10 Ways Businesses in Vietnam can Dive into the Country’s Growing Green Market


10 Ways Businesses in Vietnam can Dive into the Country’s Growing Green Market

10 Ways Businesses in Vietnam can Dive into the Country’s Growing Green Market

Green marketing has gone by its share of names: pro-environment, eco-friendly, sustainability-focused, and conscious consumption, to name a few. But what’s not in dispute is that its time has come in Vietnam. Whether as a primary mission or an aspect of corporate social responsibility, companies in Vietnam are taking notice of increasingly engaged green consumers. 

Its growth is due in part to economic factors, as people tend to care more about the environment as they enter the middle class. But it’s also a response to the realities of life in Vietnam. The country faces diminishing air quality,growing droughts, and, in the long term, coastal flooding that threatens to put the homes of millions underwater. Piles of trash, much of it single-use plastic – contribute to urban flooding by blocking city drains and blight the natural beauty of tourist sites, prompting comments at the highest levels of government. Even some of the largest FMCG multinationals are promising to control their packaging here. 

Extensive research has shown that many Vietnamese consumers are environmentally aware, interested in eco-friendly products, and even willing to pay more for them. But these consumers also report that a lack of convenient green options leads them to purchase products they know to be less eco-friendly. The linked study uses the example of instant noodles, a staple convenient meal. Consumers report a preference for biodegradable paper packaging but note that the three largest instant noodle companies exclusively use plastic. Recent surveys have also shown that 82% of Vietnamese want to consume green products, 88% see the trend of green products increasing in the future, and 80% are willing to pay more for them. 

The Vietnamese government is also well aware of the country’s environmental issues. Prime Minister Nguyen Xuan Phuc set a goal of zero disposable plastic in urban stores and markets by 2021, to extend across the country by 2025. While it may seem unfeasible, the message is clear: eventually the social and regulatory environment will change, and it’s better to be ahead of the curve than behind it. The tourist-oriented old town of Hoi An, for one, seems to be taking it seriously, with many businesses already eschewing single-use plastics in advance of the government’s requirements. 

Despite increased awareness, the market for sustainable or “green” products is still underdeveloped in Vietnam, which creates an opportunity for companies to gain a first mover advantage by investing in it early. The trick is acting with an eye for long-term success, which is where the benefits of sustainability tend to pay off. What follows are some tips on how to approach this nascent market. 

