State of the Nation: Vietnam ad industry responds to changing consumer wave

The 2020s, with the intense competition calling for deeper consumer connection and purposeful brand building, opens a vast potential for the new golden age where advertising is genuinely alive with memorable brand stories via the power of creativity.

Technology breathes a new wind into behaviors that make advertising change.

In the era where digital is a must, digital-centric is no longer the new trend, but minor brands can do to connect with Vietnamese consumers. Social platforms are now competing toughly for users’ attention in a short attention span world. The most notable example is the emergence of Tiktok, which entirely changed how people consume content on social platforms. At the same time, Facebook and Instagram launched Reels, and YouTube developed YouTube Premium to respond to the competition. This "indulges" consumers, as they are demanding more for the content: brands have only seconds to win an impression with the young consumers (We Create Content, 2022), and they switch continuously on at least four social platforms (DecisionLab, 2022), between various forms of content, from short videos, comedies, short films to blog posts. Going digital is no longer an option: brands now emulate others at building mass social presence and implementing campaigns through multiple formats not to be left behind.

Besides the competition of social platforms, brands shall be mindful of the race among advanced technology and the race between technology and the human brain. The 2020s era marks the thriving of technology, with the AI changing how brands do advertising. AI tools such as ChatGPT, NotionAI & MidJourney have started to play an essential role for brands, especially within the content & creative process - the territory once thought can only be tapped by humans. Brands now also consider utilizing innovative technology in the context of content consumption to generate mind-blowing experiences for customers. For instance, Lay’s recently launched the “Lay’s Crispy Subtitle” extension, turning binge-watching expertise to the next level, using the power of AI & Chrome Extension to turn on the subtitle whenever hearing consumers eating snacks automatically. This implies that brands can be creative in unlocking the unlimited potential of technology to blend in with the content consumption behaviors of customers and create more impactful campaigns that drive remarkable results.

All these technology-led events result in a massive shift in how Vietnamese consumes content. The overwhelm of content made by humans & AI, accompanied by consumers' shorter attention spans, means that unique content with interesting messages can nail inside the consumer's mind. The high competition on social platforms goes with the overwhelm of influencer images, reviews & surrounding news, which means everything is brought to light. Consumers know it all: they start to be skeptical about the validity of influencers' Point-of-view and shift their faith to those who expose their realness & personality on social media.

The lesson? It's no longer the time when there'll be a formula for successful content and campaigns. Squandering money on KOLs & Facebook means almost nothing to consumers in this era. Brands need a proper understanding of the consumer journey and the technology to deliver suitable actions. Beyond all opportunities & the uncertainty that technology brings to the world, brands should learn to build their brand in a structured and long-term way while keeping updated regularly to keep the brand image relevant to the audience.

Brand purpose is now a must-have

After the pandemic, Vietnamese consumers' growing health and sustainability awareness has significantly impacted their purchasing behavior. According to a study in 2021 by Kantar Worldpanel Division, Vietnamese consumers gave the health sector the most significant thought. As a result, they now prioritize brands that align with their values and promote a healthier and more sustainable lifestyle.

This trend towards healthy & sustainable lifestyle has made it imperative for businesses to adopt a purpose marketing strategy that goes beyond mere product and services promotion to reinforce further the company's values, and social and environmental responsibility, thereby fostering customer loyalty and driving sales whatever ups and downs the brand may hit unexpectedly.

This can be seen in the cases of some FMCG brands in Vietnam innovating their products better to suit the "healthy" demand of consumers: The introduction of Vinamilk Green Farm environmentally-friendly product line made from 100% pure fresh milk from healthy dairy cows raised at Green Farms – Vinamilk's eco-system farms.

Some brands go even further with initiatives and activations that bring them closer to the community: Highlands Coffee refreshed its logo and unveiled the new brand promise “Highlands Coffee® Is Ours” to enforce its mission as a hub of the community that enriches human connections and social togetherness. Or in the case of Nivea, the brand launched the Tailored Care project to provide a newly designed fabric invented from the NIVEA Creme tin aluminium packaging to make the traditional clothes of the tribe winter-proof. All those campaigns, however different in scale, contribute to the Vietnamese community development while successfully integrating brand image with purpose, thus fostering sustainable consumer relationships.

The rise of Sustainable e-Commerce.

Vietnam's e-commerce industry is shifting towards sustainability as consumers are becoming more discerning, seeking refined experiences and high-value products instead of hunting discounts relentlessly. The E-Commerce Industry 2023 Report shows that 57% of Vietnamese users stop buying products or services that hurt the environment or society. This shift towards sustainable e-commerce is reshaping the industry and benefiting both businesses and consumers.

The significant driver of such sustainability tendency lies in... emerging young Viet consumers – mainly Generation Z. Gen Z consumers in Vietnam are growing in size and influence and are highly aware of environmental problems. Data from Decision Lab has shown that their perception of environmental issues' importance is higher than other generations (73%). This preference for sustainability has led Gen Z to raise their voices to boycott "unsustainable" marketing schemes. Some beverage brands in Vietnam used to be accused of greenwashing, receiving scathing online criticism for their heavy dependence on single-use plastic cups and straws.

However, according to the Decision Lab report, the percentage of Gen Z believing that sustainability is the duty of corporations in Vietnam is lower than other generations (67% compared to 79%). Instead, such young consumers emphasize individuals' role in environmental protection. This emphasis on individual responsibility has encouraged brands to roll out purpose campaigns involving consumer participation instead of merely taking the whole part of campaign activation.

Brands seeking to thrive in the Vietnam market must stay abreast of technological advancements and utilize this current golden age of advertising to maximize their reach and impact. It is also essential to remember that a brand's core value and purpose are just as critical as sales and performance. Businesses must prioritize ethical and sustainable practices that are purposefully vital to consumer minds in the long run. Merely focusing on sales and profits can lead to a loss of authenticity, trust, and, ultimately, customers.

Linh Nguyen, is the strategy director at Happiness Saigon, a creative consultancy agency.