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NGUYỄN TẤN DŨNG 100%

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MACRO ANALYSIS

PESTLE
P
Pol
oli
iti
tic
caal
l
China is among the fastest countries to The trade barrier policy from China in
successfully control the COVID-19 2011-2012: China announced a ban
pandemic and make an economic on bird's nest import because of
recovery. By late 2021, the country has high amounts of nitrate detection.
regained the stable environment for However, China agreed to allow the
businesses to operate. (WorldBank, 2020) importation of the bird’s nest again
in 2015 (“A Comparative Analysis of
China is ruled by a single political party, Thai Bird’s Nest Export to Chinese
allowing it to have a stable political Market,” 2019), along with very strict
environment, however, the Chinese policies about safety and
government has an overwhelming traceability of products.
control over its market with strict
regulations, especially with health-related ------------------------------------------------------
products. (EuroMonitor, 2020)
To find success in this potential market,
Promotion and distribution channels are Yen Viet has to pay close attention to
also heavily monitored, requiring administrative requirements. Parts of
businesses to be extremely careful with the work on exporting bird’s nests to
their operations. There are also concerns China has been carried out by the
that the Chinese government is very Vietnamese government (GSO Vietnam,
protective towards local businesses, 2021), but the challenges still remain
making it hard for foreign firms to thrive. within China; some can be addressed by
(CNBC, 2021) partnering with Chinese firms.
1
MACRO ANALYSIS

PESTLE

MARKET STRENGTH

GDP 2020: $14,722.73B (+6% versus 2018)

(Macrotrends, 2021)

Income: An individual working in China makes

about 29,300 CNY per month on average. Salaries

E
range from 7,410 CNY (the lowest average) to
131,000 CNY (the highest average)

E
omi
ccoonom c
n i
CONSUMPTION TRENDS
Consumption of bird's nests has evolved over the
years from a women's privilege to a cuisine
appropriate for individuals of all ages.

Young Chinese generations are excited by the

bird's nest. Consumption of bird's nests is
quickly increasing among highly educated
youngsters, especially those born between 1985
and 2000 (gen Z and some of gen Y)

Top three importers are: Indonesia, Malaysia,

Brazil (ITC, 2020). Indonesia is known among
Chinese consumers as the source of some of the
best quality bird nests worldwide. In the first
half of 2019, China imported a total of 69.5 tons
of bird’s nests and 57% were from Indonesia.
(Edible Bird’s Nest Market Committee, 2020)

The Chinese economy is growing healthily. Its huge size

and wealth make this an extremely lucrative and potential
market to enter. The growth of young, well-educated class
with moderate to high income increases demand for
healthy products, including foreign imported bird’s nests.

2
MACRO ANALYSIS

PESTLE

cialoggi
ica
cal
l
Soocialo
S
GIFTING CULTURE
In China, the art of gift giving plays an important role since
it helps individuals to express respect, dedication, and
preserve and develop connections among family members,
coworkers, and friends. (LTL Mandarin School, 2019)

Occasionally, Chinese people prefer handing others gifts

that benefit health, such as fruits, herbal products,
ginsengs, bird’s nests, vitamin supplements, …etc. (Studycli
Org, 2021)

HEALTH CONSCIOUS EATING

Chinese people had already started to explore the
relationships between food and human health some 6,000
years ago. (Li, L.T.,Yin, L.J ; Saito, M, 2004)

The Complementary and Alternative Medicine (CAM)

system via herbal/traditional VDS, the National Nutrition
Programs for healthy food and dietary supplements over
2017-2030, and Traditional Chinese Medicine programs
seek out to enhance national nutrition while also
encouraging individuals to investigate herbal
remedies as a long-term treatment or prevention for health concerns. (Euromonitor, 2020)

China is rapidly becoming the world’s largest market for healthy eating. (Daxue Consulting, 2021)

FOOD & SOCIAL STATUS

Rare and costly foods are frequently used to denote wealth and socioeconomic status. These meals are
frequently animal-based and high in protein, yet they are difficult to come by owing to scarcity, high cost, or
importation requirements. Items like the bird's nest, shark's fin, bear's claw, and lobster are linked with the high
class in traditional Chinese culture

Both Chinese traditional cultures and modern cultures allow for sales of
healthy products to grow. Highlights to focus on include: traditional healthy gifts,
healthy eating trends and premium food products.

