Accueil / Bordeaux Echos / Vietnam, a dynamic market with high potential
A Marie-Charlotte Mesny report
Vietnam, rich and proud country with a long history, displays a dynamic growth of the GDP for nearly 20 years, offers now an increased standard of living, just take a walk in Ho chi Minh City and pay attention to Gucci, Louis Vuitton or Louboutin shops. Alcoholic beverages market in Vietnam has been is largely benefited from the opening of the country to the WTO in 1997.Vietnam is the 13th most populated country in the world.
Wine, is not traditionally consumed by Vietnamese,however its position tends to get stronger in recent years. The most popular are still wines, 80% of total wine sales.Vietnam is a country that offers perspectives for the wine business and has the potential to understand wine as we do in our traditional wine countries.
Indeed, the historical links between France and Vietnam explains why French wines represents 35% of market share, closely followed by new world Chilean wines.
It should be noted that New World wines are very strong on entry/mid-range segments. They offer price, consistency of quality and packaging advantages. Consumers but also hospitality professionals are looking for inexpensive wines that meet their needs for banqueting or wedding receptions.
What is French wines position in this traditional market?
France retains its position as the market leader thanks to Bordeaux wines reputation. The region is extremely popular and represents 70% of French wines sold in Vietnam. However, accordingly to this success, Bordeaux wines are also the most counterfeited on the market.
In 2007, French exports to Vietnam represented 46.8% of the market while in 2011, they stagnate around 15%. In this same trend, while Chilean exports by volume were almost multiplied by ten for 5 years, exports of French wines remain fairly stable. Free trade bilateral agreements signed in 2011 encourages alcoholic beverages Chilean exports. These agreements lower customs duties applicable to Chilean wines from 56% to 20%.
The Vietnamese consumer
Vietnam is a traditional asian country that discovers wine, predominantly male consumers tend to prefer red, tannic and powerful wines with high levels of alcohol.The best-selling wines are reds (65%) followed by whites (25%) and finally sparkling wines (10%).
It is important to note the rapid evolution of women in vietnamese society and subsequently within wine consumption. They are business women,cities residents which by their travels, education and powerful purchasing power seek to improve their wine skills and are much more open than male consumers. They attend wine bars and wine tasting, women are consumers to pamper in the near future.
The most cosmopolitan clientele with western tastes and highest purchasing power are located in urban centres, they are fond of imported products and amateur of wines and spirits.
Distribution
The consumption of alcoholic beverages on-trade represents 60% of total sales. Supermarkets network is wider and attracts consumers who are concerned by goods’ quality and availability.
Regulations
Vietnam, a Single Party Socialist Republic understood its interest in providing a more flexible framework for alcoholic beverages imports.
Hence, in 2013 air imports ban will be suspended and taxes on spirits imports lowered.
Due to Vietnamese protectionist politic and its bad habit to regularly change laws,this market is hard to approach.
At the moment, the total of wine import taxes is 85%: customs duties on CIF 50%, excise duty 25%,VAT 10%.
Interview with Yuri Korsakoff, Director of Ample, creator of The Warehouse company, specialized wines imports in Vietnam.
Here a few names in Warehouse portfolio: Baron Philippe de Rothschild, Georges Duboeuf, M.Chapoutier, J.Drouhin, Pascal Jolivet, Gustave Lorentz, Louis Roederer, Nicolas Feuillatte, Billecart Salmon, Bernard Magrez, Francis Ford Coppola, USA, Los Boldos, Chile, Antinori, Italie.
MCM : You are one of the first wines importers in Vietnam, could you briefly retrace your career?
Y.K : In order to keep it brief, I have been in Vietnam for 20 years, the first bottles were imported for Beaujolais Nouveau in November 1993.We have imported 472.920 bottles in 2012.
MCM :According to figures published by Ubifrance, France keeps its leading position on the market, thanks to Bordeaux wines and Cognac spirits. This position is threatened by the increase of New World wines imports, especially Chilean, but also Australian, which strengthen their position in the Vietnamese market. The evolution of Warehouse portfolio checks this trend and how do you see the evolution of the wine consumption in Vietnam?
Y.K: The evolution of our portfolio reflects roughly this trend.Chilean wines represent 25 to 30% of our imports, French wines represent more than double this figure.Chilean wines are very present on the lower wine market segment, while we, at Warehouse, are working with hospitality professionals who are requesting high-end French wines, because their final consumers are wealthier. French wines represent more than 50% of our total sales.
My feeling on this evolution: the more Vietnamese drink Chilean wines, the more upmarket they will go and drink French wines in the future,as their purchasing power will increase and that their palate will become more sophisticated.
MCM : How do you see the evolution of the wine market in Vietnam and Warehouse ?
Y.K : As we are at the very beginning of the development of this market in Viet Nam, and preventing authorities take drastic measures, as in Thailand, to curb imports, this market still has a strong growing potential, for the next 10 years at least.
Sources
Marie-Charlotte Mesny : mcmesny@gmail.com (Ask her for the complete study)
http://www.suddefrance-developpement.com
http://www.vietnamautrement.com
Le marché des boissons alcoolisées au Vietnam, UBIFRANCE Vietnam, Mai 2012
Fiche Marché, Les boissons alcoolisées au Vietnam, UBIFRANCE Vietnam – Bureau de Ho Chi Minh Ville, Juin 2013
inscrivez-vous
Hello,
We are very interested in exporting wine to Vietnam. We live here in the heart of Northern California’s wine country between Sonoma and Napa and have quite a few solid connections with wineries located throughout the area. My wife is from Vietnam and knows the people; customs and language to assist in promoting CA wines to Vietnam. Frech and Chilean wines are good but CA wine is a step above in many cases and we would like to export them. Any guidance or input would be much appreciated.
Cheers, Greg
Hello! Américain wines are not well represented and are mostly expensive.
Please contact me on my email mcmesny@gmail.com
Thanks!!