In the face of new consumer trends, businesses must also adapt to keep the market.
Promotions are no longer the top priority
Mr. Dang Thanh Dinh, CEO of Nerman (a health and beauty brand for men), said that 2 years ago, promotions were the top priority, but now consumers want more added value.
“In the past 3 years, due to the increase in input costs, our products have increased by 30%. Currently, even though the highest promotion is only 5%, Nerman still maintains its top position in its industry on e-commerce platforms,” said Mr. Dinh.
Without deep discounts, Nerman cannot participate in large promotional campaigns. However, the CEO of Nerman realizes that choosing this sales strategy has more benefits, helping the company develop sustainably.
Mr. Dinh said that in general, everyone likes promotions. However, if you keep racing for discounts, it will not be good for both businesses and consumers. Instead, businesses should improve the quality and service of their products to satisfy customers.
“If the product is in the mid-range segment and you keep lowering the price to become a cheap product, it will affect the brand positioning. More importantly, customers who buy the product before the discount will feel cheated when they buy it at a higher price and lose trust in the brand,” analyzed Mr. Dinh.
At a recent workshop held in Ho Chi Minh City, Ms. Naree Nguyen, Director of Business Development for TikTok Vietnam, said that Vietnamese consumers are increasingly prioritizing value over price when shopping. This perception is based on a study carried out by Accenture in the markets of Indonesia, Japan, South Korea, Thailand, and Vietnam.
A livestream promoting Nón Sơn products
The report emphasizes a significant change in consumer behavior when 79% of respondents were influenced by non-promotional content. On average in the region, only 21% of users were affected by promotional programs when considering buying decisions. Consumers are increasingly shifting their focus to product value, replacing price and promotion-centered topics as before.
Given this change, TikTok representatives recommend that brands need to change their approach to better suit consumer psychology. Instead of focusing on resources to compete for promotions, brands need to invest in improving the product introduction content to make it more intimate with users. “Online shoppers rely on instincts rather than being impulsive, and they listen to other consumers to make purchasing decisions,” added Ms. Naree Nguyen.
More added value is needed
Mr. Nguyen Manh Tan, Marketing Director of Haravan (an e-commerce and retail solutions company), said that with e-commerce, discount promotions are indispensable.
“In difficult economic times, consumers always have to calculate to save costs. There are many consumers who choose a series of products that must be pre-purchased in the shopping cart and wait for the promotion day to apply a discount code to get the lowest price. If the product has quality and equivalent service, the seller with a lower price will be chosen,” said Mr. Tan.
This means that consumers are increasingly demanding about the products they buy. Online businesses and sellers must be more professional to have optimal costs in order to offer the best prices for users.
Mr. Phan Minh Thuc, co-founder of Ba Thuc Food Company Limited, commented that apart from promotions being the default, consumers tend to want more added value (gifts, after-sales service, customer care…). To attract customers, businesses often change the accompanying gifts for customers.
“We specialize in specialty regional food and OCOP products, and these product groups have many entities because they do not know how to calculate costs, therefore, they set low selling prices. We are investing in the product story, changing packaging, and improving quality to contribute to increasing the value and selling price of products,” said Mr. Thuc.
Mr. Nguyen Ngoc Ty, CEO of Nón Sơn Fashion Company Limited, said that for Nón Sơn’s customers, the decision to buy is based on trust in the brand and quality rather than promotional programs or discounts, which are just catalysts to stimulate demand.
“On current online sales channels, I see that competition for discounts is still the main focus. There are still many stores selling counterfeits and low-quality products, so they have low prices. Nón Sơn opened a store on some e-commerce platforms, but such platforms still allow fake Nón Sơn sellers to exist. We are having a hard time dealing with these stores,” Ty complained.
Many consumers continue to reduce shopping
In the context of the economy recovering, a recent survey by the High-Quality Vietnamese Enterprises Association nationwide showed that 40% of respondents stated that they will continue to reduce shopping. Meanwhile, 30% of respondents said they will slightly increase their spending and 30% will maintain their spending in 2024 as in 2023.
Therefore, the High-Quality Vietnamese Enterprises Association believes that businesses will continue to face difficulties in winning consumers in the first 6 months of 2024. To overcome this, in addition to maintaining good-quality products, businesses need to reconsider their strategies and apply new business models and technology in sales.