3
 MACRO ANALYSIS

PESTLE

.
e ch nol
olo
oggy
yca
cal
l
l
T
T
T .
e chn
INTERNET INTEGRATION

DIGITAL ERA
Over 50% of the Chinese Alibaba's livestream platform Taobao
consumers can get access to the recorded $2.9 billion in sales on Singles'
Internet today (Daxue Consulting, Day 2019, accounting for 7.5 percent of
2021) total sales on China's most important e-
commerce shopping day. (J.P.Morgan,
WeChat is the most common 2020)
social network in China. Health
information is mostly searched Social commerce is upgraded to a higher
on WeChat. It enables its users to level (e.g. Douyin allows users to buy
communicate with doctors easily products they see streaming on the app in
for more individualized health real time by tapping the video three times)
information. (BMC Medical
Informatics and Decision Making, The popular payment method is digital
2017) wallets like WeChat Pay, Alipay
(J.P.Morgan, 2020)
There were many concerns with
health information on WeChat, AI and drones are researched by Alibaba
including lack of reliable and JD.com to meet the demand for quick
information, too much similar data delivery and effective distribution
and too many ads (BMC, 2017) (Harvard Business Review, 2020)

SOCIAL COMMERCE OVERALL

LIVESTREAMING E-COMMERCE FOCUS

The rise of livestreaming is a Most Chinese consumers tend to make
key trend in 2020. E-commerce buying decisions online. The application
merchants can either show live of digital wallets and robots in
video marketing products on distribution may make online shopping
their own website or work with more convenient. Understanding how to
live streaming influencers to take advantage of social media and E-
advertise brand products via their commerce platforms is an important
personal livestream channels step in promotional strategies.

4
MACRO ANALYSIS

PESTLE

L
L
Le
e
eg
ga
aal
l
l
TARIFF

For edible products of animal origin, not elsewhere specified or

included: Salanganes’ nests exported from Vietnam to China
Trade tariffs: MFN duties (Applied): 25%
Preferential tariff for ASEAN countries: 0%

REGULATIONS

B210 - Tolerance limits for residues of or contamination by

certain substances: (Food Safety Law of the People's Republic of China
(2015 Revision) ): Article 26 - (I) limits of pathogenic microorganisms,
pesticide residues, residues from veterinary medicines, biological toxins,
heavy metals , and other pollutants, and other substances hazardous to
human health in food, food additives, and food-related products

B820 - Testing requirement: Measures for the Administration of Organic

Product Certification (2015 Revision) / Supervision and Administration of Inspection
and Quarantine of Edible Animal Products Entering and Exiting China (2015, No.159)

Article 23: The entry-exit inspection and quarantine institutions of all regions s hall
carry out entry verification of declared imported organic products, and examine
the photocopy of the certification
Article 26: the inspection and quarantine department shall according to the requirements
of AQSIQ, require for sampling of the imported products and send the relevant samples to
l laboratory for testing

China has a favorable bird’s nests export tariff for Vietnam thanks to
good regional trade relationship, however, the product itself has to pass
extensively rigorous testing standards to qualify for entering.
5
MACRO ANALYSIS

PESTLE

Environmental
Environmental
There are no major bird’s nests cultivation and
production sites within China, meaning little potential

for local bird’s nests sourcing.

Rise of environmentally sustainable consumption:

30-49 year olds: most prepared for sustainable
consumption; 20-29 year-olds: stronger awareness of
sustainable consumption, but is limited by income and
purchasing abilities. (Report on Consumer Awareness
in Sustainable Consumption, 2017). Willingness to pay
premium for green products with top search
keywords green, organic, no added, no color

Potential for foreign bird’ nests by export,

especially with non-processed varieties.
MACRO ANALYSIS

CAGE
Geography
Geography
Distance
Vietnam-China shares a
border, meaning low

Border Logistics
Many ports and customs
connecting the two countries,
Internal Distribution
China has a highly
developed logistics
shipping fees & short meaning fast import/export infrastructure including
delivery time process. Shenzhen, Guangzhou airways, waterways ,
and Fuzhou cargo port are highways and railways
Storage Condition quite preferable for importing with integrated use of
Bird nests should be stored EBN from VN to China thanks automation technology,
in a dry, clean and cool to their geography (7-24 artificial intelligence &
place, avoid keeping in a shipping days), sufficient Big Data, capable of
place that is too tight, has container volume, connection managing very large
high humidity, and is with international routes to EU, volumes of domestic
exposed to direct sunlight. South East Asia, Macau, Hong and international flow of
Fast shipment and Kong, Australia, etc. (Freight goods. Efficient product
warehouses with from China to Vietnam by distribution network
temperature-adjusted Ocean & Air, Shipa Freight, with growing
systems is recommended 2021) focus on
retail and
Favorable geographic conditions for Vietnamese consumer
bird’s nests products to be exported to and goods
(PWC,
distributed inside of China
2018)

7
MICRO ANALYSIS

Macro
Macro analysis
analysis

INDUSTRY OVERVIEW
China is the largest consumer of bird’s nests in the world (Vietnam Farms and Agricultural
Enterprises Association)
In 2020, current value of herbal/traditional products shows an increase by 0.4 percent to
achieve CNY96.9 billion. (Euromonitor, 2020)
Since 2015, sale of herbal/traditional products (including bird’s nest) has witnessed a growth
of CNY 25,499M. (Euromonitor, 2020)
With a compound annual growth rate of 141.4 percent, China's imports of bird's nest climbed
from 3.2 tons in 2014 to 105.2 tons in 2018. The volume of China's traceable bird's nest
imports is predicted to increase to 862.5 tons in 2024. (China Food Press)

There are huge potential profits for Herbal/Tradition products market,

because the import is predicted to increase in the next 5 years, together with
the sustainable sales over the last 5 years.

