Van, who is originally from northern Vietnam, is one of many white-collar workers now enjoying the economic benefits of living in Ho Chi Minh City.
But outside of office hours, Van runs an online business selling locally sourced, high-quality food and groceries. With about 5,000 monthly customers and a food storage warehouse, this is no small side hustle.
“A few years ago, I learned how each part of Vietnam has its own animals and plants that are ideally suited for people living nearby,” Van shared. “Then I started selling locally sourced food in 2016 after using natural products for myself and my family for a long time.”
Her move was prescient, as tenets of sustainable consumption such as shopping locally are increasingly important to Vietnamese consumers.
The UN Environment Programme describes sustainable consumption as “decoupling economic growth from environmental degradation, increasing resource efficiency and promoting sustainable lifestyles.” Put simply: doing more and better with less.
According to KPMG Vietnam’s 2022 Customer Experience Excellence (CEE) report, 93% of customers are willing to pay more for goods from businesses and companies with strong ESG (Environmental, Social, and Governance) principles.
Other surveys have found that a majority of respondents believe sustainability is now a key factor when choosing a brand or product.
For example, in a recent survey of young consumers aged 18-29 in Hanoi and Ho Chi Minh City, Indochina Research Vietnam found that 76% of urban youths said they would not buy products from a company known for environmental violations.
One out of two of these consumers also said they had bought clean or organic food products within the previous three months.
Van has seen this shift over time first-hand.
“In the past, people bought food at local markets, but in cities, supermarkets have nearly replaced them,” she said. “Then the concept of eco, organic, natural products became more popular, and people realized the differences between natural products and mass-produced products, especially food. And now when the average income has increased, more and more people want to use natural, organic food.”
Some large corporations have also embraced sustainable consumption.
“It’s considered by us to be a great opportunity not only to bring an excellent customer experience but also to realize our ESG commitments,” said Tran Phuong Ngoc Thao, Member of BOD, Head of ESG Committeeof Phu Nhuan Jewelery JSC – PNJ. “It also reflects the core value of the company, which is a dedication to customer-centricity.”
Their ESG efforts follow careful consideration of global commitments such as the UN’s Sustainable Development Goals, Vietnam’s commitment to net-zero emissions at COP26, increasing investor concerns about ESG issues, and consumer decisions.
“We believe that customers deserve to experience, use, and understand the meaning behind the products they purchase,” Thaosaid. “This involves a production process that adheres to environmentally friendly standards, as well as parallel programs and efforts to educate customers on PNJ’s message.”
This includes sustainable marketing campaigns, eco-friendly packaging materials, and green shopping space experiences.
The work has paid off, with PNJ one of just 20 companies listed on the Ho Chi Minh Stock Exchanged earning a place on the VN Sustainability Index, and in 2022 it was named first among Vietnamese sustainable companies in non-manufacturing industries.
PNJ was also ranked second in KPMG’s 2022 CEE report, meaning it scored highly across metrics including trust, exceeding customer expectations, and understanding customer circumstances.
According to Thao, pursuing goals in line with sustainable consumption can greatly benefit a company. “One of the key advantages in PNJ’s commitment to, and development of, sustainable consumption is maintaining and upholding trust in the brand and honoring our values. The reputation of the business is a crucial advantage that needs to be leveraged to maintain the trust of customers and attract talent to the company.”
Not all consumers, however, have been convinced to make the switch to sustainable goods yet.
“A major concern remains cost, as sustainable products tend to be more expensive, as well as availability,” said Xavier Depouilly, General Manager of Indochina Research Vietnam. “Further concerns are related to the truthfulness of the promise made by producers without strong certification and guarantees, although some appear to be trusted, such as foreign organic food certifications and Vietnamese VietGap.
Nonetheless, Van believes sustainability will only become more important to consumers moving forward. “We are running out of natural resources, while environmental pollution directly endangers people’s living quality, and especially their food, water, and air,” she said. “People now realize that they need to consume more responsibly to protect their own health, as well as their children’s.”
Writing credit Michael Tatarski
Dynam Capital, the fund manager of Vietnam Holding (LSE: VNH), will be hosting the Webinar “Vietnam’s Retail Market” at 10AM UK, Thursday, 23 March, 2023 to discuss the huge opportunities for Vietnam’s retail sector with Phu Nhuan Jewelery JSC – the leading jewelry producer and retailer in Vietnam, and also one of VNH’s core holdings. Register to attend the webinar at: https://bit.ly/3ZYrOqY