Where a slight advertising programmes costs millions
Vinamilk, Sabeco, and Masan Consumer, all operating in the Fast Moving Consumer Goods (FMCG) sector, have spent thousands of billions of dong each year on advertising programmes to increase their market shares in stiff competition, according to newswire Cafef.vn.
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Increasing spending for advertising programmes is considered an important role to create these enterprises’ continuous increase in revenue.
In 2012, dairy producer Vinamilk and Saigon Beer Alcohol Beverage Joint Stock Corporation (Sabeco) spent VND587 billion (US$26.4 million) and VND434 billion (US$19.5 million), respectively on getting the edge on rivals. In 2015, these figures increased by VND1.777 trillion (US$79.8 million) and VND1.269 trillion (US$57.03 million), respectively, to be three times higher than in 2012.
Besides, in 2015, Masan Consumer Holdings spent VND1.454 trillion (US$65.3 million) on competitive advertising programmes, up 13% on-year.
As a result, according to the enterprises’ financial reports, they made record revenue in 2015. Notably, Vinamilk earned VND40 trillion (US$1.79 billion), Sabeco VND27 trillion (US$1.2 billion), and Masan Consumer Holdings VND13 trillion (US$584.3 million) in revenue.
Although expenditure for advertising programmes is increasing, the effect on revenue is diminishing due to stiff competition in the FMCG sector. Notably, in 2012, the revenue of Vinamilk and Sabeco stood somewhere between 45 and 50 times higher than their expenditure for advertising programmes. However, in 2015, the returns stood at only 22.6 and 21.4, compared to 2012.
Vinamilk currently owns 25 subsidiaries and 13 dairy production factories, with a workforce of over 6,000 people throughout Vietnam. Vinamilk’s products are present in more than 40 countries over the world. Besides, the company holds 22.8% stake of Miraka factory in New Zealand, 70% of Driftwood Dairy Holding in the US, and 51% of Angkor Dairy Products Company in Cambodia.
Being Vietnam’s largest beer firm, Sabeco’s beer products hold 46% of the domestic market with an output of 1.38 billion litres in 2015.
Masan Consumer Holdings, an unlisted subsidiary of Masan Group Corporation, specialises in manufacturing fish, soy, and chilli sauce, as well as coffee. In 2015, the company’s products held a sizeable portion of the domestic market: its soy and chilli sauces made up 71 and 43%, respectively, while its fish sauce 65% and coffee 40%.
