Background

At the end of 2022, post-COVID, although Vietnam’s domestic tourism market has prospered and is one of the first Southeast Asian countries to reopen, the recovery rate is still the lowest in the region, especially in terms of international visitors.

As a market leader, together with Lotusmiles – the most unique loyalty program in Vietnam, Vietnam Airlines has focused on attracting new customers, especially from international customers, upgrading the brand experience, optimizing on the mobile platform and strengthening the connection with new technology.

By leveraging the strengths of technology and expanding online interaction, Vietnam National Airlines has successfully attracted both domestic and international customers, contributing to stimulating Vietnam’s tourism demand to develop strongly again.

Objective

Vietnam Airlines is focusing on important goals to promote sustainable growth and development.

• Communication Objective: The company aims to constantly improve the brand experience through the application of advanced technology, especially on online platforms App Mobile, website, Gmail, Zalo, Viber… to provide convenience and a seamless personal experience.
• Marketing Objective: Build deep connections with current and potential customers through content personalization, omnichannel engagement, and specialty care programs, thereby enhancing Vietnam Airlines’ brand recognition and engagement.
• Business Objective: Boost sales from new customer sources, especially international customers with high spending power, which plays an important role in business recovery and expansion.

In this way, Vietnam Airlines aims to build a strong and long-term relationship, increase the rate of returning customers and stick with the brand, affirming the pioneering position of Vietnam’s national airline.

Idea

Salesforce AI Analytics

The campaign is powered by Salesforce’s artificial intelligence (AI). Salesforce AI Analytics provides insights into CRM processes and real-time operational data, helping Vietnam Airlines have a more comprehensive view of customer behavior assessment. After consolidating the data, the platform enables prediction of customer behavior across sales, marketing, and service channels, including analyzing customers’ past habits on websites and mobile apps, as well as their spending trends to expand cross-selling opportunities for products and services. This approach helps optimize marketing activities according to individual preferences and expected behavior of each customer.

In addition, thanks to geotargeting technology, Vietnam Airlines can identify the country where potential customers are located. Combined with user data (identified and unknown), this technology supports the creation of relevant content and offers that are maximally personalized to the currently recorded behavior. All based on more than 10 important factors in the customer’s trip such as weather, cuisine, culture and language… creating a unique experience for each separate journey.

Campaigns Powered by Salesforce’s Artificial Intelligence (AI)

Salesforce AI Analytics – provides information about customer relationship management (CRM) processes and real-time operational data to help Vietnam Airlines have a more comprehensive view of customer behavior evaluation

Strategic Solutions

1. Personalization Content  

Based on CRM data, Vietnam Airlines has developed a sophisticated and effective customer outreach strategy by creating more than 200 different customer segments.

Each of these segments is not only defined based on distinct consumer characteristics and behaviors, but is also served by the most appropriate content and communication channels. This allows Vietnam Airlines to meet the diverse needs of each customer group, and at the same time attract and retain potential customers effectively.

Vietnam Airlines understands that every customer has their own desires and preferences, so personalizing the communication message is extremely important. Thanks to the detailed data analysis from the CRM, Vietnam Airlines can identify the factors that affect the purchase decision of each segment, thereby developing attractive and value-added content. The communication channels that Vietnam Airlines chooses are also optimized to match the behavior and habits of our customers, ensuring that our messages reach the right people at the right time. Thereby, Vietnam Airlines not only improves the efficiency of approaching customers but also contributes to building a sustainable and reliable relationship with them.

Vietnam Airlines has classified customer groups to tailor programs and messages to each target group

Vietnam Airlines has effectively applied a customer segmentation strategy to optimize communication activities and create a personalized experience for each audience group.

For potential customers: The airline focuses on highlighting its image as a national airline with four-star standards, outstanding flights and excellent customer service, in order to attract attention and stimulate customers to learn more about Vietnam Airlines’ products.

For potential customers, the campaign emphasizes Vietnam Airlines as the national airline with four-star standards, premium flights and excellent customer experience

For current customers: The strategy is divided into two main groups

• Non-members: Vietnam Airlines implements attractive incentive programs to motivate them to participate in the loyalty program.

