The story of Mr. Luong Van Vinh, owner of the My Hao dishwashing liquid brand, who repeatedly refused to sell himself to a large international cosmetic and chemical corporation, is always told as a testament to the efforts of a Vietnamese brand to escape being acquired after integration.
Meeting Mr. Vinh one morning in late August in Ho Chi Minh City, asking him the truth about the story of being "offered" to buy the company for tens of millions of USD, he smiled simply: "That happened a long time ago, more than 10 years ago. At first, the intermediary said to pay 10 million USD, after a while, they came back to "raise" it to 30 million USD. Maybe they thought I was cheap, but I never really intended to sell the company to set a price, to bargain. Multinational corporations have strong resources, have a global brand that is known by many people, I am nothing... But buying a domestic brand also helps them reduce a competitor, get an existing distribution system, and "be alone in the market" which is also convenient for increasing the selling price. But after selling, the poor and workers will find it difficult to buy cheap detergent packages".
Difficult to enter supermarkets, My Hao products choose traditional channels and convenience stores to distribute goods.
Ngoc Duong
Refusing tens of millions of dollars, a huge sum of money from a few decades ago, the owner of the once-famous dishwashing liquid brand My Hao explained his reasoning: The products are popular and are the daily needs of every family. If My Hao were still on the market, Vietnamese people could buy a bottle of dishwashing liquid for 10,000 - 15,000 VND. If My Hao disappears, there are no more domestic enterprises to compete with, then the price of the same type of product with the same quality can be doubled, even tripled because the choice is greatly reduced.
The seller said that the soft price is the strength of My Hao products.
Ngoc Duong
Not only refusing to sell the company, Mr. Vinh also repeatedly refused to do outsourcing for big brands. He said that selling the company would "kill" a brand quickly. And accepting outsourcing for foreign brands would be a slow death. In reality, if they cannot buy, foreign companies will turn to "asking" to do outsourcing for them. Many companies invest in large production lines, but they do not operate at full capacity. When they hear that outsourcing is paid well, and in a time when workers need jobs and factories need to maintain operations, they will immediately accept the benefits. But that is a scenario. At first, they sign big contracts. Domestic companies get carried away, neglect production and develop their own goods, and devote all their efforts to outsourcing. Then suddenly, they announce that they will terminate the contract and no longer hire. At this point, it is too late to go back to selling the products they produce themselves.
"At that time, the only way left was to sell the factory and disappear. There were some domestic enterprises that fell into the same situation. So one time, a company hired me to process and produce detergent powder. I suggested investing in a separate production line, but they refused. They wanted to do it right away using the production line. Seeing that it was not good, I refused. From then on, I refused all invitations to do processing work, no matter how lucrative the contract was. You never know where to find traps in the market," Mr. Vinh confided.
My Hao products are loved by rural consumers.
Ngoc Duong
Not selling itself, not doing outsourcing, after a while when big names like Unilever and P&G entered the Vietnamese cosmetics market, My Hao's sales dropped by nearly half. Sales from 30 - 35 billion VND, down to 20 billion VND in 2007 - 2008. "Shocked" by the rapid decline, but Mr. Vinh was not discouraged. He worked hard to regain market share. He offered heavy discounts, accepted no profit or very low profit, and sold products on the move to every corner and alley. In particular, My Hao "launched" a marketing team of 500 people to go to regions to promote and sell products.
"In the consumer goods industry, building a distribution system is a vital factor for a business. You cannot let your guard down. I just keep fighting like this to keep my market share first" - he shared. Just like that, My Hao has "stubbornly" lived alongside foreign giants in the industry for many years.
Mr. Vinh admitted that maintaining the business and the company's products, even though the selling price is only 50-60% of the same type of products from foreign corporations, still makes it difficult to penetrate modern retail channels in urban areas. "The policy of calling on Vietnamese people to use Vietnamese products has been maintained for many years, regularly, but if Vietnamese products cannot be brought into the supermarket channel, it will be very difficult for consumers to support them," Mr. Vinh worried.
He analyzed that the retail discount in traditional channels, large distributors are 10 - 12%, in which they bear all costs of warehouse, transportation, delivery, management..., the profit is only about 5 - 6%. Discounts at stores, grocery stores add another 20 - 25%, equivalent to about 35 - 37%. Meanwhile, supermarket systems demand a discount of 35 - 40%, a very large rate, but if they do not spend more on shelves and other promotions, they can only display one product on the counter. And like that, buyers go to the supermarket to look for My Hao dishwashing liquid with "red eyes" but still cannot find it.
Located modestly on supermarket shelves, My Hao products are widespread in suburban markets.
Not only that, if the company wants to run a promotion to reduce prices for consumers, the supermarket will only reduce prices for 1 week and then have to increase prices back to the old price so they can benefit.
"Foreign brands spend tens to hundreds of billions of dong each year on advertising. We spend a maximum of less than 2 billion dong a year, which is only 1% - 2% of theirs, which is already very difficult. Of that small percentage, we only focus on promotions, discounts and gifts for customers. So over time, Vietnamese goods have not yet reached the supermarket door before being 'pushed' to the suburbs and provinces" - Mr. Vinh said, his voice unable to hide his sadness.
