Group to invest bt4 bn to whet the country’s growing appetite for beverages
The TCP Group will invest Bt4 billion in Vietnam in the next three years to boost its marketing capabilities.
The group opened its first wholly-owned overseas office in Vietnam “TCPVN Company Limited” earlier this year, and plans to invest heavily in market research, sales, product development and distribution capabilities.
The company manufactures several brands of energy drinks, including Krating Daeng (Red Bull), Som Plus, Sponsor, Puriku, as well as “Warrior”, its latest product geared for the Vietnamese market.
“We are the first foreign company in Vietnam to hold full ownership of our business,” Saravoot Yoovidhya, chief executive officer, said during a seminar at their office in Ho Chi Minh City on Saturday.
“The opening of this office in Vietnam is part of a five-year plan announced in 2017 to triple our total group sales to Bt100 billion annually,” he said
“The reasons Vietnam was chosen as the location of our first overseas office was because of the lifestyle of the Vietnamese and the country’s economical potential,” he said.
Vietnamese consume energy beverages on a more regular basis than Thais, Saravoot explained.
They tend to consume energy drinks with ice in a glass along with their food, as opposed to drinking them straight from the can, he said. Saravoot even took a group of reporters to a market in the city to show how consumer behaviour towards energy beverages in Vietnam is different from that in Thailand.
This means that the consumption rate of energy beverages is much higher in Vietnam than in Thailand. Moreover, the company’s products are not required to carry warning on over-consumption, as opposed to Thailand where the company faces this regulatory challenge, he explained further.
The high consumption rate also means that the energy drink market in Vietnam is highly competitive, he says.
Saravoot revealed that TCP’s energy beverage brands have a combined market share of up to 42 per cent in Vietnam and expects total sales revenue in the country to reach Bt10 billion by the end of this year.
“We aim to increase our market share to more than 50 per cent in the next 5 years,” Saravoot said.
The Vietnamese economy is the other reason leading to TCP’s entry into the country.
“It is a commonly known fact that Vietnam is one of the fastest growing economies in the Asean region as well as in the Asia Pacific,” Saravoot said
“This is reflected in our sales, which has been growing by 25 per cent annually in the past three years,” he said.
Vietnam’s economy has a gross domestic product (GDP) of $223.9 billion, and is estimated to grow by up to 6.8 per cent in 2018. The energy drink market in Vietnam has a total market value of Bt25 billion with a growth rate of up to 6 per cent.
“Our investment in Vietnam is part of a larger vision of making our business organisation an entity which brings pride to Thailand on the global stage,” Saravoot said.