Businesses need 'digital strategy'

Nguyen Quoc Toan’s office is on the 28th floor of Bitexco building in HCMC. He rarely goes out for lunch because he fears traffic jams, dust and smoke. 

Office workers at the building usually order lunch with a food company, priced at between VND30-50,000 per ration, and lunch boxes are brought to them by Grab with the shipping fee of VND5,000-10,000. This is an acceptable cost for a good and convenient lunch, Toan said.

This means that traditional street rice shops and food shops could see their customers leaving. In the past, they enjoyed large custom, but now, digital solutions have changed the game. 

Customer feedback can also come more quickly thanks to mass media and social networks. 

Uber and Grab in Vietnam have been cited by analysts to prove that young brands can knock down giants. 

The app-based taxi firms have declared a war with long-lasting taxi firms and despite strong protests from the traditional taxi firms, Uber and Grab have been developing well thanks to their convenience. 

The higher level of technology is the key to Uber’s and Grab’s success.

Therefore, Toan said if food & beverage companies and retailers cannot adapt to the digital era, they will become ‘dinosaurs’.

Consumer behavior has changed rapidly and information about such behavior is available from many different channels, including mass media, official reports by the government, and market analysis firms’ surveys.

According to Ernst & Young Vietnam, most domestic companies own big data about users, but they cannot use them in an effective way. 

Ernst & Young said there are three outstanding tendencies in personal consumer goods – personalization of customer service, increased competition and increasingly demanding customers, which are forcing retailers to apply an omni-channel distribution method.

In order to exist in the market and protect themselves from new brands, businesses need to have a digital strategy, especially data analysis.

“You won’t need a digital strategy if you only have one or two shops. But if you want to develop a chain, a digital strategy is a must,” Toan, deputy CEO of Ernst & Young, said.

He said that with a digital strategy, business value would increase by twofold. While normal businesses have a P/E of 10-15, the businesses with a digital strategy may have a P/E of 20. 

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