  1. Offer a gateway product
    There’s a reason that reusable straws – whether metal, bamboo, or grass – have 
    become symbols of the movement against single-use plastic: they’re easy. Reusable straws show that people are willing to make a change when it is not a major inconvenience to them. And for many people, the act of using items like these puts them in a mindset of thinking about all of the other ways they be less wasteful – which can lead to a snowball effect of more eco-friendly consumer behavior. A wise company will provide solutions for people at several stages in their green development.
  2. Encourage people to display their green cred
    other advantage of reusable straws is especially relevant in the social media age: optics. Instagram is growing in Vietnam, and the image of a bamboo or grass straw has an undeniable visual appeal – and for the moment, novelty – that cheap plastic straws lack. And back to question of social norms, no young influencer wants to face backlash for being anti-environment. These straws have become increasingly trendy in Vietnamese bars and cafes, proving that the PR benefits of adopting an eco-friendly image can more than make up for the up-front costs. While the plastic straw art installation made the problem more visible, the market would welcome a relevant upcycled product like the vinyl records produced by Bacardi Rum and Lonely Whale’s #TheFutureDoesntSuck campaign.
  3. Appeal to people’s values
    In Vietnam, those who value the “happiness” that a product brings them are 
    more likely to choose eco-friendly products. Cultural factors such as a collective mentality and long-term orientation also influence people to make the effort to buy green products. Additionally, Vietnamese consumer behavior is strongly influenced by social norms, in which certain behaviors will eventually reach a tipping point, after which they are reinforced by social pressure (positive or negative). In a study in Hong Kong, it was shown that, for young people, nothing predicts green behavior as well as social influence. 
  4. Harness the power of influencers
    Influencers are
    big in Vietnamand football’s popularity is up there with food and breathing. So it’s a big deal that the government has recruited the Vietnamese national men’s football team in a campaign against single-use plastics. In the same way, local cultural influencers can be a great way of spreading the word about your productsSome even do it themselves; model Helly Tong has leveraged her following to support two environmentally conscious passion projects that encourage a low-waste lifestyleThe Yên Concept – a plastic-free house plant store –and Lại Đây Refill Station – a shop focused on reusables.
  5. Connect with green communities
    As the green community has grown it’s become more diverse, smaller trends within it have created their own vibrant markets. For instance, diet is increasingly seen as a major component of environmentalism in Vietnam, with organic and vegetarian options on the rise beyond the traditional Buddhist fare. The recent Saigon Vegfest hosted representatives from a variety of industries, including food (naturally), cosmetics, health and wellness, nonprofits like the Humane Society and WWF, and even a vegan tour company – all catering to an audience who are engaged and enthusiastic about their lifestyle. That passion is strong characteristic of the green movement, which will reward any business that finds a niche within it.
    The network of local eco- and sustainability-focused businesses and green entrepreneurs is similarly useful, as many of them have created mutually beneficial relationships – such as providing packaging, collaboration, and promotion for each other. This network is built on grassroots efforts, like AYA Cup’s lending program that builds a web of participating restaurants and cafes, and Cocolist.vn which hosts a rapidly expanding index of businesses sorted by the eco-friendly practices they engage in. But some large companies have caught on, too: four Vietnamese airlines are working on phasing out single-use plastics on flights, and at least one (Vietnam Airlines) has connected with a local manufacturer of eco-friendly products to help them with replacements. GrabFood, the popular delivery service offshoot of the country’s largest ride-sharing app, has responded to demand (and criticism) by introducing an Eco-Friendly window in its app for restaurants that use biodegradable packaging. There are now many of these manufacturers in Vietnam, since key materials like bamboo, sugarcane, and even corn powder are available cheaper in Vietnam than elsewhere, enabling a global export market for eco-friendly finished products made in Vietnam.
  6. Educate and call to action
    Insurance company Prudential is working with the non-profit World Wildlife Federation on beach cleanups as a form of education about environmental damage and the responsibility to prevent it. This is a natural fit for any insurance company, which shows an awareness of their market that hinges on people’s quality of life. Many other markets – from manufacturing, to agriculture, to transportation – stand to benefit from an educational approach to raising brand awareness, and creating a clear mission goes a long way to show that your green credentials are more than just greenwashing. As another example, Canon operates recycling stations at its main retail stores in HCMC and Hanoi designed to educate consumers about responsible disposal of electric products, all the while providing the company with materials it can recover and reuse.
  7. Experiment with branding
    The more people make their purchases based on principle, the less brand names matter. Just ask the UK’s Gen Z, 
    only a quarter of whom see brands as important. This means that a product line targeting green consumers need not carry your brand name, and may even be damaged by its inclusion – unless you’re the rare unimpeachable brand like Patagonia. One of the most notable to do this has been Unilever, the Anglo-Dutch packaged goods giant whose “Sustainable Living” brands have become its fastest growers globally – including in Vietnam, where it has realized 30% growth.
  8. Offer tempting alternatives
    It was big news this year when some supermarkets in HCMC 
    started using banana leaves to wrap certain vegetables instead of encasing them in plastic. This form of packaging is attention-getting and appeals to Vietnamese tradition and aesthetics without sacrificing convenience. Bagasse boxes, recycled furniture, and, yes, those natural straws again – all provide a combination of practicality, environmental principles, and aesthetics that many green consumers find irresistible.
  9. Make your green option the default
    It’s easy to excuse taking plastic bags when there is no obvious alternative, but it’s another thing to reject a green option in favor of a more wasteful one. The 
    choice of environmentally friendly products is  a growing trend in Vietnam. Simply making these your standard offering is guaranteed to increase their adoption. Air conditioning manufacturer Daikin’s* new high-end factory in Vietnam focuses on inverter models using R32 refrigerant, which it touts as power-efficient and environmentally friendly, with two-thirds less global warming potential compared to typical R410A refrigerant. By making them its first priority, Daikin has grown the market share of these models to nearly 20% of Vietnamese air conditioner sales.
  10. Be transparent
    Vietnam has suffered several environmental and public health disasters in the past decade, so consumers are understandably skeptical of any company’s claims to safety – their own or their environment’s. It’s also been shown that 
    specificity improves consumer confidence in green claims. Thoroughly back up your green claims, as Patagonia does, displaying honesty and openness regarding areas where you still have room to grow, and you can protect yourself from any possibility of scandal.

*Daikin is a Vero client.