Soft drink market: the stiffer competition is still ahead

Though the foreign big guys — Pepsi and Coca Cola have powerful financial capability which help put them at an advantage in the confrontation with Vietnamese, no one can say for sure that they will surely win the game.

The two drink manufacturers, which are dominating the fizzy drink market, are not the “giants” in the still drink market at all. In the competition with Tan Hiep Phat, they have been running after the Vietnamese manufacturer.

Tan Hiep Phat, for example, was the pioneer in exploiting the energy drink niche market. It was also the first company which launched green tea products into the market. While Pepsi was still busy running after Tan Hiep Phat with green tea products, Tan Hiep Phat once again went ahead of the two big guys when marketing a herbal tea product with the brand “Dr. Thanh”, which was positioned as the product good to people’s health.

Most recently, Tan Hiep Phat has marketed a new product, Number 1 Vitamin, a drink with supplement vitamins, orange flavor, in PET bottles, 350 ml.

While Vietnamese fizzy drink manufacturers have to shelter in the rural market and try to do business in a low income market, they have been dominating the still drink market. Tan Hiep Phat, a Vietnamese enterprise, now can challenge the two big guys — Coca Cola and Pepsi. And it is a Vietnamese enterprise which creates new tendencies which the foreign big guys have to run after.

The combat is still ahead

Though Tan Hiep Phat now dominates the still drink market, analysts still have doubts if it can stand firmly on the first position for a long time. Though Tan Hiep Phat still speeds up with its investment, its Number 1 position may be shaken, especially when it has to combat with such the redoubtable rivals like Coca Cola or Pepsi.

Sources said that Tan Hiep Phat has decided to invest VND1.82 trillion in a factory in Bac Chu lai Industrial Zone in Quang Nam province which would make Number One products. Another factory in Ha Nam province is under construction.

“Enterprises need to be more creative to satisfy the consumers. Launching new products into the market is a must for the enterprises which want to exist in the current stiff competition,” said Tran Quy Thanh, President of Tan Hiep Phat.

Nevertheless, this is also the way Tan Hiep Phat’s competitors are following. The sums of money Coca Cola and Pepsi have committed to pour into Vietnam is even much higher.

In late 2012, President and CEO of Coca Cola Group Muhtar Kent, during his visit to Vietnam, made an announcement that the group would invest another $300 million in Vietnam in the next 3 years.

In 2009, the president listed Vietnam among the markets which he needed to visit soon after taking the office.

Pepsi has also continuously opened the new factories, including the one in Dong Nai province with the investment capital of $45 million and the one in Bac Ninh ($73 million).

Pepsi has just sold 51 percent of stakes to Japanese Suntory, a big group with 200 subsidiaries and 28,500 workers in Japan, the US, Europe and Asia Pacific. Observers have commented that with the participation of the new shareholder, Pepsi would gear up in the competition in the still drink market

Source Vietnamnet,