Today, it is not difficult to see big headlines in newspapers with the content such as: The people in locality X lack clean water. One can live in a nice place, eat meager food and drink, but clean water is a vital, unaffordable necessity.
Business related to products known as “white gold” in a large demand market, water purifier brands such as Kangaroo, Daikiosan, Makano, … are bringing in billions of dong profits per month for businesses. industry.
According to statistics, the water purification market in Vietnam has been growing rapidly in recent times.
The report “Vietnam water purification market according to techniques, sales, forecast and competitive opportunities 2011-2021” by TechSci Research also gives a positive forecast of growth of up to 12.4% during the period. sections 2016-2021.
The driving force behind this fast growing market comes from the growing concern for consumer health. According to statistics compiled by The Conference Board Global Consumer Confidence in collaboration with Nielsen, in 2019, the Vietnamese health concern index is 44%, the second highest after work interest. forty six%.
Incomplete statistics from the Vietnam Chamber of Commerce and Industry (VCCI), the whole market has more than 400 brands of water purifiers, both domestic and imported. Some prominent names such as Karofi, Kangaroo, A.O.Smith …
Many foreign giants are also targeting a lucrative market like Vietnam.
The market is large, with great demand, but water purifiers are often more quiet in the media than products in the electronics industry such as phones, televisions, washing machines or refrigerators.
In large stores, not superficial occupying a lot of areas such as televisions, refrigerators, no eye-catching luxury displays like smartphones, humble water filters standing at a corner, but an indispensable product list of any chain of electronics.
For example, the Green Electronic System is selling 10 brands of water purifiers, from famous products such as Kangaroo, Karofi, Sunhouse to Chungho, Daikiosan, Midea, … Pico chain also sells 9 brands water purification, from domestically produced to imported goods. The most terrible is the big market electronics with hundreds of products from 18 different brands.
Quietly following these electronic systems, water purifier manufacturers do not need to build their own distribution channels to bring products to every corner, easily accessible to hundreds of thousands of consumers. use needs.
Although it is a relatively tight market, it doesn’t necessarily mean peace. In less than a decade, consecutive new players enter the market with a modern, daring approach to customers, forcing the “elders” like Karofi or Kangaroo to change themselves if they do not want to fall behind. behind.
In 2011, within just 15 minutes of a break between two halves at the Champions League final, Kangaroo water purifier brand was repeated more than 50 times on national television channels.
“Welcoming the pitch” since 2003 with the main product being the Kangaroo water purifier of the Viet Australia Refrigeration Electrical and Electronic Group Joint Stock Company at that time was not known by many people. It was not until that 2011 event that Kangaroo came to light thanks to an effective marketing campaign.
The success in the first product line, the water purifier, created momentum for Kangaroo to expand into a leading enterprise producing leather goods, kitchenware, refrigeration, … in Vietnam with more than 700 product models up to now. present.
Overcome, by 2017, Kangaroo boldly increased its charter capital from 60 billion to 700 billion. At the same time, to put effort into research and development and launch the first Hydrogen exclusive water purifier. This time also marks a milestone in corporate profits starting to grow dramatically.
If in 2016, Kangaroo’s revenue reached 1,250 billion VND, by the end of last year, the company recorded 2,369 billion VND in revenue, which increased rapidly by nearly 90% after only 4 years. In particular, according to Kangaroo, the main products of the business such as water purifiers, household goods, kitchen appliances, sanitation, refrigeration, … accounted for more than 80% of the group’s revenue.
Profits from trading water purifiers and kitchen equipment also brought businesses more than 121 billion VND in 2019, the highest among enterprises in this market.
In the first 9 months of 2020, Kangaroo continued to show that business efficiency continued to increase with 1,844 billion VND in net revenue, 175 billion VND in profit after tax; increase 4% and 111% respectively over the same period last year.