FORECAST OF CHINA'S BIRD'S NEST'S IMPORTS

SOURCE: CHINA FOOD PRESS

8
MICRO ANALYSIS

Industry
Industry Overview
Overview
The Chinese herbal/traditional market The export volume of bird's nest in China
is expected to grow over 2018-2023, owing is far less than the import volume.
to the national government's and relevant China's edible bird's nest imports
local agencies' continuous emphasis on accounted for 72% of Indonesia's
the benefits of these products. imports in 2019, and Malaysia edible
(Euromonitor, 2019) bird's nest imports accounted for 27.9%. ;
Thailand's edible bird's nest imports
The output of bird's nest in China is very accounted for 0.1%. (China Customs)
small, less than one ten thousandth of
the world's bird's nest production. At present, there are no leading
Domestic production of bird's nest is companies in the market that can affect
expected to not change significantly in the entire industry. According to industry
the next few years. In 2014, domestic bird’s estimates, the largest bird's nest company
nest production was 42.31 tons, and in in the market currently has annual sales of
2018 it was 55.01 tons, an increase of only about 1 billion yuan. (Wojian, 2020)
7.54% year-on-year. (Chen Yin, 2021)
The domestic supply of bird’s nest cannot
In 2019, the current 90s and 95s have meet the growing domestic demand. There
become a new force in bird’s nest are still chances for foreign bird’s nest
consumption. As the bird's nest market brands to enter.
will continue to maintain rapid growth,
China's bird's nest consumer market is
expected to reach more than 1,200 tons in
2025. (China Bird’s Nest Association)
MICRO ANALYSIS

Porter's
Porter's
Five
Five Forces
Forces
RIVALRY AMONG EXISTING COMPETITORS

Slogan: “A bowl of good bird’s nest, share it with the one you love”

Brand-run Livestreams are a key way to leverage this sales

channel while keeping costs low. It is also a great way to
develop a direct relationship with customer base. However, it
can get boring.

Customize different product sets for consumers during

livestream

Target customer: Most of its customers are females with

high educational background, young mothers, fashionable
women and confident women.

Livestream at factories: Yanzhiwu’s sales associates took

viewers to the brand’s factories to show them the
manufacturing process. This also helps educate consumers
about the product and help establish trust in the quality of the
product
·

The first domestic and largest legal importer of bird's nest in

China

The core business of Zhengdian Group is divided into 6 items:

bird's nest breeding, bird's nest processing plant, biochemical
laboratory, bird's nest storage vault, bird's nest distribution, and
bird's nest export

Zhengdian Bird's Nest has established long-term and stable

cooperative relations with major bird's nest distributors and well-
known pharmaceutical and health supplement chain companies

They are the initiators in the new category of the “fresh-bubble” era
of bird’s nest 4.0, with can be cooked by just adding boiling
water and simmering for more than 10 minutes to eat. (2019)
·
YenViet can learn the marketing method of Yan Palance because it is feasible, inexpensive
and unnecessary money-burning spreads activities. Getting on well with livestreams, the
fastest and the most widely used form of interacting with potential customers.

10
MICRO ANALYSIS

Vision Tongrentang Sinopharm has organized the "College

“taking modern Chinese medicine as the core, Care Free Clinic", serving nearly. 200 people and
developing the life and health industry, and distributing nearly 700 pieces of Chinese herbal
becoming an internationally renowned modern medicine.
Chinese medicine group”
New marketing ideas enabling new
"Sending health" service growth.
The marketing brand party branch of Tongrentang Through new media platforms such as Himalayas,
Technology Marketing Branch joined hands with the Ping An Good Doctor, and Ali Health, Tongrentang
third party branch of Tongrentang Commercial Co., Ltd. carried out the "Traditional Chinese
Beijing Chain to enter the activity room of the Party Medicine around you" IP series promotion activities,
branch of Yanshang Village, Dashiwo Town, and carried out wide-spread Chinese medicine
Fangshan District, Beijing, to measure blood publicity and popular science in the form of creative
pressure and blood sugar for villagers free of videos, game H5s, comic strips, etc.
charge and conduct health consultations.
For example, experts and well-known health
The Beijing Medical Group of Tongrentang Science bloggers were invited to cooperate with nearly 2
and Technology Medical Division and Huangcun million views and a cumulative exposure of 6.5
Adult School in Daxing District launched a health million. With the help of festival solar terms
lecture with the theme of "Reasonable Diet, activities and health-preserving topics, more young
Nutrition for All" to popularize health knowledge people are attracted to acquire knowledge of TCM
and health care knowledge for the people in the through new media channels and arouse young
community. people's attention to time-honored brands