For existing customers, Vietnam Airlines’ goal is to encourage them to register to become a member to upgrade their membership tier, buy more tickets or become loyal customers for future flights

• Members: The airline constantly enhances the value of the experience by personalizing messages and offers, encouraging them to upgrade their membership tier, buy more tickets, or increase their use of the service.

Customers upgrade their membership tier, purchase additional tickets, or become loyal customers for future flights. This approach not only helps to strengthen relationships with customers but also creates sustainable revenue growth opportunities for Vietnam Airlines.

Customer experience at Lotus Lounge

Vietnam Airlines expects customers to upgrade their membership tier, buy more tickets or become loyal customers for the following flights

2. Event Marketing  

Vietnam Airlines also actively sponsors many local cultural events, with the goal of not only promoting domestic tourism but also attracting international tourists. These programs are promoted to each customer segment, accompanied by attractive incentives for flights on corresponding routes, creating opportunities for customers to fully experience the beauty of the country’s culture.

In July 2023 in Hanoi, Lotusmiles members are invited to experience the art of Ikebana flower arrangement and Japanese cuisine.

Lotusmiles members are invited to experience the art of Ikebana flower arrangement

Hozo International Music Festival 2023 has attracted hundreds of thousands of spectators and has become an annual music event of Ho Chi Minh City. Appearing at the Food Festival area within the framework of Hozo Super Fest 2023, Vietnam Airlines’ Lotus Deli bubble milk oolong attracted the attention of a large number of genZ. Young people queue up to enjoy delicious bubble tea of Vietnam Airlines.

Hozo International Music Festival – HOZO Music Festival 2023 has attracted hundreds of thousands of spectators and has become an annual music event of Ho Chi Minh City

In Nha Trang, Vietnam Airlines accompanies the VnExpress Marathon to become one of the largest sports events annually.

Vietnam Airlines accompanies many annual races such as the VnExpress Marathon

3. CSR Marketing: “1 Million Miles of Love”

Novaon Digital accompanies Vietnam Airlines to conquer MMA Smarties 2024 Vietnam Airlines launches a charity program called “1,000,000 Miles of Love”

Vietnam Airlines launched a charity program called “1,000,000 Miles of Love”, a meaningful initiative to connect the community and spread love. The program allows members to donate their miles to support practical volunteer activities, thereby helping disadvantaged people in society. With every mile donated, we not only create opportunities for those in need, but also inspire a spirit of sharing and connection among community members, including:

• 9 surgical projects for 1,100 children with cleft nose and palate
• Screening and surgery for 3,000 children with deformities existing in remote areas
• 4 projects of Head – Face – Neck – Eye deformity surgery for 180 cases

This is a way for Vietnam Airlines to join hands to build a better society, bringing joy and hope to those who are in need of support.

4. Data Activation & Real-time Marketing

Vietnam Airlines has implemented Data Activation and Real-time Marketing to optimize customer experience on Vietnam Airlines App, Gmail, iMessage, Zalo, Website, Viber… Our customer segments are offered unique offers tailored to each route they choose. The itinerary is personalized according to specific stages: From ticket purchase, pre-flight, in-flight, post-landing procedures.

After the data is synchronized and activated, Vietnam Airlines has set up an automated communication process for each segment. Communication content is tested through A/B Testing to determine the most optimal solution, thereby ensuring that the message conveyed is always accurate, timely and suitable for customer needs, improving interaction efficiency and building a strong relationship with them.

Vietnam Airlines has implemented Data Activation and Real-time Marketing to optimize customer experience on Vietnam Airlines App, Gmail, iMessage, Zalo, Website, Viber.

RESULT

The campaign has garnered impressive numbers:

• The campaign attracted 43 million new customer records from 17 countries.
• The number of international visitors increased by 283.5%.
• International sales increased by 154%.
• The number of new Lotusmiles members increased by 1 million.
• 20% growth in the number of Lotusmiles members.
• Online sales increased by 145%.
• The percentage of active Lotusmiles members increased by 63%.

At the SMARTIES Awards Vietnam 2024 ceremony, Vietnam Airlines’ “Million miles of wonder experiences” campaign also achieved a successful double:

• Silver (no Gold) in the Personalization category
• Bronze Prize in the Real Time Marketing category

Novaon Digital accompanies Vietnam Airlines to conquer MMA Smarties 2024

Through a meticulously designed campaign, making full use of customer data, Vietnam Airlines has reached the right audience with the right method, timing and message, thereby significantly improving the indicators of customer experience performance with the brand. The campaign not only succeeded in attracting international visitors, but also laid the groundwork for long-term goals, turning investments in marketing technology and data architecture into tangible revenue outcomes.

