With Vietnam’s economy experiencing expansion, more people are embracing wine consumption. Though the wine market is currently small, there is ample potential for growth.
The country’s wine consumption is projected to reach 13.7 million liters by 2027. This growing interest in wine, along with expected revenues of $229.20 million in 2023 and an anticipated volume increase of 2.5% by 2024, is fueled by the dynamic economy, which has experienced 7% annual growth over the past 23 years, even witnessing a 3% rise during the pandemic period. The expansion of Vietnam’s middle class, which is currently at 15% in a population of almost 100 million, is forecasted to reach 36 million people by 2030, providing more opportunities for increased wine consumption.
Vietnam wine consumption by volume/source country (Source: IWSR reproduced from Wine Australia Market Update: Vietnam)
This article outlines the most successful approaches for international brands to initiate their wine ventures in this burgeoning market.
I. IMPORTED WINES ARE PERCEIVED AS HIGH-QUALITY PRODUCTS
In Vietnam, the alcohol market is dominated by low-cost beer, constituting 75% of total sales. However, the emerging wine sector is being driven primarily by professionals between the ages of 35 and 45, as well as consumers in their 50s to 70s, who are increasingly turning to wine as an alternative to high-alcohol beverages.
Approximately 60% of wine sales in Vietnam occur through on-premises channels. Additionally, businesses purchase wine for the gift market, particularly during the Vietnamese New Year festival, which accounts for up to 70% of wine sales, and as end-of-year gifts for clients and employees.
In 2020, the majority (88%) of wine sales in Vietnam were priced below $10 per bottle. Projections indicate that prices may experience moderate increases over the next five years, in line with domestic spending constraints and economic impacts. Nevertheless, local consumers associate imported wines with higher quality, and those aspiring for quality products are willing to pay more for them.
Locally produced wines constitute 25% of the market and are predominantly sourced from Lam Dong Province in the Central Highlands, home to several large vineyards and wineries, including Dalat Wine City, Vietnam’s largest winery.
Among the imported wine categories, Chilean wines lead the pack with a 25% market share, followed by French wines at 19% and Australian wines at 7%. Italian and US brands trail behind. Red wines are the most popular, accounting for about 65% of the market, followed by whites at 25%, and sparkling wines at 10%.
II. DRINKING CULTURE IS DIFFERENT AMONG REGIONS
In Vietnam, the drinking culture revolves around social etiquette, networking, and business connections. Throughout history, significant distinctions have been observed in alcohol consumption behaviors among people residing in the main regions of Vietnam – the North, Central, and South – each influenced by unique cultural and climatic factors.
In Northern Vietnam, where a humid subtropical climate with cold winters prevails, wine consumers tend to follow trends closely and place great emphasis on packaging, especially for gifts. They exhibit considerable knowledge about various wine brands and favor heavier reds like Shiraz.
In Central Vietnam, characterized by a tropical monsoon climate, consumers are generally less open to trying new wine brands.
On the other hand, Southern Vietnam experiences a tropical climate with high temperatures and humidity throughout the year. Here, the consumers are known for their easygoing nature and willingness to explore new wine brands. They are also well-informed about different wine varieties, and their preference leans towards “softer” reds such as Cabernet Sauvignon.
III. SELL THROUGH LOCAL DISTRIBUTORS
Investors have several avenues to enter the Vietnamese wine market. They can opt to collaborate with a local partner or utilize the services of traders, distributors, or agents. These established market entry strategies offer access to existing consumers, locations, and distribution channels, which are crucial for successful operations in Vietnam’s dynamic and rapidly evolving investment landscape.
Imported wines are widely distributed and sold throughout Vietnam. Leading importers not only distribute wines but also retail them through their chain stores. Online sales companies often import wines and market them under their own ‘home’ brands. Additionally, certain hotels and restaurants import wines for on-premise sales and local distribution. While only a few retailers import wines to sell through their network or online platforms.
Apart from supermarket channels and convenience stores, various chains, including An Nam Gourmet, offer a diverse selection of wines in cities like HCM City, Hanoi, and other major urban centers. Specialty shops like Phuong Ha and Thai Ha cater to both Vietnamese and expatriate communities in HCM City, providing an assortment of wines with different brands
1) Key Wine Importers In Vietnam
Some of the main wine importers include:
- Saigon Alcohol Beer & Beverage Corporation (SABECO) – One of the country’s largest beverage companies, which not only imports and distributes beer but also deals in wine.