BUYER'S POWER
Consumers have become more aware of
the health benefits of bird's nest. The
purpose of consumption has changed
from mere high-end gifts on festivals to
daily health and nourishing products.
(Wojian, 2020) -> Consumers are more
well-educated about healthy foods.

23 percent of Chinese consumers would

change their minds to choose stores that
offered better deals. (Mersolluo, 2020)

The fierce price war has led to a decline in

the quality of bird's nests, and even
counterfeit products. The industry's trust
crisis still exists. (Wojian, 2020)

Brand awareness exists but

consumers care more about the
quality of bird’s nest.
MICRO ANALYSIS

BARRIERS TO ENTRY - POLICY

Registering your company with the AQSIQ: This

will Help us track the shipment and also be easier
for the importers

AQSIQ’s certificate: AQSIQ certificate is An

extremely important paper that Can help the food
exporters avoid the risk with the China’s Customs (
AQSIQ, 2021).

Labelling your products: (1) Company name

(both English and Chinese), (2) Address, (3)
Operational license number , (4) Production
date labeling on each package.

The China Labelling regulations require: (1)

precise description of the product; (2)
ingredients used in preparation for the final
product; (3) a detailed list on avoiding health
hazards when consuming the product; (4)
Manufacturing date; (5) Expiration Date (Verot,
O. 2021).

Export license: AQSIQ certificate is an extremely

important document that Can prevent the risk with
the China's Customs for food exporters.

Licenses for entering e-commerce: ICP Beian (ICP 备

案 ) – This is The standard ICP license needed to host a
website in China. ICP Commercial – gives the holder
the legal ability to accept payments online, (Alessio
Casablanca, 2021)

The cost for the application of the AQSIQ certificate up to $3,800

The price to build a new site in China: $19,456
The price to apply for a business license in China (Joint Venture): $19,950
ICP application: $64,618 (Fung, I. (2020, March 6)

The procedures to entry are feasible and the costs are relatively reasonable;
Yen Viet is capable of passing these barriers to entry.

12
 MICRO ANALYSIS

Porter
Porter
BARRIERS TO ENTRY - ACCESS TO DISTRIBUTION CHANNEL

ON-TRADE OFF-TRADE
On-site display and High-end shopping malls and chain

recommendation, hotels, pharmacies have always been the largest

guesthouses and bird’s traditional channel for bird's nest sales.

nest restaurants have (YanWo, 2020)

always been a market

where a large number of This channel is challenging for foreign bird’s

bird's nests are nest companies to enter because there are

consumed. (YanWo, 2020) strict regulations and certificates required.

Bird's nest consumers

account for more than half
of the total in tier 2,3,
demonstrating its strong
spending power. (Wojian,
2020)

Bird’s nest brands can focus on

distributing in restaurants
and hotels in tier 2,3 cities
Well-known bird’s nest companies
tend to set up their independent
stores (specialized/experience
stores), which integrate gift sales
and gourmet consumption and
act as the companies' image
display platform.

Example: Yan's Palace’s stores provide professional bird's nest stewing

activities, coffee shops and tea houses, to give customers professional
advice and pleasant shopping experience. This model is difficult for foreign
brands to apply since it requires a lot of capital investments.

To start with off-trade distribution channel, new brands need more time
to enhance their brand reputation and relationships with distributors

13
MICRO ANALYSIS

BARRIERS TO ENTRY

BRAND AWARENESS THREATS OF SUBSTITUTION

No master plan has been laid out for Due to COVID-19, TCM ingredients saw
the industry and local companies demand boom in 2020 include ginseng,
have not paid attention to branding Chinese caterpillar fungus, and wolfberry,
(Khanh, P. 2021) amongst others.

Vietnamese bird's nest brands has Infinitus (China) Co Ltd remains the largest
not made any significant impact on player in herbal/traditional products, well-
the Chinese market known for its TCM dietary supplements and
tonics.
New brands need to rebuild their
brand awareness from the start as
These traditional, herbal medicines are more
Chinese citizens are using their own
cost-effective with low side-effects if
social media
people want to achieve good health and

Brands should build their own website maintain their youth in the long run.
in Mandarin & adapt to Chinese norms

Brands that are on e-commerce

platforms are submitted to strict
rules when it comes to quality
and safety issues.