Novaon Digital is proud to be an agency accompanying Vietnam Airlines in its journey to conquer the MMA Smarties 2024 award this time.

At the end of the MMA SMARTIES season in Vietnam, Novaon Digital and Vietnam Airlines believe that in the future, more strategic initiatives and innovations in marketing will be implemented, in order to optimally meet the needs of customers and contribute to the sustainable development of the brand as well as the whole industry.

The campaign continues to be nominated by the MMA SMARTIES APAC (Asia Pacific region) shortlist. This achievement is a clear testament to the strength and effectiveness of the “Million miles of wonder experiences” campaign with innovative and groundbreaking marketing initiatives. Stay tuned for the latest information about this contest in the near future!

30% of consumers surveyed said that shopping spending in 2024 will increase compared to 2023, while over 40% of consumers said they will continue to cut back on shopping, and 30% of consumers said that there will be no change in shopping compared to 2023. According to the results of a survey on the level of consumer shopping by the Vietnam Association of High-Quality Goods Enterprises, compared to last year in 2024, the level of shopping has a more optimistic signal, but the increase is not significant. 
The problem for consumer electronics businesses is what to do in the face of the complicated situation of the market as well as changes in domestic consumer behavior trends.

1. Overview of the consumer electronics industry

a. Access to Consumer Electronics

Consumer electronics include electronic devices that serve the daily needs of consumers. The Consumer Electronics industry includes 2 main industries: Electronics (phones, computers, electronic devices…) and Household appliances (kitchen equipment, cooling, cleaning, etc.). For each category, the products have different characteristics, specifically:

Products in the electronics industry are characterized by short life cycles, continuous innovation, and trend-following. Consumers are mainly from 18-35 years old, with a preference for updating technology trends and dynamic behavior on social networks. Electronic products are widely consumed on special occasions such as the Tet season, the tourist season, the new product launch season, the back-to-school season, and the festival season.

On the contrary, the product life cycle is long, there is little fluctuation in features and designs, and customers are more interested in quality, durability, energy saving, etc. are the characteristics of the household electrical industry. These products can be consumed at any time of the year, seasonality is evident in products such as air conditioners, fans, refrigerators (consumed mainly in summer) and heaters, heating fans, clothes dryers (consumed in winter).

The role of consumer electronics is diverse, not only improving the quality of life but also promoting technological development, creating jobs and stimulating the economy. These products help connect people, support work and entertainment, personal communication, and enhance utility and efficiency in daily life.

To better understand the industry, as well as see the performance of each specific product group, let’s take a look at the ranking below:

Refrigeration equipment is the most talked about item in 2023, accounting for 36% of the total discussion in the Electronics, Refrigeration, and Telecommunications industry. The top popular brands on social networks are Dien May XANH, FPT Shop, Mobile World, Viettel Store and Hoang Ha Mobile. The Electronics and Refrigeration retail industry is an “ideal playground” for big brands. In particular, Mobile World and Dien May XANH of Mobile World Joint Stock Company are still the 2 most chosen brands to buy in 2023, according to a report by YouGov BrandIndex.

b. Category statistics on the e-Commerce channel

Grasping the development trend of e-commerce channels, consumer e-commerce businesses expand their business through official online sales channels or booths on e-commerce platforms Shopee, Tiktok, Tiki, Lazada, etc.

The Consumer Electronics industry has great growth. Shopee is still the Top 1 e-commerce platform, this is the largest consumer electronics brand to focus on. The largest allocation of Consumer Electronics revenue on e-commerce platforms is Shopee with 76.8%, followed by Lazada with 21.9%, the rest is allocated to Sendo and Tiki (excluding TikTok Shop).

In 2023, Household Appliances is the industry with the highest revenue in the Consumer Electronics industry (~15 trillion VND), up ~6 trillion VND over the same period in 2022. In 2nd place is Phones & Tablets, with revenue of about ~12 trillion VND, an increase of more than 4 trillion VND over the same period in 2022. These are the 2 industries that account for the largest market share of the entire Consumer Electronics industry on the e-Commerce floor.

