Difference between Vietnam and Finland market
One day you may wonder like me, how the Vietnam and Finland markets are different. Having a chance to start my first business in Finland in selling Hekumu herbal tea, I have been trying to understand how the market in Finland operates; using Vietnam market as the reference for my learning. It has been very interesting for me to discover and contemplate the buying and selling activities in the stores, supermarkets, etc. during the last sales day in our school. There are some points of difference between Vietnam and Finland market that I would like to highlight according to my understanding.
As of 2020, the population of Finland is 5,531 million people while in Vietnam it is 97,34 million people.
Finland is the 27th largest market for E-Commerce with a revenue of US$6 billion in 2020, ahead of Vietnam and after Thailand. With an increase of 33%, the Finnish E-Commerce market contributed to a worldwide growth rate of 29% in 2020. GDP of Finland and Vietnam both reached to 271,2 billion USD in 2020 but GDP per capita was 49,041.34 USD in Finland and 2,785.72 USD in Vietnam. Besides, Finland has high urbanization rate: 85.5% live in towns or urban areas while over 39% of Vietnam population lives in urban areas. The large population size shows how large the domestic market is, but it does not mean that the dynamics and the need of one market are any less than that of another.
The distribution networks
In Finland, beside fast developing online shopping platforms, in here people commonly get familiar better with the traditional shopping channels, like hypermarkets, supermarkets, smaller local supermarkets and convenience stores. These are dominated by S Group and K Group, which counted 1,055 and 1,243 stores respectively in 2019, followed by Tokmanni (191 stores) and the German chain Aldi, according to Finnish Grocery Trade Association. Besides, there are 87 shopping centres and under 700 outlet stores in total in Finland. In Vietnam, goods are distributed mainly in traditional local markets, then in shops, supermarkets, retailers, wholesalers, etc. Nowadays, some major retailers have built large scale shopping malls like Vincom Mega Mall, Aeon Mall, etc. providing enjoyable experiences for customers in shopping. These major retailers are also developing their own purchasing centers for agricultural products and food across the country as part of the distribution network to control products quality and ensure the standards of harvesting and storing processes. This strategy helps them have competitive products prices and a foundation for later export. The competition of market would become fiercer in Vietnam. There also has appeared an inevitable trend of omni channels, thanks to the fact that 70% of Vietnamese population have smart devices, together with the rapid advancement of digital technologies, artificial intelligence, big data, etc. are generalizing online shopping among customers and retailers.
The market sector
The largest sector of Finland’s economy is services at 72,7 percent, followed by manufacturing and refining at 31,4 percent. In 2020, Vietnam’s service sector contributed the largest percentage to the country’s gross domestic product (GDP), at 41,63 percent.
Vietnamese people prefer going to the traditional market rather than going to the supermarket to buy daily needs such as rice, meat, vegetables, spices… We shop the food everyday to be able to buy the fresh food because we do not like the frozen products and also it’s more convenient to buy the fresh products from the traditional markets. There, sellers display goods outside the store for the most convenient viewing, selection and payment for buyers. Some people just need to grab some necessary food on the way home from work right from their motorbike. You may find it interesting to see there are many motorbikes on the road in Vietnam. However, it is not that funny to possess a motorbike for all people. Everyday people are facing with much traffic jam and with the strong sunlight burning the skin. That is why most people feel exhausted at the end of the day on their motorbike. Therefore, I remember when I was in Vietnam, my family usually chose to ride the motorbike to the shops or markets just in the near corner to buy something instead of walking. Shopping in stores right near to the house or by delivery is the most favorite buying habit and people just go to supermarket, or shopping mall just in case they want to hang out with family or to buy some branded products.
Photo source: dreamstime.com
Vietnam has 224 grade I markets, 907 grade II markets and 7,397 grade III markets based on the size of the market. That is why the big retail groups have built up many convenience stores all over Vietnam to compete with these traditional markets. People started to buy from these convenience store more, however there are common thinking, that the convenience stores do not offer the fresh products like the traditional market and the prices are more expensive. On the contrary, the people can buy cleaner food or quality one from convenience stores.
Moreover, the convenience of cheap delivery and easy online shopping platforms encourage people to shop more. Vietnamese people consider the cheap or even free delivery service as the reason to make the shopping decision and paying after receiving the products is the competitive advantage too.
According to Shopee, one of the biggest online shopping platforms, nowadays, people are more comfortable to shop food online, especially shopping the milk products that are usually bought offline has been grown 7 times more on their online platform. Especially during the outbreak of corona, the need of shopping online is incredibly increased because of its convenience, the social distance situation, and also because it is safer to use card, instead of paying by cash as the frequent habit.
In Finland, the delivery costs are much more expensive than in Vietnam and also the door to door delivery costs the buyers more. That may make some people hesitate to shop online their food. Finnish choose to buy frequently from the K market, Lidl, or Prisma nearby once or twice per week. It was a surprise for me to see that candies, alcohol , canned products, and snacks seem to attract Finnish consumers and Finnish are proud of Finland domestic products and always prioritize to choose these products more than other import ones.
During the corona pandemic, Finnish people have bought more clothes, shoes and accessories, groceries and pharmacy items online, however because of no lockdown for the supermarkets, people keep shopping there as frequently during the corona crisis.
Indeed, the corona pandemic has been changing the daily routines, habit of people a lot. It also caused many difficulties for young and small companies to keep the business alive. Many of those have decided to make some significant changes to adapt to new situations and survive. Slow adaptation or not having sharp mindsets may cause risk to any business. Besides, understanding the market is also a must of the company owners. As a young entrepreneur, I like to read news of market and find the way to have best learning from it. Even though I still need to learn a lot about Finland market, I believe the game is fair for all players because the successful ones know the best what, where and who they are selling to.