Opinions sought by VET confirm that retailers need to give a great deal of thought into how to best approach Millennials.

Mr. Marcin Miller, Director, Boston Consulting Group (BCG) in Vietnam

Vietnamese Millennials are a very demanding group of consumers and it is very difficult to win their loyalty. They increasingly look for brands and products they can identify with. Whether they buy instant noodles, yoghurt, or even bottled water, just offering them a high quality, standard product at a good price is not enough anymore. The FMCG market will see a lot of product innovation in the future and increasing marketing expenses. 

You can already see that some companies invest in forging close relationships with celebrities to endorse their products and transform basic needs into a lifestyle offer they want their clients to choose, for example Vifon’s campaign with Miss Universe H’Hen. At the same time, around 90 per cent of Millennials can still be described as “deal hunters”, and across all categories around 60 per cent are very open to switching brands. That does not make the challenge easier for incumbent FMCG firms, but on the other hand it also offers a good opportunity for some new market entrants, especially MNCs, that are still not in Vietnam.

Another factor shaping the future of the market is the greater influence of digital on consumer buying patterns, which is especially visible with Millennials, who are more digitally-influenced and tech-savvy than average consumers. Around 25 per cent of all purchases in Vietnam are currently “influenced by digital”, and for Millennials that figure is closer to 30-40 per cent. Consumers research online before buying products and rely more and more on social media and recommendations to decide which product to choose, even for basic categories. 

A good example of an FMCG category that is already gaining a lot of traction in online retail is beauty products. More than 20 per cent of Vietnamese consumers research online before making a purchase and more than 15 per cent are purchasing online. That number will grow further, fueled by attractive online offers and the increasing penetration of digital payments and credit cards, as the penetration of credit cards among Millennials is currently at around 10 per cent, or two to three times higher than the market average. 

Mr. Laurent Levan, Chairman & CEO, URC Vietnam

Gen Y is described as digital and tech-savvy, with an interest in discovering new products and catching up with global trends. They are open to trying new things and easily become loyal customers if the brands meet their needs, both emotional and functional. They have a preference for brands that offer better health and wellness and also credible and authentic brands.

Millennials want to affirm their personalities and they tend to choose products that represent them. They are outdoor oriented, preferring convenience and easily accessible touchpoints where they can purchase and consume. They are willing to go premium, which is an opportunity for brands who offer better quality experience. These are both opportunities and challenges for enterprises when launching new products or marketing strategies.

Brand owners need to re-think and innovate in order to adapt to the GenY mentality and habits. It’s important to ensure baseline attributes such as good taste, reasonable affordability, and safety, which are universal attributes for all generations. But beyond these, Gen Y will demand much more. Brands have to be relevant to their aspirations to experience life vicariously. They don’t just consume products. They consume “experiences” and will patronize brands that can be relevant to these moments. 

Mr. Thue Quist Thomasen, Founder, Decision Lab

There has been a tendency towards market saturation. According to our Foodservice Monitor, the contribution to the out-of-home F&B market from Generation Y and older generations have remained stagnant, while Generation Z increased their visits by roughly 26 per cent in 2018 compared to 2017. 

With recent developments, companies and brands should look into new avenues for growth. Strategies could include reaching out to untapped consumer groups in rural areas, product premiumization, and exclusive collaboration with expanding e-commerce platforms. FMCG corporations can utilize e-commerce to better approach Millennials consumers. E-commerce behaviors have changed dramatically over the last few years and can be perceived as an effective channel for FMCGs.

Not many goods, however, are being sold effectively online and conversion rates are low. We found that only 6 per cent of packaged goods buyers have purchased the product from an online channel in the past three months. Challenges to improve this channel lie in product quality, ease of payment, delivery time, and value deals.

Right now, the need for speed in innovation is crucial for companies in Vietnam. As Vietnamese consumers are getting more choices and are armed with easy access to information, they are also refining their selections. For other countries, like Japan or South Korea, FMCG products’ shelf time is short and stocks are usually limited to around a few weeks. This requires brands speed up their innovation process. Traditionally, this has not been the case for Vietnam, but the situation has changed in recent years as convenience stores became popular. 

Ms. Nguyen Thi Hong Trang, General Director, GS25 Vietnam

Millennials account for 35 per cent of Vietnam’s population, or 33 million people. Being a large force and one of the most powerful groups in the social structure, Millennials have become the top concern for many brands in all industries, especially the retail sector, like GS25.

Today, Millennials often interact with brands through social networks. They spend a lot of time surfing social networks and interacting with brands. It seems that the brand name is not the first priority in the choice of Gen Y, while quality and an ability to meet their needs are the deciding factors.

Gen Y likes convenience, quick and integrated services, and new experiences, so are more suited to modern business models such as convenience stores. 

Mr. Ted, General Director, Miniso Vietnam

With the rapid evolution of technology and the internet, consumers are changing their thoughts, perceptions, and behaviors, especially Gen Y. Today’s thoughts will not be the same as yesterday’s, and today’s behaviors may be different from before. As such, existing brands and products could find themselves obsolete and off the shelf if they don’t adapt and evolve too. Moving fast to understand and capture changes in Millennial consumer demand is crucial for any business to grow sustainably.

As these customers account for 36 per cent, according to Kantar Worldpanel, they have been the focus of many consumer brands in recent times, paying attention to their needs, interests, experiences, lifestyles, and thoughts. That they prefer different ways of being free, liberal, and masters of their lifestyle has been the message presented by many FMCG brands towards Gen Y.

They’ve recently become the largest generation in world history and are therefore set to be the largest spenders. When you think of their current spending and then their lifetime potential spending, it’s a no-brainer as to why brands are rushing to get in front of the market.

They are the social generation; social media is embedded into almost every aspect of their life. As a result, they are much more inclined to seek opinion and feedback online, while also taking to social media to share their purchases. Electronic word-of-mouth is a powerful marketing tool among Millennials that FMCG brands will hope to exploit.

There’s a myth that Gen Y has a short attention span and just flick between brands looking for the best offers, but they are actually surprisingly loyal. Gen Y rates loyalty rewards as the top incentive they look for when exchanging personal information with marketers, and nearly half of Gen Y in Vietnam are willing to promote products and brands through social media in exchange for rewards. 

Mr. Soren Bech, General Director, RB Health Vietnam

Millennials in Vietnam focus more on healthy living and quality nutrition. They are the point of market entry consumers for many of our categories. Their different motivations and behaviors are shaping and influencing the way we market our brands and products, for example our new e-commerce channel.

The dominant behaviors of Millennials are digital and mobile driven. Capturing this, RB has been putting more priority on and investment into digital. Highlights include Enfa Facebook live streams with child and nutrition experts and Enfa and Durex social content on hot topics and events. Apart from this, a thorough digital ecosystem has been designed, capturing all stages of the consumer journey to enhance brand awareness, understanding, and purchasing. We are also building our digital platform and e-commerce capability to capture more Millennials in the future.