Celebrities can drive traffic but

not necessarily drive sales ->
use celebrities for brand live-
stream must be careful The price of bird nest products shouldn’t

vary much from other traditional/herbal

Big amount of big competitors products

(QIANG100.COM, 2021)

14
MICRO ANALYSIS

E-COMMERCE Porter
Porter
China's e-commerce companies are forecasted
to account for 52.1 percent of retail sales in
2021, up from 44.8 per cent the previous year.
This means that most of China's retail sales
will be traded online. (Xuajingyan, 2021)

Bird’s nest sales witnessed improvement

during e-commerce shopping festivals
such as: JD’s 6.18 anniversary, Single’s Day,
Chinese and Western Valentine’s Day,
Double Ninth Festival. (GMA, 2020)

The current e-commerce sales of bird's nest

are mainly concentrated on the two
platforms, which are Tmall and JD. (China
Food Press, 2020)

Alipay and WeChat Pay are the most

popular digital payment platforms among
Chinese Mainland respondents, with around
9 in 10 Chinese saying they used them in the
last 12 months. (Statista Global Consumer
Survey)

The popularity of digital payment helps to

increase E-commerce sales. It is critical for the
company to apply Alipay and Wechat Pay for
main payment method. Tmall and JD.com are
the best E-commerce platform for us to
distribute and promote our products.

15
 MICRO ANALYSIS

u m
mer
er B
Beh
eha
avvi
onns
s u iou
our
C
C o r
Economic & Social Factors
Sales Performance of Herbal/ Traditional products
ECONOMIC
% Y-O-Y Retail Value RSP Growth 2006-2015 The effect of COVID-19 bolsters the
0.4% consumption volume of healthy products.
Sales performance is forecasted to be
between 5%-10% from 2020-2025
20%
(Euromonitor, 2020)

There is an increase in the middle income

& near high-income class (McKinsey &
Company, 2020). They are more passionate
about purchasing organic and vegetarian
food as part of their daily healthcare
regimen.

Chinese consumers are willing to pay

premium prices for premium quality.
0% They determine a price range first, then
2006 2010 2015
evaluate brands within that range and select
the most suitable.

CULTURE
Bird’s nests are a part of Chinese
culture dating back centuries. Chinese
people hold high regard for it and
consider it traditional, but also
precious and luxurious. (Hobbs, Joseph
J.,2004)

Bird nest is a mature market in China,

people are awarded of its applications
and usage. Consumer are not extremely
price-sensitive, but they will pay for the
best offer in their price range.

16
MICRO ANALYSIS

u m
mer
er B
Beh
eha
avvi
onns
s u iou
our
C
C o r
PSYCHOLOGICAL
1. Motivation
Young consumer wants to seek a non-toxic way to better their health in response to
growing concerns about the artificial chemical in food and supplement
Old people were significantly attracted by the benefits of reducing the risk of
cardiovascular disease and osteoporosis.
Females were significantly attracted by the benefits of improving facial skin health and
reducing body fat.

2. Perception
Traditional products like birds' nests are healthy, gentle, and pure. However, the
perceptions of quality and safety extend beyond the origin of food, including packaging
and design
Chinese are quality conscious, regardless of imported or domestic brands

3. Spending habits
Consumer journey: Check Baidu (China’s Google) for information before purchasing, read
reviews on Zhihu, and buy products on E-commerce or at stores.
Most of the time, they will do research online with the brand's Chinese name instead of
the original brand name.
Consumers have difficulty in identifying organic foods certificates and labels, nutritional
information and certificate information need to be presented both visually and verbally.

In general, inner beauty and health are main motivation for consuming bird nests.
Herbal products with sufficient information in Chinese and premium design will be
preferred, regardless of origins.

17
 MICRO ANALYSIS

u m
mer
er B
Beh
eha
avvi
onns
s u iou
our
C
C o r DEMOGRAPHIC
1. Age
Consumers between 16-35 accounted for more than 60% of bird nests' purchases on
JD.com

Aging population with

health problems and
fast-paced modern
lifestyles of young
people are factors that
lead to higher demands
for healthy/herbal
products among both the
old and young
populations
(Euromonitor, 2020)

2. Gender
Growing number of
pregnant women and
young girls eating bird’s
nests for their nourishing
properties for both
moms and babies,
despite controversies
about its actual efficacy
(Ma Zengjun, 2021)

3. Lifestyle
Consumers become
more digitally engaged
during COVID-19 in
searching and buying
herbal products online
(Euromonitor 2020)
88% of Chinese consumers in 1st and 2nd tier cities are against food additives.
They are extremely attentive to their body weight, signifying good health

To sum up, health-conscious women, the elders and millennials are

promising consumers for the bird nests market.
18
MICRO ANALYSIS

ge
et
t a
au
ud
di
ie
en
ar
rg nc
ce
e
T
Ta

The Herbal Fanatic

High interest and knowledge about herbal products and how to process them
Aware of the importance of nurturing health and beauty from the inside.
Better educated and digitally savvy, ready to try new brand and products
Ready to spend time/money to maintain their health in a long-run

YenViet should focus on deliver a good brand image and raise brand
awareness on social media/E-commerce, then partner with local
distributors/retailers to be directly visible to customers.

