Vinamilk’s success down to understanding of consumers: CEO
Vinamilk’s success down to understanding of consumers: CEO
Vinamilk, the largest dairy company in Vietnam, is looking to conquer the global markets, but its roots are still deeply planted in its home country.
Mai Kieu Lien, the firm's CEO, has set a goal for the company to become one of the top 50 global dairy firms in the next three years.
The goal might sound far-fetched for a dairy company based in a developing Southeast Asian economy, but Lien has cause for hope.
Vinamilk’s products have now reached 43 countries, with US$250 to $270 million in total export revenue.
Since going public in 2003, Vinamilk has seen its market capitalization soar from $103.1 million to a whopping $9.2 billion in 2013, an eighty-eight-fold increase, sitting atop the Vietnamese stock market as the listed company with the highest market capitalization.
To fulfill its global ambition, the company has invested heavily in foreign countries, beginning in 2010 with a $9.1 million investment in Miraka, a New Zealand dairy company specializing in the production of powdered milk.
The dairy giant has also made its entrance into the United States with its acquisition of a long-established California dairy company, Driftwood Dairy, allowing it to gain access to the lucrative U.S. market.
The company has established its presence in Southeast Asia with the opening of a milk factory in Cambodia and is making inroads into Europe with a project in Poland.
Despite her recent success in the international markets, Lien firmly believes that Vinamilk’s success today has its foundation in the early effort to establish itself in Vietnam.
When Vinamilk was founded in 1976, it was not an instant success. The fledgling company, lacking experience, struggled in a country whose climate and geographical condition are not naturally favorable to the development of a dairy industry.
Consumers were more enamored with foreign brands, with their hundreds of years of history and high standards of quality.
In order to compete, Lien and her colleagues are committed to understanding the specific needs of their consumers.
As a result, Vinamilk’s products are not only based on international research, but also tailored to the conditions of Vietnamese people.
One of the products that best exemplifies Vinamilk’s approach is its powdered milk for children.
Before releasing the product, Vinamilk cooperated with the National Institute of Nutrition to perform a scientific study on 50,000 Vietnamese children over a five-year period in order to determine their nutritional needs.
Vinamilk’s carefully researched and relatively inexpensive powdered milk began to gain consumer trust as its market share climbed from eight percent after its release to 40 percent today.
“That is the result of truly understanding consumers, knowing what they need and want, not just making empty promises to improve the health of Vietnamese children,” Lien said.
With potential challenges from international dairy companies flooding the domestic market after the Trans-Pacific Partnership (TPP) comes into effect in 2018, Lien is determined to hold her ground with new technology set to increase Vinamilk’s output and productivity.
Well aware of the challenges of expanding to foreign countries, the prudent CEO is looking to conquer global markets while maintaining a firm foothold at home.
