Exploring the Vietnam Market via TAITRA for Taiwanese Chain Brands
Vietnam’s booming economy has attracted many franchisers from the U.S., the UK, South Korea, Singapore, Thailand, Japan, Hong Kong, and Taiwan. As a prime destination for international brands, more and more Vietnamese potential franchisees are coming to Taiwan to participate in the “Taipei International Chain and Franchise Exhibition” held at Exhibition Hall 1, TWTC (Taipei World Trade Center) in spring and fall every year. These events showcase the growth of franchising industries in Taiwan today, inclusive of food and beverage, logistics & transportation, education, laundry, as well as beauty & cosmetics.
With a large sum of foreign direct investment (FDI) targeting Southeast Asian nations, franchising business is gradually altering the lifestyle of the traditional Vietnamese consumer. For example, the increase of career women and inbound tourists has resulted in a wide variety and strong growth of Vietnamese restaurants in recent years. Fast-moving consumer goods (FMCG) such as meat, fruits and vegetables, dairy products, and baked goods now commonly appear in convenience stores and shopping marts. These types of food offer both safety and quality and give the public in Vietnam a choice between traditional and modern retail channels. Local conglomerates such as Vin Group and Saigon Trading Group (SATRA) have also developed their own product and procurement strategies in response to changes in the retail and franchise market. Taiwanese food suppliers like Dai Phat Food and Jia Da Food have entered Vietnam’s food and beverage market. For example, Jia Da Food’s brand product called “Baked Tea, Tra Rang Dajing in Vietnamese” was promoted at the 10th Vietnam International Retailtech & Franchise Show held by TAITRA in Ho Chi Minh City from November 1-3, 2018. In 2019, another Tra Rang Dajing will open in Tỉnh Bình Dương.
Hot weather, a young population, and a rising middle class have all helped to create a favorable market environment for portable and convenient beverages and desserts in Vietnam. Taiwanese brands, such as Presotea, Meet Fresh, and Ten Ren Tea, have been continually expanding their operations via franchising in Vietnam. These Taiwanese brands’ drinks and desserts are all famous for their natural ingredients, high quality, and good taste. Because Vietnam’s franchise market is still new and developing, enormous business opportunities present strong growth potential yet regulation challenges at the same time. Retail and franchising industries in Vietnam are expected to be quite prosperous in the next five years, with international retail groups like AEON, LOTTE, and Circle K building up their retailing chains throughout the country.
Although the Ministry of Industry and Trade has granted 206 franchising licenses for foreign brands in Vietnam since 2007, franchising businesses are still facing some tough issues to overcome. Many Vietnamese people are used to buying their necessities from traditional grocery stores. It takes time to change the shopping habits of citizens living in rural areas outside of the big cities and in the countryside. Potential franchisors that want to enter the Vietnam market still need strong local support and professional teams in finance and interpretation. Labor training and product quality are also the focus of consumers when discussing franchising brands on social media. Moreover, laws and regulations on intellectual property for brands must be made a lot clearer to local market competitors and shoppers.
TAITRA actively provides overseas marketing assistance and platforms for Taiwanese franchising brands to explore business opportunities in overseas markets. Please visit the website http://events.taiwantrade.com.tw/ for more useful information.