19
COMPANY ANALYSIS

Purenest
Purenest

20
COMPANY ANALYSIS

What
What they
they do
do in
in
Vietnam
Vietnam
Differentiation Strategy/ Focus Strategy
Advantage: Cost/Uniqueness
Wide selection of EBN (premium/high price products)
Qualified for ISO, HACCP standards (renewed every year)
Strong financial background, production capability, wide distribution network
Exclusive quality products as the result of strong investment in biotech and nutrition research
(accepted in Japan - a tough market with high standard)
Scope: Narrow/Broad
YenViet has many product lines with bird nest
ingredients, instant porridge and bird nests
drinks are more popular due to the affordable
prices for Vietnamese.

Marketing strategy in Vietnam

Brand image: reliable, friendly with innovated
products
Color palette: red, gold, light blue
Main activities on social media: minigame,
livestreams with discount offered, collaboration
with KOLs: Hannah Olala, people artist Vân
Dung, actress Ốc Thanh Vân, MC Ngô Quỳnh
Như, MC Nguyen Dan Le, MC Diệp Chi, etc.
Focused tactics: promotion, PR articles, CSR
program, livestream

With long experienced operated in EBN industry in Vietnam, YenViet is focusing on maintain its
reputation, as well as encourage people to consume EBN more by offering discount and good
customer service. Entering China, YenViet will need to adapt a more elegant brand image
which exudes the sense of organic, herbal products with high quality, while maintain some
of their current tactics suitable for China market: livestream, collaboration with KOLs.

21
COMPANY ANALYSIS

e C
C h
h a
a i
i n
n
t e r V
V a
a l
l u
u e
Poorr t e
P r

FIRM INFRASTRUCTURE
• Headquarter in Phan Rang City - a major edible bird nests production site in Vietnam and
Representative Office in HCMC
• Wide distribution system with products being available in more than 80 branches (3 in Ha
Noi, 16 in HCMC) covering the whole country and a large network of retailers, presented on 3
major e-commerce sites in Vietnam: Shopee. Tiki, Lazada
• The largest bird nest conservation center in Southeast Asia in Phan Rang with more than
100,000 swiftlets nesting and living

HUMAN RESOURCE MANAGAMENT

• VinaCapital Vietnam Opportunity Fund (VOF), the leading investment fund in Vietnam,
reportedly controlling 100% Yen Viet to strengthen distribution channels, increase production
capacity, develop products as well as improve corporate governance
• Managing Director: Ms. Dang Pham Minh Loan - Vice CEO of VinaCapital
• Company size: 151 employees
• Registered capital: 125 billion VND

TECHNOLOGY
• The first company to apply birdhouse model in Vietnam. Large scale processing factories
with modern technology (qualified for ISO 22000:2008 & HACCP) to provide bird's nest
products at high quality: refined nests & instant porridge
• Large investment in R&D: scientific production process - YV-PureNest Standard from
strategic cooperation with Vietnam national biotech & nutrition institutions

PROCUREMENT
• Complete control over the developing products, manufacturing and packaging process
=> Quality assurance
• High production capacity to fulfill the large distribution network

22
 COMPANY ANALYSIS

P
Poo r
r t
t e
e r
r V
V a
a l
l u
u e
e C
C h
h a
a i
i n
n
INBOUND LOGISTICS MARKETING & SALES
Bird nests are sourced from Phan Rang. Frequent promotion programs and
The harvesting, categorizing and seasonal content with high user
production process occurs in Phan Rang, interactions on social media
then shipped to retailers all over the Cooperating with famous KOLs through
country cooking shows, live streams
YenViet cooperates with several CSR programs supporting the poor and
scientific institution to develop and hospitals to gain reliability
upgrade their products for further quality. 3 main revenue channels: e-commerce,
wholesales and branches, exporting.
OPERATION
Partial autonomy and competitive industry SERVICE
Pricing of raw bird nests are based on Exchange/Return/Refund for overdate &
supply and demand faulty products within 7 days of purchase
Use of Sapo omnichannel retail and 200% compensation over fraudulence
management system: integrated inventory Usage instruction: cooking guide,
management, POS, website, social media, healthcare guides posted on fanpages, no
e-commerce platforms with real-time personalized-marketing
order tracking Good customer reviews: fast delivery,
good online support, information
OUTBOUND LOGISTICS privacy policy
Website: national delivery with COD/paid
options through delivery partners: Viettel
Post, GHN, GHTK,...
E-commerce: through specific platform
delivery partners
Retailers/Branches: on-site direct purchase