To verify what Mr. Vinh said, on August 30 and 31, we surveyed a number of small markets and grocery stores in the Ho Chi Minh City area, from Ba Chieu Market, Hang Xanh to Cay Diep Market, Phan Van Tri Street, No Trang Long, Lac Long Quan... and could not "fortune-tell" a bottle of My Hao laundry detergent or bleach or a bar of Co May soap produced by this company. Some grocery stores on No Trang Long and Lac Long Quan streets said that because few people bought them, they were "lazy" to buy them to sell.
Among the jungle of domestic and foreign dishwashing liquid brands, My Hao modestly displays only one bottle on the shelf of a convenience store.
Ngoc Duong
But "in every difficulty, there is a silver lining", Mr. Luong Van Vinh's My Hao Company is the first enterprise in Vietnam to "go one step ahead" in producing laundry detergent and fabric softener packets for one wash at a price of 1,000 VND. The story started nearly 15 years ago, when he went to Malaysia, the Philippines, Indonesia... and accidentally discovered some places that produced laundry detergent and fabric softener packets for one use, which were quite convenient and very cheap. The products were consumed strongly in popular markets.
At that time, Vietnam only sold small shampoo and conditioner packages, no one made laundry detergent packages, so he boldly invested in a production line. "The company's revenue was maintained thanks to this product line. A working family can spend 10,000 VND to buy a fabric softener pack, which can be used for 10 times. Especially, in these difficult times, a worker living in a rented house only needs to spend 1,000 - 2,000 VND to buy a laundry detergent pack, which can still be used for a neat and clean wash, instead of having to spend more than 100,000 VND at once to buy a large bottle of laundry detergent" - Mr. Vinh excitedly said.
In addition, the company has maintained the policy of low prices and good quality as a guideline in its operations over the years to maintain its market share in the increasingly fierce competition in the domestic cosmetics market. If fabric softeners of famous brands are sold at 440,000 VND/5 liter bottle, equivalent to about 85,000 VND/liter, My Hao concentrated fabric softener is only 120,000 VND/4 liter bottle, equivalent to 30,000 VND/liter. The company's Sunro laundry detergent is also only 16,000 VND/400 gram bag, or a bottle of dishwashing liquid with many scents is also only 16,000 VND/liter...
Mr. Vinh shared: "The same production line, the same raw materials, the same formula... to produce a batch of goods with almost the same quality, only the brand and label on the outside are different. We want to bring cheap, good quality goods so that domestic consumers have more choices. I affirm that cheap prices are real, but not cheap prices with low quality".
Knowing how to make money and make a living by making incense since the age of 10, by the age of 17, Mr. Luong Van Vinh was selling groceries at Binh Tay market (District 6, Ho Chi Minh City). After the country's reunification, business was difficult, so he went to work for a soap factory. That was also the opportunity for him to pursue this career.
"Going to work at the factory, on weekends I bought raw materials, at night I went home to research production, and brought them to the market to sell. I sold everything I made. One night I produced 30 kilos of soap, and in the morning I cycled to deliver it to two markets near my house until it was sold out. Later it increased to 100 kilos, then 200 kilos..." - Mr. Vinh recalled. In 1978, he opened a small facility to produce My Hao soap, followed by a series of other products such as dishwashing liquid, bleach, laundry detergent, fabric softener, hand soap, floor cleaner, etc. Of which, My Hao dishwashing liquid was the main product, accounting for more than 60% of total revenue.
After 45 years of building the brand, Mr. Vinh is proud that he has succeeded in his role and direction of making cheap goods for Vietnamese consumers. In particular, My Hao dishwashing liquid products have become familiar in every family, since the days when Vietnam had not yet lifted the embargo. Not stopping there, the owner of My Hao still dreams of expanding the domestic market as well as the world. "If they can come to us, we can also sell through them" - Mr. Vinh said.
Products are sold in Cambodia
In 2020, during the peak of the Covid-19 pandemic, My Hao caused a stir in public opinion when it was one of the few Vietnamese companies licensed by the US FDA to export hand sanitizer gel to the US. Previously, the company's dishwashing liquid and laundry detergent products were also sold to this market. In addition, My Hao also exported products to about 10 foreign markets, mainly in Asia. Of which, Cambodia is the most successful market.
Mr. Vinh admitted that penetrating any foreign market is a great effort for domestic consumer goods manufacturers. But for this man, the problem is not only selling goods and earning money, but more importantly, spreading the My Hao brand, a Vietnamese brand, beyond the border.
He said that My Hao products are selling very well in Cambodia, with 120 tons shipped each year. If more than 10 years ago, revenue from the Cambodian market was from 10,000 - 20,000 USD, now it is over 100,000 USD and this number is still increasing. However, when he surveyed the market in this country, he could not find his products sold anywhere.
"Maybe they sold wholesale to a certain unit instead of retail. If so, it would be a great loss when the spread of their brand is slow" - Mr. Vinh said.
Therefore, Mr. Vinh's plan in the coming months is to take a trip to Cambodia to find out how his customers are, what their needs are, what other products they need, and through what channels they bring My Hao products to the market. For a long time, the company has been following their orders. "This year's revenue has decreased by 10-20% compared to last year, sales have slowed down, but I also said no to outsourcing even though there are units ordering outsourcing again. My advantage in selling domestically and internationally is good prices. Consumer goods that compete on price in this difficult context is the right direction. I think it's simple: instead of making a profit of 5-7%, now accepting a profit of 5% is good enough. We have to maintain our performance to wait for the dawn."
Thanhnien.vn
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