Green Consumption Trends in Vietnam: Insights from a Key Conference
On November 12, at a conference themed “Taking the Lead in Dual Transition for a Greener Vietnam” hosted by VIR, Le Minh Trang, associate director of retail measurement services at NielsenIQ (NIQ), shared enlightening insights on evolving green consumption trends in Vietnam. This pivotal event gathered numerous leaders, experts, and stakeholders interested in fostering sustainability within the country.
Consumer Awareness and Priorities
According to the NielsenIQ Consumer Outlook and Expectation 2024 study, a noticeable 16% of Vietnamese consumers have integrated sustainability into their long-term priorities, while 24% are focusing on sustainable lifestyles for the near term. This suggests a growing consciousness about environmental issues and the impact of consumption choices.
Le Minh Trang emphasized, “Green consumption in Vietnam is making encouraging strides as consumers become increasingly concerned about sustainability.” This shift reflects broader global trends while highlighting the unique context of Vietnamese consumers.
Impacted Sectors
The growing trend of green consumption is most prominently observed in sectors like food and beverages, personal care, fast-moving consumer goods, and consumer electronics. Consumers are increasingly gravitating towards organic products, environmentally friendly packaging, and energy-efficient devices. Trang pointed out that these consumer preferences are shaping market dynamics and influencing product offerings.
Business Benefits of Green Production
The shift toward green production strategies has not only benefits for the environment but is also proving advantageous for businesses. In the Asia-Pacific region, 42% of consumers believe that it’s essential for businesses to actively reduce their environmental impact, while 34% view this as significant. Implementing sustainable practices often leads to increased customer loyalty, enhanced brand reputation, improved profit margins through cost savings, and expanded export opportunities.
Trang elaborated, “Transitioning to green production helps businesses reduce long-term costs by optimizing energy, raw materials, and waste management, thereby improving profit margins.” These insights are crucial for companies working to align with consumer values and environmental mandates.
Challenges Faced by Businesses
Despite the multitude of benefits associated with green production, businesses are also facing pressing challenges. According to Trang, there will be increasing pressure from consumers and stricter environmental regulations over the next five years.
Some critical challenges include:
- Lack of Supporting Technology: Many businesses struggle to acquire the latest technologies needed for sustainable solutions.
- High Production Costs: Transitioning to greener practices often involves significant upfront investments.
- Supply Chain Transparency: Difficulty in ensuring transparency can hinder the implementation of sustainable practices.
- Absence of Standards: The lack of defined standards can dissuade small and medium-sized enterprises (SMEs) from making necessary changes.
SMEs: Challenges and Opportunities
In a recent NIQ report, it was noted that 17% of companies in the Asia-Pacific derive their product value from health-focused offerings, while 12% come from sustainable and environmentally friendly products. SMEs, in particular, face a unique set of challenges but also stand to gain considerable benefits by adopting sustainable business strategies.
Trang pointed out, “One of the biggest challenges that SMEs face is the lack of scalable technology. Many small businesses struggle to access the necessary technology to implement sustainable solutions.” However, she also emphasized that SMEs are in a prime position to leverage developments in renewable energy and consumer pressure to innovate their business models.
Strategic Adaptation for Enterprises
To seize emerging opportunities, businesses must embrace adaptability in their operations. Key strategies include:
- Monitoring Legal Regulations: Keeping abreast of evolving regulations is vital.
- Supply Chain Management: Companies need to ensure effective management throughout their supply chains.
- Investment in Certifications: Gaining independent certifications can enhance credibility.
- Community Collaborations: Partnering with local communities can bolster sustainable practices.
- Reasonable Pricing: Avoiding excessive price hikes for sustainable products is crucial to maintain consumer interest.
Trang emphasized the importance of substantiating claims with concrete evidence, stating that businesses which swiftly adapt to these trends will achieve a competitive advantage while contributing to a more sustainable future.
Spotlight on REPEET: A Case Study
In alignment with Vietnam’s commitments to achieving Net Zero, companies like REPEET are making significant strides in sustainable fashion. By replacing petroleum-based polyester with recycled polyester fibers sourced domestically, REPEET is setting an industry benchmark.
The brand has constructed a comprehensive supply chain encompassing collection, classification, recycling, and production, achieving remarkable results: a 57% reduction in carbon emissions and a 70% decrease in water usage. Vang Vien Thong, CEO and founder of REPEET, stated, “By using 10 tonnes of REPEET fabric, we have recycled nearly 1.45 million PET plastic bottles, reducing carbon emissions equivalent to a car travelling 57,000 km.”
REPEET’s Growing Impact
REPEET exemplifies a successful enterprise in the burgeoning sustainable fashion industry in Vietnam. With a robust strategy towards sustainability, the brand is not only establishing a strong presence in domestic markets but is also expanding into international markets like Japan, the United States, and Europe.
Beyond merely delivering high-quality products, REPEET continuously invests in innovative recycling technologies, thereby contributing to a sustainable business model that supports broader trends in sustainable consumption within the fashion industry.
In light of these developments, Vietnam is at a crossroads where consumer awareness and business adaptation could significantly dictate the trajectory of green consumption, potentially positioning the nation as a leader in sustainability in Southeast Asia.