23
COMPANY ANALYSIS

P
Prrood
duucctt C
Caatteeg
goor
riieess
YenViet bird nest products' portfolio: Edible Preprocessed EBN: As a kind of pure bird's nest, the
Bird Nest, instant porridge, bird nests drink, original nest has been treated to clean feathers (80-
and instant bird nest. 90%), impurities and dirt, and small down feathers.
Customers only need to pick up the hairs before
As the demand for herbal, nutritious, no- processing.
additives products is increased, edible bird
nest seems to be a promising category for Refined EBN: It is a type of Bird's Nest that has been
YenViet to focus on. cleaned (99%) of feathers, dirt, and impurities.
Although refined EBN has been processed, it still
3 types of edible bird nests (EBN): unprocessed ensures the nutrient content in each bird's nest.
EBN, preprocessed EBN and refined EBN.
As the demand for natural/herbal health products is
Unprocessed EBN: Nest when picked down increasing, and arising concerns about artificial
only clean impurities, dirt, less affected from chemicals in food, we believe that refined EBN,
the stage of harvesting to the processing of which is produced under the YV-Purenest
finished products, so the nutrient content in standard established by YenViet and some
each Nest is kept completely, 100% pure. biotech & nutrition institution, will be the
suitable product line for YenViet to enter China.

24
COMPANY ANALYSIS

P
Prrood
duuccttss lliin
neess

Bạch Thanh Yến

(Tổ Yến Tinh Chế Thượng Hạng) 5.500.000₫
100gr

Bạch Minh Yến

(Tổ Yến Sơ Chế Thượng Hạng) 6.550.000₫
100gr

Bạch Nguyên Yến 4.900.000₫

(Tổ Yến Thô Thượng Hạng)
100gr

Thanh Yến Phương Nam

8.000.000₫
( Tổ Yến Tinh Chế Thượng Hạng)
100gr

Minh Yến Phương Nam

(Tổ Yến Sơ Chế Thượng Hạng) 8.510.000₫
100gr

We choose Bach Thanh Yen (To Yen Tinh Che Thuong Hang) as the product to enter China
market. 3 options are available: 30g, 50g and 100g. The chosen reasons are stated below.

AFFORDABLE PRICE HIGH NUTRITION FAST COOKING

Compared to domestic bird High protein, no 25-30 minutes to cook,
nests or imported products additives, recommended customers can adjust the
from other countries for diet customers flavor by themselves.
25
MODE OF ENTRY

O
Oppp
poor
rttu
unniittiieess

&
& C
Chha
alllleen
nggeess
OPPORTUNITIES CHALLENGES
Rising demand in herbal China government has only be
products with EBN being a part more opened to Vietnam bird
of China culture, fast-developed nests business since the
E-commerce and logistics beginning of this year -> Few
network, huge market share to initiators to follow
capture
Competitive market with strong
Customers are quality local and international brands
conscious, regardless of origins,
ready to pay a premium price Complex legal requirements

Short distance between Vietnam Restriction of Facebook,

and China -> low risk in YouTube, Google, brand have to
managing quality, low shipping adapt to unfamiliar platforms
cost like JD, Baidu, Weibo

China and Vietnam share many Local brands are biased by

similarities in culture Government and distributors

YenViet need to adapt China local marketing trends (livestream,

personalized marketing) to build a strong reliability image,
enjoyable experience on social media and e-commerce, and offer
good loyalty program to gain a certain share of the market first.

26
MODE OF ENTRY

FSA
FIRM SPECIFIC ADVANTAGE IS IT TRANSFERABLE?

YV-PureNest Standard in Transferable as all EBN products from

production process YenViet are qualified the standard
Good quality and large Not transferable as the quality of
volume of ingredients bird nests in 2 countries is different
KNOWLEDGE-
Exclusive scientific production Not transferable as this is
BASED process competitive advantage of YenViet
Experience in entering Transferable,
foreign markets legal process will be much faster.