- Vietnam National Distribution Corporation (VINATAXI) – A significant distribution company specializing in the import and distribution of wines.
- Vietnam-European Trading & Consultancy Joint Stock Company (VETAC) – A trading and consultancy firm that focuses on importing and distributing European wines and liquors.
- ImpEx Beverages – A wine and beverage importer that deals in premium wines from Chile, France, Italy, and Australia.
- Wine & Spirits Trading Company (WST) – A wine and spirits importer offering premium and luxury wines from France, Italy, and Australia.
2) Retail Wine Outlets In Vietnam
In Vietnam, consumers have various options for purchasing wine from a range of retail and hospitality outlets as well as dedicated wine shops.
3) A Selection Of The Primary Retail & Hospitality Establishments
- Wine Talk – A popular wine retailer known for its wide selection of international wines, including offerings from Chile, France, Italy, and Australia.
- Cellar – A premium wine retailer with an impressive assortment of high-end and luxury wines, featuring premium Champagnes, Bordeaux, and Burgundy brands.
- The Wine Connection – This establishment specializes in importing and selling premium wines from France, Italy, Australia, and Chile, along with wines from the Americas.
- Thien Son Wines – A wine retailer offering a broad range of local and imported wines, encompassing red, white, and sparkling varieties.
- Wine Avenue – This store offers an array of local and imported wines, spanning red, white, and sparkling options, as well as premium and high-end selections.
IV. HAVE A WEBSITE TO BUILD TRUST
Create websites specializing in regional cuisine and wine culture, write Pr articles and cleverly include articles about the products being sold with contact details. You can also write blog-style articles to share more about Wine.
Make sure your website is optimized for search engines (SEO). Research wine-related keywords and use them in website titles, descriptions, and content. Optimize URL structure, page loading speed, and Meta tags for good performance on search engines to drive organic traffic.
V. LEVERAGE SOCIAL MEDIA TO ENGAGE CUSTOMERS
1) Intersperse Branding Posts With Other Useful Content
On a Facebook page specializing in the wine business, regularly posting content about wine products is undoubtedly essential. However, in addition to that, you should diversify the content on your page by interspersing other types of posts beyond information about wine products.
So, besides the usual content about wine products, what other information should you share on the Facebook page to make Vietnamese customers more interested? In this case, you can choose to publish events or socially beneficial activities, such as green living, nutritious and delicious recipes that involve wine, and more. In summary, just select useful content relevant to your target customers and somewhat connected to wine products to diversify your Facebook content effectively.
2) Essential Elements In Wine Ads
When creating content for wine advertising on social media, you need to know what essential information should be included. Specifically, below are some crucial details that should not be overlooked in a wine-selling post:
- The strategy of “advertising without appearing to advertise“: Create impressive posts by introducing wine in a subtle and intriguing manner. Focus on selecting delicious wines that suit the preferences and needs of individual customers. Provide comprehensive and skillful information about the types of wine that you are promoting in your business.
- Purchase instructions: Provide detailed information on how to buy wine online and from offline stores. Make it convenient for customers when they decide to purchase your products.
- Quality assurance: Build trust with customers by presenting reliable methods to ensure the quality of your wine products. This may include information about the origin, production processes, or quality certifications.
- Support and consultation: Commit to providing detailed support, and professional advice, and addressing any customer inquiries about the wine products. Establish trust and foster positive interactions with customers.
Some social networks like Facebook will limit content with words related to alcohol, tobacco, so businesses also need to learn and research carefully about Facebook advertising policies to get a good strategy.
3) Provide Behind-The-Scenes Stories
The behind-the-scenes story is always a topic that is very well received by consumers because of its confidentiality, “not everyone knows”. So, you can take advantage of users’ curiosity to attract users.
For example, if your brand is a new wine production brand, you can produce a short video, introducing the farm where the ingredients are grown, the production process in the workshop, how it is produced and stored, as well as the shipping…
4) Build Trust By Providing More Wine Educational Content
For a specific category like wine, what customers in Vietnam want is to find a wine that matches their wants and preferences. What you need to do is turn yourself into an “expert”, listening and understanding the needs of your guests.
