costly without tangible benefits because they have not found the consumer’s mental trigger. An excellent brand strategy not only highlights product advantages but also differentiates significantly from competitors, catering to customer needs, thus creating appeal and common ground with consumers. Without differentiation in consumers' minds, price, promotion, and traffic battles are inevitable.

The pandemic has made businesses realize that brand strength is the corporate immunity; branding enables businesses to prevail in this harsh battle. A brand is a profitable asset, often overlooked in daily operations. This pandemic has demonstrated that a brand is a type of insurance, crucial in determining a business's survival during critical times.

Post-Covid: The Future of Businesses and Consumers

Mr. Guo Zhifeng believes that post-pandemic, leading enterprises and brands will not slow down but rather accelerate their pace.

“Overall, the pandemic has severely impacted the majority of businesses, many facing existential challenges. However, leading enterprises have aggressively countered the trend, expanding their market share. In markets like Vietnam, the consumer market's scale remains unchanged despite the pandemic. The key is whether you seize the opportunity to win or get eliminated, expanding or shrinking your market share.”

The pandemic's impact varies across businesses, altering competitive dynamics and strategies. “Top enterprises aim to widen the gap with lower-tier companies, seizing the market from less competitive businesses and pushing them out. Meanwhile, lower-tier companies with creativity, differentiation, and strong cash flow quietly find ways to rise. The overall trend for all industries is that small companies will exit the market, leading enterprises will invest in market share growth, and the focus on brand concentration will significantly increase.”

Rapid Two-Tier Consumer Differentiation Post-Pandemic

Consumer behavior and trends will undergo significant changes post-pandemic. Struggling small businesses will see reduced consumer spending, with cautious spending among the general public. Consumers will prioritize reliable products. Meanwhile, urban office workers and the middle class with purchasing power will drive the other end of the spending spectrum, seeking products that are not only functional but also aesthetically pleasing, interesting, and healthy. Products must now appeal to consumers' emotions and souls.

Mr. Guo Zhifeng stated, “Those who can see opportunities in risks will always find ways to change market dynamics. Brands aiming for future success must create an impact on key consumer groups. These consumers are the source of ideas, word-of-mouth marketers, and market trendsetters. They define the brand and lead consumer trends in Vietnam.”

Turning brand advantages into mental advantages maximizes brand value. Mr. Guo Zhifeng emphasized that the pandemic will eventually pass, and our task is to prepare for robust consumer growth post-pandemic, winning the brand elimination battle in this ruthless market.