Direct marketing and multi-level marketing techniques have been novel and rather suspect concepts in Vietnam until very recently. This is rapidly changing as large internationally recognized players move into the market. Decree 110/2005/ND-CP, the Decree on the Administration of Multi-Level Sales Activities, issued August 24, 2005, provides the basis for regulation of this sector. Previously, foreign-owned companies could only conduct direct marketing activities through a Vietnamese partner unless they had in-country manufacturing. There are still issues governing distribution that await clarification as the legal environment evolves, including how Decree 110 will relate to changes in distribution rights under Vietnam’s WTO commitments as of January 2009.
The logistical barriers to direct marketing include the lack of consumer data, although this too is changing, a scarcity of mailing lists, poor local transportation and delivery services, complex product licensing requirements, having to use a primarily cash-based payment system because of low credit-card penetration and difficulty doing automated bank billing, and ambiguous regulations and variable interpretations of Decree 110 by licensing authorities related to conducting training and providing printed sales materials.
More recently, multinationals with global reputations for multi-level or direct marketing prowess have introduced new techniques and structures to Vietnam and the ranks of sales agents/distributors are beginning to grow. These include companies in personal care and nutrition as well as household products. Some are setting up production in Vietnam as well. Foreign life insurance companies have been licensed for some time and have assembled large teams of agents who engage in traditional telemarketing, door-to-door selling, and workplace marketing in urban areas.
For business-to-business marketing, direct mailings/faxes and emails are widely used; however, mailing list databases are typically created in-house. Some leading international consumer market research firms operate in Vietnam and develop demographic data for their clients.