Survey reveals a gap in product branding

Vietnam may lose national brands after SOEs are sold to foreign investors

The survey released by the ministry reports that a number of Vietnamese products and their brand identity leaves foreign consumers with an unclear impression on the products. This can be attributed to the fact that only 20 percent of domestic businesses spend money on branding.

Many businesses only attach importance to registering a patent for their products and services in the domestic market, but do not register the same patents in overseas markets, the paper added.

As a result, the patent rights for a number of Vietnamese brands favored both at home and abroad such as Trung Nguyen coffee, Vinamit dried fruits, and Biti’s footwear are being disputed in overseas markets.

This has forced many Vietnamese patent owners to pay the price for having a blasé attitude towards brand protection and cost them up to hundreds of thousands of USD through court cases involving suing defendants in order to claim back the rights to a product.

Many firms stick to the view that branding is expensive, wasteful and suitable only for large-scale products, said Nguyen Nhu Quynh, deputy chief inspector of the Ministry of Science and Technology. She cited this view as the reason small and medium-sized enterprises (SMEs) are vulnerable amid stiffening competition.

Quynh further said, "Most SMEs have yet to realize the value and significance of branding. Few have in-depth knowledge of branding. Even many large-scale firms with their valuable brand names have not utilized the privilege in doing business as they do not know how to appraise their brand names”.

(Photo: cafedevin.com)

Long-term branding strategy needed 

Phung Thi Thu Huong, general director of Green Path Vietnam Trading and Import-Export JSC, stressed branding as a means to boost exports.

However, the majority of Vietnamese products shipped overseas are still in raw form, without a brand name attached, Huong said, complaining this is a big weakness needing to be addressed in the near future.

She added, "In fact, Vietnamese businesses have yet to meet requirements related to packaging labels and brand identity set by importers. Hence, the importers buy raw products from Vietnam and have the packaging and code procedures completed for them.”

On export negotiations, Vietnam’s State agencies and businesses need to meditate over the conditions required by importers, Huong warned, noting that export deals should include clauses requiring the importers to keep Vietnamese brands unchanged.

Tran Thanh Hai, deputy head of the Agency of Foreign Trade under the Ministry of Industry and Trade, said that as a big push to branding, Vietnam needs to develop geographical indications to add value to its goods in overseas markets. This would be in addition to the development of logos and labels as well as intensive brand identification which need to be boosted.

Initial focus should be put on building brands for products which Vietnam has a comparative advantage over and also is able to meet large demand for supplies with a good quality and competitive prices, Hai suggested.

Experts emphasized branding as a key factor leveraging Vietnamese businesses to drive fair competition in both domestic and foreign markets.

A wider focus on branding could not only pave the way for exports but also build reputations and brand names within the country. Thus, a long-term branding strategy is needed to narrow the existing gap as well as create added value for the country’s key products.

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