Transferable as VinaCapital’s key

Support from VinaCapital personnels have experience in other markets
as well

Reliable brand image Not transferable as Chinese are not familiar

with YenViet
MARKETING-
Widedistribution network Not transferable as Vietnam retailers can
BASED with Vietnam retailers hardly operate in China
Experience in Vietnam Transferable as Chinese and Vietnamese
bird nests market share some culture similarities

27
MODE OF ENTRY

C S
CSA
BRAND IMAGE
A EXPERIENCES AND SKILLS
Yen Viet is the leading company in Vietnam’s swiftlet industry has
the market of high-end bird's nest, existed for a long time, appearing
products from bird's nest and natural since the time of kings. The ancestors
nutritional products with more than of the Vietnam bird’s nest was named
80 stores covering the whole country
in 1328 is Admiral of the Tran
and a nationwide distribution
Dynasty Navy. Recently, Vietnam
system and are also distributed on 3
began to participate heavily in this
major e-commerce sites of Vietnam,
it owns Mall page. market in 2008

The quality of Vietnam's bird's nest Having more plans to promote the
is highly appreciated, the output of development of this industry. In term
Vietnam's bird's nest is about 2-3% of 2021-2025, linking provincial
world production. branches in to strengthen the
technique of bird's nest as well as
follow the right route to export
CLIMATE
Viet Nam has good natural habitats oats for Vietnamese bird nest
for the swiftlets to live and build owners in the upcoming 2021.
their nests.

Swiftlet farming is challenged by RESOURCES

climate change. In recent years, when Vietnam's bird's nest industry enter a
tourism has developed, coastal resorts new phase both in terms of bird's
have sprung up, it is the time when nest care techniques with modern
the natural habitat of the swiftlets, technology.
the nutritional source are gradually
lost. Vietnam's companies researching
application technology to support
swiftlet farming, applying Internet of
Things technology in bird house
equipment management, equipment
technology, and solutions for the
sustainable development for
swiftlet farming. (Pham Duy Khiem,
Chairman of Phu Yen Salanganes Nest
Association, 2020)

28
 MODE OF ENTRY

C S
CSA A
COUNTRY SPECIFIC ADVANTAGE HOW IT IS TRANSFERABLE?
Viet Nam has huge number of It is not transferable due to over demand of the Salanganes
Salanganes Nest farms
Nest products in China.

Viet Nam has good natural habitats for It is be transferable as it is a proof that the Viet Nam nests are
the swiftlets to live and build their nests natural and high quality

Researching application technology to It is be transferable as when equipment technology being

support swiftlet farming, applying used, solutions for the sustainable development of swiftlet
Internet of Things technology in bird
house equipment management. farming.

It is be transferable if the government has policies to support

A good nature for nests to live such as the promotion of nature swiftlet farming, stop planning to
rocky islands or cliffs with caves. exploit the sea for tourism, otherwise it will lose the natural
habitat for swiftlets and there will be only house farming
nests.

Having more plans to promote the It is transferable as having clearer step for standardizing the
development of birdnest farming processes, product’s quality and anti-counterfeiting
industry
MODE OF ENTRY

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ig
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igi
i n
O
O
O

According to the Nation Brands 2020, the annual report on the most
valuable and strongest nation bands, Viet Nam has recorded low Covid-
19 cases and has emerged as one of the top locations within the
Southeast Asian region for manufacturing.

According to Brand Finance, in the ranking of the 100 most valuable

national brands in the world in 2019, Vietnam national brands are
ranked 42nd. Vietnam National Brand has been continuously
improved, up 8 levels and is in a strong brand group thanks to the
Government's efforts on reforming the business investment
environment, improving high export and import performance, product
and business brand support and positive forecasts for GDP growth.

Vietnam's bird's nest industry has a great advantage compared to

other countries in the region with swiftlet farming such as Indonesia,
Malaysia, Thailand, Philippines, Cambodia... The volume of Vietnam's
bird's nest is being ranked high in the region. Because of many
factors, such as the swiftlet in Vietnam is also different from the
swiftlet in other countries, thus producing the excellent quality and
appearance that the world prefers. Therefore, when competing in
quality, Vietnam will be at the top in the future. (Pham Duy Khiem,
Chairman of Phu Yen Salanganes Nest Association)

30
MODE OF ENTRY

e off e
ennt
trry
y
od
Mod
M e o
Criteria for choosing mode of entry
Products must be available on E-commerce and on-trade channels
Must have control over brand image and development
Maintain FSAs
Avoid restrictive regulations toward foreign firms
Allow for effective market penetration
Products must be produced in Vietnam
Limit possible risks

Criteria to choose selling market

Tier 2 and 3: less competitors, potential market for middle price
products
People's demographic: educated, tech-savvy, open to new brands
Near the border line with Vietnam for lower shipping cost

Selection: Equity Joint Venture

Partnering with another company to create a venture business
Someone with good distribution network in tier 2 and tier 3
regions, expertise in marketing and e-commerce and good
relationship with suppliers of on-trade firms
Can distribute exported products from Vietnam
Can maintain FSAs, gain local insights from partner's experience
YenViet has strong financial capabilities

Potential partner: Herbal products distributor in East & South

East China

30
 fereen
nce
ces
s
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R
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you
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