Oversight of brand issues undervalue Vietnamese firms
Oversight of brand issues undervalue Vietnamese firms
Brand matters have not received the due consideration they deserve from local companies, which consequently lead to the country’s brand value devaluation.
According to Brand Finance, an independent intangible asset valuation consultancy, Vietnam’s brand has fallen 18 per cent in value compared to 2014, standing at $139.5 billion and ranking at 49th amongst 100 researched countries. Meanwhile, the global brand value has totalled at $7 trillion in 2015, signifying an increase of 11 per cent compared to last year.
In 2014, the country was ranked at 42nd place, with the brand value reaching $172 billion.
The top 10 most valuable Vietnamese brands, according to Brand Finance’s Top 50 Vietnam Brands 2015 report, are Vinamilk, Viettel, Vinhomes, MobiFone, PetroVietnam, FPT, Vietinbank, Vinaphone, BIDV, and Vietcombank.
During the Vietnam Brand Matters: Advance Brand Building conference held in Hanoi on October 14, Samir Dixit, managing director of Brand Finance Asia Pacific, pointed out that the gap between the top 10 leading brands was too wide, evident in Vinamilk’s brand value topping the list at $1.13 billion, while runner-up Viettel was valued at $580 million, followed by Vinhomes’ $343 million.
“The problems Vietnamese brands have to face are domestic, not global,” Dixit stressed, adding that Vietnam’s brand competitiveness was deemed rather weak. “Brands in Vietnam are neither contributing to nor benefiting from the country’s brand.”
“Local companies build their brand by sentiment rather than carrying out proper research, to seek for immediate, short-term profit,” said Nguyen Dinh Toan, marketing director of Masan Beverage. International brands in Vietnam, on the other hand, conduct thorough researches with regards to all their brand matters, and are prepared in advance to face losses in the first few years of operation before making profit.
Nguyen Duc Son, director of brand strategy at Richard Moore Associates, noted that a brand that did not receive the attention and consideration from the enterprise’s top leaders would not be able to establish itself properly. “Leaders, as such, must understand the importance of the company’s brand to act upon it.”
Dixit said that intangibles made up a significantly large portion of the value of an enterprise, yet they only accounted for 38 per cent of the total value of local enterprises. Local enterprises, as such, need to focus more on building their brand, or intangible assets, as part of an attempt to drive the business to success and achieve overall competitiveness.
As a matter of fact, Vietnam’s intangible net assets are far below the global average, making it the second least brand-driven nation in the ASEAN. However, the intangible value has grown significantly over 2013, by nearly 50 per cent, indicating that as tangibles reduce, brands will appreciate in importance and become the critical driver behind business success.
Meanwhile, general director of Microsoft Vietnam Vu Minh Tri said that, “building the brand should always go hand in hand with the core values of a business. The operation and orientation of the business will pave the way for the development strategy of the brand, and subsequently come up with the image and add value to the business’s brand.”
