CFVG - MBA 25 Introduction With the ambition of expanding globally by conquering emerging markets in SEA countries, highly potential Vietnam is chosen to be the next critical market to enter after Indonesia. In a potential, fairly competitive yet immature market of Vietnam, Amazon has a sustainable & long term vision to success. The company ultimately aims at raising brand awareness and step by step build brand loyalty in the penetration year 2017-2018

1. AMAZON
Marketing plan to
Bring the global shopping to VIETNAM

2. TEAM 7
CFVG – MBA 25

3. OUTLINE
Introduction
I. Analysis
II. Marketing strategy
III. Marketing Mix
Conclusion

4. Introduction
• With the ambition of expanding globally by conquering emerging markets
in SEA countries, highly potential Vietnam is chosen to be the next critical
market to enter after Indonesia.
• In a potential, fairly competitive yet immature market of Vietnam, Amazon
has a sustainable & long term vision to success. The company ultimately
aims at raising brand awareness and step by step build brand loyalty in the
penetration year 2017-2018

5. I. ANALYSIS
1.1 INTERNAL ANALYSIS
• Amazon.com
• Amazon online retail
1.2 EXTERNAL ANALYSIS
• Vietnam market overall
• Vietnam ecommerce market

6.  Strengths of Amazon (Worldwide)
1.1 INTERNAL ANALYSIS

7.  Strengths of Amazon (Worldwide)
• The leading e-retailer (2015)
• 13% market share (Internet Retailer’s analysis)
• Fastest company ever to reach US$100
billions in annual sales
• More than $107 billion net sales
• 60% of total US online sales growth
• More than 304 millions of active customer
accounts worldwide
(E-retailer - As of the fourth quarter of 2015).
1.1 INTERNAL ANALYSIS

8.  Strengths of Amazon (Worldwide)
• The leading e-retailer (2015)
• 13% market share (Internet Retailer’s analysis)
• Fastest company ever to reach US$100
billions in annual sales
• More than $107 billion net sales
• 60% of total US online sales growth
• More than 304 millions of active customer
accounts worldwide
(E-retailer - As of the fourth quarter of 2015).
1.1 INTERNAL ANALYSIS
0
20
40
60
80
100
120
Amazon sales revenue ($ bil)

9.  Strengths of Amazon (Worldwide)
• Low cost structure
• Alliances with other companies to offer
superior customer service.
• Economies of scale: lower the inventory
replenishment time.
• Build ups Innovative fulfillment centers and
distribution software to reduce order
fulfillment costs.
1.1 INTERNAL ANALYSIS
Figure 2. Jeff Bezos “napkin sketch” outlining
Amazon’s strategy

10.  Strengths of Amazon (Worldwide)
• GLOCAL strategy
• The strategy of “Go global & act local” - global standard with local taste
• New skills through acquisitions
• Conduct acquiring to companies like Zappos.com, Junglee.com, etc.
• Strong background and deep pockets
• Early successes with books, developed variable product ranges
• Involves as a global E-commerce giant in the last 2 decades.
• Excellent brand image
• Number 1 of the American’s most reputable companies in 2016 (Forbes.com).
1.1 INTERNAL ANALYSIS

11.  Weaknesses of Amazon.com
• Shrinking margins
• Gets low profit margin due to extensive delivery network & price wars
• Had a loss of $359crs in India in the year 2013-14
• Lose focus
• Tries to sell a wide range of products as well as produces it own ones (Ex: Kindle)
1.1 INTERNAL ANALYSIS

12.  Strengths of Amazon Online Retails
• The largest online retailer in US and in
the world
• Earned more than US$90 billion from
online sales (2015)
• Top 25 largest retailers in the world (2016)
1.1 INTERNAL ANALYSIS

13.  Strengths of Amazon Online Retails
• Efficient delivery network
• Created a deep & structured network in order to make the product available even at remote locations.
• Apply free of cost delivery charges in certain geographies
• Ship to more than 75 countries that participate in the Amazon Global program
• Customer centric
• Run customer centric processes with careful data record data on customer’s buying behavior through CRM
• 55% of their customers are repeat buyers resulting in low cost of acquisition of new buyers.
1.1 INTERNAL ANALYSIS

14.  Weaknesses of Amazon Online Retails
• Lack of successful experiences in China – biggest Asian market
• Less than 2% online market share compared with 80% of Alibaba (2015)
• Low profit margins
• Get incredibly thin profit margin to sustain its cost leadership strategy, as well as, its promise of free delivery
1.1 INTERNAL ANALYSIS

15.  Opportunities in Vietnam market
• Growth in young generation
• Population size: more than 94 million people
• Age structure: percentage of population between 18 and 40 years old is 43.2%
• Increasing income
• GDP annual growth rate have miracle number with 6.4% in 2015
• GDP per capita is US$1.684
• Improving in standard of living
• High penetration rate of accessing internet
• 52 million people access internet in 2016 ( 56% population)
• 3.2 million people have at least 1 smartphone (3.4%population)
1.2 EXTERNAL ANALYSIS

