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Nascent branding industry needs support: experts
The weak enforcement of intellectual property rights and unreasonable corporate income tax regulations have stifled the development of branding in Vietnam, says a European Commission official.
Antonio Berenguer, trade counselor of the European Commission delegation to Vietnam, said the country has few brands strong enough to compete in local and international markets.
Businesses will be unable to develop their brands if their intellectual property is insufficiently protected due to a lack of human resources and expertise in the government, he said at a conference in Ho Chi Minh City last week.
He noted that corruption was also hindering the enforcement of intellectual property rights in Vietnam.
Even after the country’s accession to the World Trade Organization last year, which requires it to improve its intellectual property rights system, the country still lacks “clarity as to the determent effect of fines,” he said at the conference.
The conference, “Branding: the Key to a Successful Business,” was organized by the European Chamber of Commerce in Vietnam and the Vietnam Chamber of Commerce and Industry (VCCI).
Additionally, Berenguer said companies were discouraged from investing in branding campaigns as the government only allows local businesses to spend some 10 percent of their operational costs on advertising.
Doan Duy Khuong, VCCI’s deputy chairman, said about 25-30 percent of local businesses have invested in branding but only 30 percent of those had developed comprehensive branding schemes.
Vietnam is an active exporter of agricultural and industrial products but few local seafood, footwear or apparel industries sell their own brands on the export market.
The Ministry of Industry and Trade recognized 30 local brands with the “Vietnam Value” award in April, selecting them from a shortlist of 1,000 candidates out of about 350,000 businesses operating in Vietnam.
The ministry’s list included Vietcombank, Vietnam Post and Telecommunication (VNPT), Viet Tien Garment, Kinh Do, Agifish, Biti’s, Saigon Jewelry Company (SJC) and Truong Thanh Wood.
New challenges
Other national economic difficulties, especially high inflation, have also been making it particularly difficult for local businesses to promote their brands, said participants at the meeting.
Bigger and stronger businesses have been able to continue their promotion and branding programs while others have been hit too hard by the credit squeeze and high input prices over the last nine months to think about anything other than mere survival.
The collapse of internationally branded US finance and banking firms like Lehman Brothers, AIG and Merrill Lynch – as well as the Chinese milk controversy – have hurt consumer confidence in famous brands, experts at the meeting said.
But others at the conference also said these failures could provide valuable lessons for local businesses to learn from.
Ashok Sud, chief executive officer for Standard Chartered Bank in Laos, Cambodia and Vietnam, said the US financial collapse was rooted in management and growth strategies, but there was no problem with the firms’ brands.
Ton Nu Thi Ninh, former deputy head of National Assembly’s Foreign Affairs Committee, said the famous brands were built in fragile and sensitive areas like finance, banking and food, which require stronger foundations than other areas.
She said local businesses should use these challenges and lessons to help them carefully develop their brands step by step, with a focus on real value and strength, especially in sensitive markets.
Thanhnien
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