Born a year earlier than Kangaroo, Daikiosan and Makano water purifiers of Dai Viet Refrigeration and Electrical Engineering JSC (Dai Viet) seem to have run out of breath before new competitors in the first phase and only in recent years have balance again.
Following Kangaroo’s strategy of spending money on advertising in the early days of entering the market, Dai Viet has constantly transformed, not hesitating to invest hundreds of billion VND in huge marketing campaigns.
Talking to the press, Daikiosan water purifier brand representative shared, during the last epidemic, while the media and advertising for the electronics industry, Dai Viet increased spending nearly 4 times over the same period. period last year to stimulate demand, increase brand awareness.
In addition, the company also launched a 100 billion VND support package with discounts, gifts, transportation costs, installation … for customers during the season.
On September 12, Dai Viet General Director personally livestreamed the product introduction on the company’s fanpage within 2 hours, earning 100 billion VND.
Thanks to loud media campaigns, Dai Viet’s business results have clearly flourished in recent years.
If in 2016, Dat Viet’s revenue reached 266 billion VND, after-tax profit was 18 billion VND, only 3 years later, enterprise growth would be equal to times. By the end of 2019, Dai Viet reached 1,165 billion VND in revenue and 102 billion VND in profit, increasing 4.3 times and 5.6 times compared to 2016.
The rapid growth of business results is a solid basis for Dai Viet to boost production when last June the enterprise officially received the handover of the certificate of land use rights with an area of 6.2 hectares in Hai Son Industrial Park ( Long An) to build factories.
Expected in October 2021 will inaugurate and put into use. This is considered the largest water purification and cooling machine factory in Southeast Asia.
Another name in the water purifier market is Shark Phu’s Sunhouse Household Appliances Co., Ltd. with Sunhouse’s main water purifier, which is also a respectable name in the water purification industry in Vietnam. the annual turnover is over hundreds of billion dong.
From very early on, the owner of Sunhouse realized that although Vietnamese people prefer big brands, they would consider spending less money to buy products with equivalent quality.
Pursuing a policy of good and cheap goods, instead of importing raw materials at high prices and processing like other companies in the industry, since the 2000s, Sunhouse has invested more than 20 billion VND to do by himself. production line owner, product price reduction.
By mastering the technology and reducing production costs, by 2007, the Group owned Sunhouse water purifier brand, approximately at breakeven point. By 2019, the sweet fruit will be clearer when Sunhouse’s home appliances maker earns 721 billion dong in revenue and 16 billion dong in profit, 1.8 times and 1.7 times higher than 2016, respectively. .
The parent company of Sunhouse Manufacturing Company Limited is Sunhouse Group JSC – which has also grown strongly in recent years. Notably, by the end of 2019, Sunhouse Group’s revenue increased by 1.4 times to 3,486 billion dong, but profit after tax tripled to 146 billion dong compared to the 3 previous years.
Focusing on distribution channels with wide coverage, up to now, Sunhouse has over 5,000 distributors with 60,000 points of sale nationwide. Nowadays, it is not difficult to see the image of Sunhouse household appliances, which are prominently displayed on the shelves of big supermarkets or in the electronic chain system.
Joining quite late when the big guys have shaped the market, but new product brands such as Karofi water purifier, AO Smith, … show the extremely strong resilience of a young business, with the growth rate. Revenue growth over the years calculated by times.
Not expanding massively to other product categories such as household appliances, kitchenware, and refrigeration as companies in the industry, from 2012 until now, Karofi Vietnam JSC has focused on focusing on a single product: Water purification with the brand Karofi.
As a result, this business has quickly surpassed the big men with long-term experience such as Kangaroo and Sunhouse to become the leading group in the market share of water purifiers in Vietnam, according to Karofi data. Products are exported to 33 countries around the world.
Strongly accelerating, by 2015, Karofi Vietnam spent trillions of dong to build a new factory with the largest and most modern scale in Vietnam. In 2017, the factory was put into operation with a capacity of 1 million finished products / year to meet both domestic and export markets.