16.  Threats in Vietnam market
• Current barriers for assessing into Vietnam market
• Incomplete legal system
• Lack of regulatory oversight
• Complex administrative procedure
• Technology infrastructure still under development stage
• Average connection speed is 3.4mb/s in 2015 (global’s average : 5.6mb/s)
• Online security infrastructure in Vietnam doesn’t work fluently
• Payment transaction isn’t synchronized
1.2 EXTERNAL ANALYSIS

17.  Opportunities in Vietnam Ecommerce Market
• High potential e-commerce market: Total ecommerce value: US$4.01 Billions (2015)
• E-marketplace & E-mall: US$100 millions (2015)
• Growing rate of revenue: 40% in 2015
• Low contribution rate of e-commerce in total of retail market: 0.71%
• Retail revenue only after Indonesia over Asian (US$230 billions)
• Utilize the current global network to lower distribution cost
• Already opened hub in China
• Recently set up affiliate in Indonesia (investing US$600 millions)
• Vietnamese people shifting from traditional direct to online shopping
1.2 EXTERNAL ANALYSIS

18.  Threats in Vietnam Ecommerce Market
• Vietnam ecommerce market is extremely competitive
• 300.000 online shop in Facebook ( according to a study of Facebook in 2015)
• 9.429 ecommerce website active in 2015
• 17.120 ecommerce website is notified/ registered on Ecommerce management portal
1.2 EXTERNAL ANALYSIS
36.1
14.4
7.2
5.4
3.6
3.3
2.1
1.5
1.2
0.3
LAZADA.VN SENDO.VN ZALORA.VN TIKI.VN EBAY.VN VATGIA.VN MIZUTIKI.COM MOX.VN CHODIENTU.VNRONGBAY.COM
VIETNAM TOP ECOMMERCE PLAYERS 2014 (%)

19. SUMMARY
With successful business in the world and a lot of advantages in both
macro & micro market, Vietnam is a potential E-commercial market
for Amazon to penetrate and develop Amazon.com.vn.
However, Amazon.com.vn will also faced with competition & need
the competitive & differentiate marketing strategy in the first 2 years
coming to Vietnam.

20. II. THE STRATEGY
2.1. OBJECTIVES
2.2. SEGMENTATION CRITERIA
2.3. TARGETING
2.4. POSITIONING
2.5. SOURCES OF VOLUME
2.6. DRIVING FACTORS IN THE MIX

21. 2.1 OBJECTIVES
 Quantitative objectives
• Capturing 6% of market share of e-commerce in VN
• Revenue : 10 millions USD
• Number of active users: 1 million active accounts
 Qualitative objectives (in 2018)
• Image: Brand awareness in Vietnam
• 60% young people (from 18-40) in big cities know about Amazon.com.vn
• Traffic: 4 millions visits/month
• Satisfaction: Focus on customers’ experience to build loyalty
• 2/3 customer return to do the next purchases

22.  Age
 Occupation
 Place of residence
2.2 SEGMENTATION CRITERIA

23. City dwellers (mainly in Hanoi, HCMC and Da Nang) who are:
• Students and white collars
• Age from 18 - 40 years old
2.3 TARGETING

24. The Amazon.com.vn is a competitive online retailer in Vietnam which offers:
- wide product range
- fast delivery
- competitive price
- authentic Amazon online shopping experience
2.4 POSITIONING

25. 2.5 SOURCES OF VOLUME
• Vietnamese people known about Amazon.com (about 30%)
• Traditional retailers’ customers
• Customers of shopping mall: Aeon, Metro, Vincom, Lotte, Thegioididong, BigC, Coopmart,
etc.
• Customers of convenient stores: Cirkle K, Shop and go
• Customers of direct competitors: TIKI, Adayroi, Lazada

26. Product
Price
Distribution
Communication
Distribution
• Increase online presence of
Amazon.vn in Vietnam
• Build fast response physical channel
2.6 DRIVING FACTORS IN THE MIX
Communication
• Public the expansion of
Amazon.com in Vietnamese market
• Increase Amazon brand awareness
• Present the winning features of
products & services by Amazon.vn
• Drive customers to Amazon.vn and
make purchase

27. Product
III. MARKETING MIX
3.1. PRODUCT POLICY
3.2. PRICING POLICY
3.3. DISTRIBUTION POLICY
3.4. COMMUNICATION POLICY
Price
Distribution
Communication

28. 3.1. PRODUCT POLICY
 Objectives:
• Conquer online shoppers
• Increase customers’ online purchasing rate

29. 3.1. PRODUCT POLICY
 Actions:
• Offer various product ranges to provide online shoppers with infinite choice:
• Focus non-food products: avoid huge investment in refrigerated storage
• Provide varied categories including books, technology, sport, clothes, baby care, etc. originated from
Vietnam and international nations
• Apply strict policy of product quality management at Amazon Standard
• Apply product eco-system:
• Suggest related products to main searched items with discount for purchasing full set