Although the market was launched quite late, however, by the end of 2023, TikTok had surpassed Lazada and ranked 2nd with a market share of 11.1% of the market. Tiktok is gradually singing to develop the consumer electronics market and help the revenue of small goods industries surpass significantly. Details of the growth of Tiktok Shop by month are as follows:

The statistics below are compiled from 4/2023 to 4/2024, measured on 4 platforms Shopee, Lazada, Tiki, and Sendo, showing consumer consumption and demand for each specific category.

Realizing that sales of categories grew quite well on e-commerce platforms. This proves that customers are gradually changing their shopping habits. Shopping on online platforms is somewhat more lively than that, in contrast to the gloomy atmosphere at physical stores. However, compared to the total revenue of the whole industry, the revenue growth on the e-commerce platform is insignificant.

After a period of hot growth due to the impact of the Covid-19 pandemic – causing the demand for electronic devices to support learning and remote work to increase, the purchasing power of consumers is weakening, business plans based on false growth expectations and the macroeconomic situation is not very positive, which has caused businesses to face a series of challenges.

2. Challenges for the Consumer Electronics Industry in 2023 and Opportunities for Recovery in 2024

a. Factors Affecting Consumer Electronics Businesses in 2023

Changing Consumer Behavior

Macroeconomic difficulties, along with rising electricity prices and living costs, have impacted consumer purchasing power. According to PwC’s report on consumer habits in Vietnam in 2023, up to 62% of consumers chose to cut back on non-essential spending, with 38% of them reducing their use of electronic products.

Instead of shopping based on personal preferences, many consumers have shifted to purchasing based on actual needs, prioritizing essential products with long-term value. Besides the key factors of brand, price, and quality, other aspects highly valued by customers include advanced technology, energy consumption, environmental impact, warranty policies, and promotional packages. In the battle for market share, understanding customer needs is the weapon that will help businesses succeed.

The Influx of Foreign Businesses

According to statistics from Metric over the 12 months (from April 11, 2023, to April 9, 2024), the top 10 brands with the highest revenue on Vietnam’s e-commerce platforms mostly come from countries like the U.S., South Korea, and China.

The absence of domestic brands requires Vietnamese businesses to develop smart and effective business strategies to enhance their competitiveness.

The Development of E-commerce

E-commerce offers a sales channel with lower costs, but it also brings pressure to lower prices due to price transparency and the ease of comparison between suppliers. According to a report from Metric.vn, the total revenue of the entire e-commerce market in Q3/2023 reached VND 63 trillion, achieving a growth rate of 54.42% compared to the same period last year.

Compared to electronics supermarkets and retail stores, the prices offered by sellers on e-commerce platforms are always more attractive due to subsidy policies from the operators. However, many consumers still hesitate to purchase high-value items such as smartphones, tablets, laptops, televisions, refrigerators, and air conditioners on e-commerce platforms due to concerns about quality assurance or receiving products that do not match the price paid.

These factors have had significant impacts on the Vietnamese electronics market.

The wave of spending cuts since the second half of 2022 has created excessive inventory pressure on consumer electronics retailers, leading them to continuously offer promotions and deep discounts to attract customers. To avoid losing clients, other retailers must do the same and even provide even larger incentives.

This strategy has led to the most intense price war in history. Sustained price reductions have significantly decreased the profits of retailers. Furthermore, the consumer electronics industry has witnessed a dramatic “price drop” for key items such as smartphones (down from 2 to 14 million VND each), laptops (down from 5 to 10 million VND each), and consumer electronics and home appliances (down from 50 to 70% per product).

The consequence of this price race is that retailers are struggling to sustain operations in a fiercely competitive environment and under heavy economic pressure.

According to statistics, in the first quarter of 2023, the revenue of the largest retailer dropped by 25.7% compared to the same period, and after-tax profit was only 21.28 billion VND, a decrease of 98.5% compared to the same period in 2022, marking a record low since going public.

The demand for non-essential items has sharply declined in the context of a challenging economy, coupled with the trend of shifting consumer spending toward online shopping, causing many retail stores to close en masse. Thế Giới Di Động closed nearly 150 stores within two months, with the number reaching 200 stores by the end of 2023, while FPT Shop closed 36 stores and reported a record loss of 329 billion VND.