Your contents need to help customers understand different categories of wine, which flavors are suitable for which tastes, which types are popular, and how to choose the right wine for each purpose(for gifts, for parties, for chill, …).
In addition, the certification of product quality enhances trust from customers.
5) Interact Regularly With Social Media Comments
All brands including wine brands benefit from social media followers, otherwise known as fans. For example, if a post is about an image of a cocktail, it will be easy for readers to ask what type of mixer is used, the recipe, the steps to choose ingredients, etc.
This, quickly answering that question is a great way to build a brand with existing and potential customers.
VI. VIDEO CONTENT – EASILY CATCHES CUSTOMERS’ ATTENTION
Video is a very cost-effective way to promote your wine. Foreign brands can share knowledge about their regions and cultural festivals, with a major focus on the subject of wine and alcohol products on sale.
These videos can be published on the brand’s website and shared on social networking sites to reach a large number of Vietnamese consumers. You can shoot a few scenes of wine production, vineyards, and your employees… to stimulate the curiosity of viewers, or advise on suitable wines for the festive seasons in your store and invite customers to visit. Helping customers to distinguish between authentic wines and fake ones is a viable option.
You can also show buyers promotions for the upcoming festival. Notably, viewers will remember up to 95% of the information conveyed through video, while in text form, they will only remember 10%.
VII. ONLINE AND OFFLINE ADVERTISING
Use online advertising channels like Google AdWords and Facebook ads to boost your store’s brand awareness. Businesses can, additionally, build a cohesive advertising network through famous trading forums such as 5giay, muaban, etc.
Also, consider advertising offline such as in local magazines and newspapers, or participating in wine-related events and exhibitions. Combining online and offline advertising channels enhances the appearance of your brand to potential customers.
VIII. ORGANIZE OR SPONSOR ALCOHOL-RELATED EVENTS
Decree No. 40/2008/ND-CP stipulates: “Companies producing and distributing alcohol are not allowed to sponsor cultural activities, art, sports, entertainment, care activities. health and other social activities associated with the promotion of alcohol products”. The promotion of alcohol is always one of the challenges for a business because it is such a difficult item to go viral. However, in reality, alcohol brands are always looking to organize or sponsor events where possible.
Wine dealers can become the main sponsors of many other significant cultural and artistic events that are not subject to disciplinary action by state authorities such as classical concerts, fashion shows, etc. Golf tournament is also a place where many potential customers of alcohol brands gather. Another event where alcohol can be the main way to appear to the public is organizing wine awards, which can also help international brands create recognition in the eyes of Vietnamese customers.
Organizing free wine-tasting sessions is also a way to attract customers in Vietnam. This provides an opportunity for customers to experience new wines and also helps build relationships with potential customers. Promote your event via social media channels, website, and email to drive customer engagement.
IX. INVEST HEAVILY IN BRAND AMBASSADORS
Investing heavily in ambassadors is also a way to promote alcohol
In Vietnam, using celebrities to endorse alcohol brands is not as public as other industries. Although it does not appear in the mainstream media, by means of social networks, forums, fan clubs, and important events, the alcohol brand is still widely promoted besides the names of celebrities.
One of the ways to promote alcohol “indirectly” to help the authorities not fine is to appear in movies. In film sponsorship contracts in addition to scenes with a certain product appearance, alcohol brands can also appear dignified at the end thanking the sponsor.
X. CREATE A LOYALTY PROGRAM – KEEP CUSTOMERS COMING BACK
Create a loyalty program to encourage customers to return to the store and shop more often. Offer special offers, coupons, or gifts to customers participating in the program. This not only encourages customer loyalty but also motivates them to continue shopping with your brand.
IN CONCLUSION
To successfully sell wine to Vietnamese importers, it is essential to adopt a well-informed and customized approach that resonates with the market’s preferences and regulations. Staying abreast of market trends, adhering to import regulations, and offering consistent support to importers are vital elements. By demonstrating dedication and strategic acumen, wine importers can flourish in the Vietnamese market and capitalize on the country’s growing fondness for wine. Following the provided guidelines and continuously adapting to the market dynamics, wine sellers can unlock Vietnam’s potential as a profitable and sustainable market for their products.
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