30. 3.1. PRODUCT POLICY
 Justification
• The product categories must be diversified in width and depth to satisfy customers’ various needs
• Customer satisfaction leads to loyalty

31. 3.2. PRICING POLICY
 Objective:
• Offering affordable price in comparison with Modern Trade channel.
• Maximizing long-term profits by sales volumes

32. 3.2. PRICING POLICY
 Actions:
• Apply dynamic Pricing: price adjustment based on
demand and competitors
• Change the price many times every single day (even more
times than the competitors do) to provide customers the
lowest price
• Provide the lowest price to some key products that
Amazon has competitive advantage

33. 3.2. PRICING POLICY
 Justification:
• Lower price is extremely important to all retailers especially when penetrating VN market – a price
sensitive market
• Strategy of volume over value to win market share during the development phase
• Many research showed that what customers buy in the next times relates much to their first
purchase, so cross-selling (using good recommendation relying on customers behaviors +
promotion) will help to increase sales

34. 3.3. DISTRIBUTION POLICY
 Objectives
• Increase online presence of Amazon.com.vn in Vietnam
• Build fast response physical channel
• For product available in Vietnam:
• Lead-time in Hanoi, Ho Chi Minh City and Danang: under 6 hours
• Lead-time outside 3 cities: 24 hours
• Product available outside Vietnam:
• Lead-time: under 4 days

35. 3.3. DISTRIBUTION POLICY
 Actions
• Increase online presence of Amazon.com.vn with Vietnamese customers
• Customize Amazon.com to Amazon.com.vn
• Buy a Vietnamese online retailers: TIKI or Adayroi
• Focus on shopping experience: easy to shop
• Decrease the shopping checkout time: 1 step check out
• Secure and easy to use payment gateway

36. 3.3. DISTRIBUTION POLICY
 Actions
• Build fast response physical channel
• Build up a Strong and comprehensive distribution network:
• Build 3 local distribution centers in Bac Ninh, Ho Chi Minh city and Da Nang.
• Build more 20 nationwide distribution hubs (using partnership with delivery agency)
• Use the fulfilment center in China as a hub for product from Amazon global.
• Create a fast delivery network:
• Set up Amazon Express to take care of customer in 3 main cities (Hanoi, HCM, Da Nang)
• Partnership with Delivery Agency

37. 3.3. DISTRIBUTION POLICY
 Justification:
• A customized shopping platform with lowest checkout time and secure
information will increase the conversion rate (successful order).
• Acquiring a Vietnamese ecommerce company to use its’ data history is
a important step to build a customer – centric platform
• A fast response physical channel will increase the shopping
convenience, one of the most competitive factors in the market.

38. 3.4. COMMUNICATION POLICY
 Objectives:
• Public the expansion of Amazon.com in Vietnamese market
• Increase Amazon brand awareness
• Present the winning features of products & services by Amazon.vn
• Drive customers to Amazon.vn and make purchase

39. 3.4. COMMUNICATION POLICY
 Actions:
• Pre-opening Communication: a large-scale cross-media plan to raise attention of audience to the
launching of Amazon in Vietnam
• TV/ poster/ press campaign
• TVC on television: entertaining & lifestyle channels
• Poster, billboard at public areas
• Press conference
• Media designed for the target: lifestyle magazine
• Viral video series thru social media (Facebook, Youtube)

40. 3.4. COMMUNICATION POLICY
 Actions:
• Consumer Acquisition
• SEO/ SEM
• Retargeting on web and skype

41. 3.4. COMMUNICATION POLICY
 Actions:
• Promotion
• Penetration promo: offer % off to stimulate user registration
• Category promo: offer discount to 1 product category on 1 certain day of the week - i.e. 5% OFF for
Books on Monday
• Customer Retaining (CRM)
• Update product lists and promotion to customer database regularly
• Educate customer on new trend of lifestyle to create demand for purchase new items
• Follow up with customer satisfaction
• Partnership: offer special deal to partner/ alliance brands

42. 3.4. COMMUNICATION POLICY
 Justification:
• Promotion: give customers a chance to try our products and services and give the
best deal to them
• Customer retaining:
• Listening to customers’ demand and feedback is crucial to maintain the culture of customer-
centric of Amazon
• Educate customer of new living trend is a smart investment for sustainable future revenue
• Partnership enables us to attracts the shared target customers with other brands to
utilise their database and bring added values to our consumers at the same time

43. Conclusion
• Vietnamese consumers, especially young generation spend more and increase online purchasing volume.
They’re becoming more trendy and generous in personal buying, however price-sensitive is still a key
characteristic.
• Amazon has strong potential to succeed provided that it offers wide range of products with quick & easy
order and delivery process along with affordable price.
• Faced with high competition from the current market and new market comers, Amazon’s prime focus is to
raise brand awareness and build brand loyalty by applying smoothly and consistently the 4 Marketing Ps.
• A strong presence and good reputation of the Earth’s biggest online store with unbeatable price and
excellent shopping experience should enable Amazon to achieve set objectives and become the leader in
Vietnam’s e-commerce market.