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Bringing a SME to Vietnamese market - OLLA Formula Milk

Robin Food is a small enterprise, producing Formula Milk for babies and children in the Netherlands. The name Robin Food is inspired by the hero Robin Hood, who shares wealth and makes everyone happy.

From that inspiration – the vision of the company is that every child, regardless of poor or rich, Asian or European, black or white, all deserve high-quality milk for their best development.

Therefore, the company focuses on producing high-quality formula milk powder at low prices for developing countries including Vietnam, which leads to the cooperation with VIEC to export product directly to Vietnam

 

A Quick View Of Vietnam Formula Milk Market

Vietnam – one of the fastest-growing markets for F&B segments in South East Asia, has presented as an attractive market for both domestic and foreign players. 

With an average GDP growth rate is approximately 6% in 2020 despite the pandemic. The living standard of the country is still improving day by day.

Alongside the increasing number of working mothers with busier lifestyles. Vietnam turns out to be an attractive market for the formula milk industry.

Additionally, with the EVFTA coming into effect in 2021, all tariffs on processed food from Europe (including infant milk powder) will be phased out after a maximum of seven years, which will clear the way for more dairy imports from Europe.

Lastly, Vietnamese consumers have a strong preference for European brands, due to a perception that foreign brands have better quality standards, and baby formula milk is no exception.

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Our customer challenges

Financial Limitation and Time Pressure

As an SME with limited financial resources, Robin Food just affords a modest-budget marketing campaign. The company can not spare a huge amount of money for market penetration as they are not willing to pay a huge fortune for branding and advertising like most of their competitors often do. 

Apart from the above financial limitations, OLLA required VIEC to deliver the desired results within a short period, expected to start the sales in 6 months during our cooperating process. 

This is, without doubt, a tough challenge, however, those challenges are by no means surprising VIEC, because many young SMEs like Robin Food are widely anticipated to experience such barriers.

The product packaging does not fit Vietnamese consumer’s perception

Rather than packing with tin cans, OLLA formula milk uses carton packages, which is a common practice in the Netherlands, and other European countries recently. 

This is mainly because the carton packages are more efficient to pack and ship and also require less packaging material and are more friendly to the environment than tin cans. Besides, the packing of two 400 – gram bags inside a milk carton is more convenient for consumers to use and store the package for a long time.

However, in Vietnam, consumers consider carton packages low-quality products. And the carton package seems not durable compared to the tin cans. 

The competition landscape 

The price of OLLA formula milk is relatively high compared to domestic brands such as Vinamilk or Nutifoods Vietnam. 

Hence, OLLA formula milk mainly targets the market of medium and upper-middle-income groups. However, the market for this group is dominated by Abbott (Abbott Grow, Similac Pro advance, PediaSure), Glico, Aptamil…

Therefore, a new player like Robin Food needs careful research and strategic planning to hit the spot and maintain its position in the market. 

The government restriction 

The import-export procedures in VietNam, considerably different from European countries, pose a huge challenge for most foreign brands.

The Vietnamese government has applied strict regulations Food Safety Number 55/2010/QH12 on imported formula milk in an attempt to encourage breastfeeding.  

All of those become major obstacles making market penetration less attractive, not to say impossible for inexperienced companies to enter a rigorously-controlled field like baby formula milk.

However, “Fire proves gold, adversity proves men” And here comes our approach:

 

 

Our Approach

Despite all the obstacles, at VIEC we applied the proven method to bring Olla formula milk to the Vietnamese market. 

First, we began with market research to understand what is the market proposition of Olla Formula Milk in the Vietnamese market? And Whether Vietnam’s consumers accept Olla Formula Milk? 

Instead of performing traditional market research, which will cost your business a lot of time and money to answer the above questions.

At VIEC, we take advantage of our exclusive business network to get the customers’ response toward OLLA baby milk powder in real life. No more guessing jobs, and unrealistic market insight. 

And at the same time, via our exclusive business network, OLLA Formula Milk also has a chance to create footprint in the market. 

After the product is approved by the Vietnamese consumers, our VIEC team start to introduce and connect OLLA Formula Milk to big retailers, and milk distributors across the country.

By working closely with clients, we keep them informed of any latest updates about the whole process of entering Vietnam.

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Finally - The result

Thanks to VIEC’s exclusive network in the FMCG industry and all of those efforts. 

After the 7th month of focused direct marketing campaigns, and sales, the product OLLA formula milk for babies from the Netherlands finally go into the shopping carts of Vietnamese people.

And VIEC has helped Robin Food directly cooperate with large formula milk distributors and online platforms in Vietnam, generating revenue of approximately 1.2 million euros. 

The brand also gets a  warm welcome from Vietnamese consumers. 

BEYOND THE STORY OF OLLA FORMULA MILK FOR BABIES, IT’S YOUR TURN NOW

“If you don’t dare to try, you are already losing the battle. When you dare to try, you are at least halfway to success”

Behind the long and hard journey which is full of ups and downs with Robin Food, what we have obtained is not simply the reputation of a reliable commercial representative, but a lot more lessons and messages empowering our goals and mission on the road ahead. What’s more, during this project, VIEC has built up and expanded the network in the Vietnamese market as well as a system that lays a firm foundation for other projects to thrive.

 

Want to be the next chapter in our journey?