Therefore, although there is only one key product, the annual revenue and profit of Karofi is not inferior to that of any refrigeration manufacturer. In 2019, the business achieved 726 billion VND in revenue and 25 billion VND in profit, increasing 2 times and 8 times compared to the previous year.
Having gained a strong foothold in the water purifier market, the company has recently expanded its production portfolio by launching a subsidiary, Korihome JSC, to manufacture more air purifiers and heating, juicer,… in limited quantities.
After low profits over the years, by 2019, this subsidiary also started to bring in the first interest, reaching 4 billion VND with revenue of 250 billion VND.
Also focusing on a single product, a water purifier, AO Smith Vietnam Co., Ltd., a member of AO Smith Group (USA), entered Vietnam in 2017 and quickly achieved positive growth after just one. the first year reported a loss.
To enter the water purifier market in Vietnam, A. O. Smith Group took 5 years to prepare, research on consumer needs and promote trade. With 145 years of experience established from the parent corporation, plus huge financial resources, AO Smith Vietnam has aggressively occupied the market with brands such as water purifiers, watershed water purifiers, water heater,…
Vietnamese goods, with American quality, but the price is only higher than products in the same segment from 2-3 million VND, so the devices from A.O Smith are popular with many consumers. In addition, every month, this business also organizes lucky numbers for customers with the value of the prize up to tens of million dong.
Thanks to that, in 2019, the business started to report profit, reaching 3 billion dong while the same period last year a loss of 2 billion dong. Revenue also increased from VND 181 billion in 2018 to VND 195 billion in 2019.
Clearly, it can be seen that in less than a decade, the water purifier market in Vietnam has witnessed many changes, the transformation of the old and the entry of new people. It can be said that this market has never been as calm as it looks.
“A few years ago, it was easy to do because the demand was high and the product was not covered, but now the market is very competitive. A lot of men also jump into service,” said Anh Chau, owner of a machine brand. Water purification business follows the model of taking goods imported from big agents, making private brands and then selling directly to customers.
While big brands following electronics chains are increasingly reaching out to localities, small brands that focus on exploiting customers in the fringes of big cities and provinces are increasingly confined.
According to Mr. Chau, to live, it is necessary to focus on his strengths. Particularly, the company focuses on taking care of existing customers with supporting policies such as replacing water filters. As for the sale, since the market is now very competitive, it has to be a separate product line from the market to live.
To survive in this competitive market, forcing businesses in the industry to come up with a way to outperform their competitors, from pouring money into advertising, running promotions, to rewarding, developing exclusive products, aimed at the high-end segment, … that the writer temporarily called the chameleon strategy.
For example, in order to have unique products to serve domestic customers, Dai Viet has launched a 5-sided feng shui water filter with 5 specific colors for each segment, using RO filter technology with advertising. is “increasing prosperity for each homeowner”.
Or as the General Director of Dai Viet personally livestreamed the sales during the outbreak, the physical stores had to be temporarily closed.
AO Smith again hit on the psychology of many consumers like foreign goods with a commitment to American standard quality, US copyright technology, … with gift packages such as gold gifts, additional products or interest payments. rate 0%.
Meanwhile, a big man like Kangaroo emphasizes on high-end product lines, using exclusive alkaline hydrogen ion technology developed by the company, targeting the segment of customers with few companies exploiting.
Other brands spend a lot of money on marketing strategies and aggressive product promotion. After-sales and unique customer care policies are introduced to attract new customers and increase sales.
Most recently, on June 10, Karofi opened a policy that allows customers to exchange and return products for free within 60 days from the time they pay bills. Accordingly, customers return the product or refund if there is a technical error or simply a change in demand.
After more than a month of running this program, Karofi’s water purifier sales reached 21,000, of which only 8 were exchanged.
With the transformation to adapt by large, experienced corporations and new breeze from young businesses, promises to bring excitement to this market in the near future.
Source: vietnambiz.vn – Translated by fintel.vn