Given the bleak outlook for the consumer electronics market in 2023, the most pressing question is whether 2024 will present opportunities for recovery or pose even greater challenges for the industry.

Retail representatives believe that in 2024, the macroeconomic environment will still be a barrier for the consumer electronics sector, and the market will continue to face difficult and challenging times. However, experts maintain that there are still grounds for optimism regarding the industry’s recovery potential.

b. Opportunities for Development for Vietnamese Consumer Electronics Companies in 202

After experiencing a significant revenue drop of 20-25% in retail sales of phones and electronics in 2023, experts anticipate a recovery in product sales of about 5% compared to the same period in 2024. This assessment is based on the considerable potential for growth in the home appliance sector in Vietnam, which remains largely untapped.

According to Euromonitor, the average age in Vietnam is 31 years—an age group that typically engages in shopping—while average income is improving (3,000 USD per person per year). Although most Vietnamese households already own essential household items, the demand for purchasing new or upgrading basic home appliances is still on the rise.

Additionally, the population in Vietnam is steadily and consistently increasing each year. This creates a significant opportunity for businesses in the consumer electronics sector, as the demand for purchasing and upgrading electronic devices—from smartphones and tablets to home appliances like washing machines, refrigerators, and air conditioners—is continuously growing.

To effectively capitalize on the market’s potential, companies need to make concerted efforts to seize opportunities and implement appropriate marketing strategies that align with market fluctuations and industry trends. This approach will help restore business activities and achieve revenue growth in the upcoming period.

3. General Trends Forecast for the Consumer Electronics Industry 2024-2025

a. Consumer Market Forecast: Online Shopping Channels Will Continue to Develop

After more than a decade of robust activity in Vietnam, e-commerce platforms have redefined shopping habits for consumers. Previously, consumer electronics were not prioritized on online shopping channels. Now, with support to embrace technological trends and facilitate the launch and growth of online businesses through e-commerce platforms, along with commitments to warranty and after-sales service, consumer electronics products are increasingly appearing on e-commerce platforms and receiving greater favor from consumers. 

According to the Vietnam E-commerce White Paper 2023, technology and electronics account for 39% of the total online shopping choices of consumers. With support from e-commerce platforms and the trend of online shopping, consumer electronics businesses can fully leverage this opportunity to reap the benefits of this business model.

b. Spending Trend Forecast: Increased Demand for Upgrading and Replacing Household Electronic Devices

Statista notes that as the economy recovers, consumer spending will increase, and the demand for upgrading and spending on consumer electronics will gradually rise as well. In terms of per capita revenue, each person in Vietnam is expected to generate revenue of $79.71 in 2024—a significant increase compared to 2023.

Additionally, the high proportion of young people in the population leads to many changes in the demand for the quality, design, and functionality of electronic and household products.

The recovery of the economy, increasing consumer spending, and a young population will provide strong momentum for the recovery of the consumer electronics market in Vietnam in the upcoming period.

c. Development Forecasts: Smartphones and Personal Computers Will Lead in Consumption

The consumer electronics market in Vietnam is witnessing a surge in demand for smartphones and smart TVs. In the first six months of 2023, Vietnamese consumers spent $2 billion (49.2 trillion VND) on smartphones, making it one of the highest spending categories in the Asia-Pacific region.

2024 will also be a time for upgrading devices such as smartphones and laptops following the peak purchasing period in 2021. This aligns perfectly with the forecasted trend that Vietnamese consumers will focus on advanced technology and be willing to upgrade personal devices to meet new demands and trends.

The projected trends in the consumer electronics industry are not only indicators of technological and product development but also play a crucial role in understanding changing consumer behavior and how businesses approach customers.

In the face of challenges due to market fluctuations and changing consumer trends, companies need to find new directions to optimize their marketing strategies to overcome market difficulties and achieve sustainable growth.

To support businesses in building effective Brandformance strategies for the period of 2024 – 2025, Novaon Digital has launched the Consumer Electronics & Home Appliances Brandformance Guides 2024. This resource will provide a comprehensive overview of the market, customer insights, creative marketing strategies, solutions to effectively balance branding and performance, as well as successful Brandformance implementation lessons from various domestic and international brands.

Register to receive information about the guides: Here