How a shopping culture based on personal loyalty can be transformed into the acceptance of single and multi-chain loyalty programs?
Vietnam hast still approx. 80% of retail market still in Mom and Pop environments and there for customer loyalty is based in most transactions still on acquaintanceship and personal connections. However due to the emerging of international brands which are preferred by urban young families and Gen Z, single and multi-chain loyalty programs emerged the last years in Vietnam.
1. Traditional Loyalty programs
Loyalty programs were traditionally mainly limited to an upper class urban elite which are using credit card programs or flight miles collection systems. Recently supermarkets like COOP, Target and Vinsupermart and other retailers like Pharmacy and Electronic chains have added card and point based programs for single chain usage. Besides a lot of Service and especially F&B places are using either card point collections (especially international brands) or traditional buy 10 get 1 free stamping cards (local brands). Given the limitation of the programs and the "try new" culture of urban citizens, this programs drive only limited loyalty if convenient, despite direct and great benefits and good customer experience.
2. App based Loyalty Programs
E-commerce companies like Tiki started app based programs and further retailers like Muji are adding to it. Recently Multi-brand app programs like Shopback (Payback program for online shopping mainly E-commerce and Travel) and Savyu (Payback & voucher program for F&B places) have emerged. This programs are slowly picking up however similar as on E-commerce they have a low retention rate as their usage adds more steps to the normal shopping journey of customers.
Another interesting app based multi store loyalty program is given by Grab, the dominant ride-hailing company in Vietnam and South-East Asia. For points generated on rides it is possible and quite worthy to redeem them for all kinds of fast food and restaurant offers on Grabfood. (E.g. with a couple of rides, I can redeem a McDonalds or KFC starter menu). Grabs point system is well accepted as for many commuters especially Grab Bike is a daily transportation system and therefore points are accumulated frequently and can be redeemed.
3. Multi-brand Loyalty Programs
Beside super app programs like Grab, Shopback or Savyu, which mainly add another layer to the customer experience, there are no multi-brand loyalty programs in Vietnam so far. This could be given the fact that the willingness to cooperate on a customer and data-level is not so high and also that complicated point based systems with discounts rather than direct redeem are culturally not so accepted.
Conclusion
Transforming Vietnam’s entrenched shopping culture—one that has long relied on personal loyalty through familiar connections—into a more structured acceptance of single and multi-chain loyalty programs presents both challenges and opportunities. As the nation experiences an influx of international brands that appeal to urban families and the Gen Z demographic, there is a clear shift occurring. Traditional loyalty programs, once catering primarily to an urban elite, are evolving through the adaptation of point-based systems by supermarkets and local F&B entities. However, their effectiveness remains limited due to cultural preferences and a desire for convenience.
The rise of app-based loyalty programs marks a pivotal transition, particularly with platforms like Tiki and Grab. While these technologies promise enhanced engagement, they face retention hurdles as consumers navigate more complex shopping journeys. Furthermore, the absence of coordinated multi-brand loyalty systems highlights a need for industry collaboration that prioritizes customer experience and data-sharing.
To foster a successful transition to single and multichain loyalty programs, stakeholders must prioritize cultural alignment and ease of use. By simplifying reward mechanisms and promoting partnerships among brands, there is potential to cultivate a more dynamic loyalty landscape in Vietnam. As the market evolves, embracing innovative loyalty solutions could secure more robust connections between consumers and brands, ultimately driving engagement and sustaining growth in this diverse retail environment.
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