LOCALIZATION STRATEGY
IN VIETNAMESE MARKET
The cases of
Grab vs Uber &
Parkson vs Aeon
Welcome to the team!
Nguyen Thi Minh Thuong - BABAIU18203
Nguyen Thi Hong Thy - BABAWE18703
Dong Hoang Thuy Tien - BABAWE18298
Pham Minh Trang - BABAIU18220
Tang Nhu Tram - BABAWE18463
01 Introduction to
Localization Strategy
TABLE OF
CONTENTS 02 Uber and Grab
case study
Parkson and Aeon Mall
03 case study
01
LOCALIZATION
STRATEGY
-Firms are expanding globally to
increase their profitability and
profit growth.
-They face two types of
competitive pressure: Pressure
for cost reduction and Pressure
for local responsiveness
-These competitive pressures
place conflicting demands on a
04. global firm.
The cost reduction - Local responsiveness framework
Figure : Bartlett and Ghoshal’s Typology of Multinational Companies:
Global, Transnational, International and Multidomestic (Localization) Strategy
2. UBER & GRAB CASE STUDY
Ready to start?
Events between Uber January 28, 2013
GrabTaxi officially changed its
and Grab name to Grab to confirm its
position in Southeast Asia
June 2014
Uber launches its service in Ho
Chi Minh City
March 26, 2018
Grab car application bought the
entire business operations of
Uber in East South Asia.
As part of the purchase
SoftBank wanted to reduce agreement, Uber hold 27.5%
competitors on in the Southeast stake in Grab
Asian car calling market
Why did Uber fail in Vietnam?
1
Uber failed to
"localize" in Vietnam
Grab's "localization"
strategy is very
simple
LEGAL ISSUE
No legal entity in Vietnam in the first 2
years and Uber's project was rejected
Registered only 2 business lines:
software management consulting and
market research. Legal entity in Vietnam when it enters
s03/2015, HCM City Transport Vietnamese market
Department argued that Uber was Registered many business lines,
involved in the transport business including transportation, software
when the investment certificate was management consulting and so on
issued without this function. Grab’s pilot project was passed by the
Ministry of Transportation.
Cultural
Understanding
Uber’s competitive hostile approach to
traditional taxi firms
Uber is at the center of all criticism regarding
"technology taxi"
Cultural
Understanding
Cooperated with traditional taxi firms, and gradually grew to
become the number one in the market, including taxi and
motorbike service, technology, and delivery
Marketing strategy - Brand positioning
UBER
Luxurious,
pioneering
1
Uber's ads focus
2 on users’ emotion
(e.g: Campaign:
"Uber to Every
Moment")
Marketing strategy - Brand positioning
GRAB
Popular, everyday
Grab’ ads seem to
be more rational:
(e.g: Campaign:
"GrabBike:
Choose GrabBike.
Choose safety &
convenience“)
Marketing strategy - Pricing strategy
Uber & Grab Traditional taxi
Predatory pricing
05/2015
Vinasun launched a
Uber, Grab fares are taxi booking app
only 60 - 70%
compared to that (VNS app) but the
offered by charges remain
conventional taxis unchanged
Grab becomes the number one in the market
Lesson learned Grab understands its “home” market: cooperating
with traditional taxi firms
Taxi service, technology, motorbike, delivery, and
even food delivery
Offer a form of cash payment in an area where
most people do not use credit cards
Grab becomes “friendly” with users
Trip schedules (for safety reasons), emergency
calling numbers in dangerous situations.
Importance of understanding customer’s needs:
offer cash payments (which Uber later followed)
Knowing the company's customers and their
prospects is a key element of any marketing
strategy
03
PARKSON
AEON
PARKSON
- Parkson is currently operating a network of over 100
department stores across Malaysia, China, Indonesia and
Viet Nam
- Parkson entered Vietnam in 2005. At first, it seemed to be
successful
- From 2015, Parkson had gradually closed most of their
stores because the business had been slowing down in the
Vietnamese market.
( source: zingnews.vn)
https://images.app.goo.gl/zxGSunf8ipmBZQho8
In 2009, AEON first came to
Vietnam, under format of
Representative Office
-AEON is known as one of the largest retailing groups in the
world which comes from Japan.
In 2011, AEON cooperated with
-Impressive result of AEON in Vietnam: Trung Nguyên to open
Ministop in Vietnam
In 2014, first AEON Mall in Viet
Nam was opened
2014 - now, AEON has continued
expand their network. There are
02.
6 malls in Vietnam now.
Data collected from www.brandsvietnam.com
Business model
PARKSON AEON
Normal shopping Concept of "Town",
center all -in-one
Vietnamese market: prefers a shopping center including retailer
area, entertainment (cinema, game,…) as well as food & beverage
service
02.
Target customers& Location
PARKSON AEON
Target customers High income Middle income
Location Center area Suburban area
Vietnamese market: at first, Parkson seemed to do well. However, after several
years, the business suffered loss because the high class customers do not
consume much as their expectation
Middle income customers, especially households & kids are
more potential as target customers
Price
PARKSON AEON
Various prices, mostly
Expensive affordable
Vietnamese market: prefers low price shopping
Level of localization
PARKSON AEON
In 2015, there were signals of
After the Covid pandemic, Aeon
wrong strategy when they had
recognized that the demand of
to close one of their shop
cooking at home increased, so they
until 2019, they decided to made an effort to improve the quality
change the strategy from a and quantity of fresh food and the
normal shopping center to all-in- logistic system to adapt customers’
one destination like Aeon and need.
other competitors.
Low High
Lesson learned
Lesson learned for foreign retailers in the
Vietnamese market
The importance of market research
The concept of “town” (all in 1)
Choosing the right Target Customers
The ability to adapt to the local market
10.
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