This week I will share with you a seemingly impossible feat which has, in fact manifest into reality.  It’s a story of a product that multi-nationals have tried and failed, but with the right understanding of its market, it has become a successful national brand enjoyed by 93 millions people in Vietnam. It’s one of the many stories over the year that has helped my family-owned beverage group, Tân Hiệp Phát (THP) stand out.

Zero Degree Green Tea (Trà Xanh Không Độ) changed the tea-drinking habits of the Vietnamese people when it was launched in 2006, creating new demand. When THP started developing a bottled cold tea, many industry observers thought the company was onto a catastrophic loss. PepsiCo and Lipton had already collaborated on bottled green tea products in 2000 and again in 2002. But neither had worked and in 2005, they withdrew from the market.

At the time it was assumed that consumers were simply not willing to pay for something they were accustomed to getting for free from any street stall (quán cóc) or high-class restaurant across the country.

Understanding What Your Market Cares About

In Vietnam, THP had a head start because tea is an essential part of the country’s national identity. Some of the tea bushes along the Chinese border are more than one thousand years old, and Vietnamese culture is (so-to-speak) steeped in it. PepsiCo and Lipton failed because they did not show the Vietnamese people why it was more beneficial to drink bottled tea instead. They just presented it as a new form of tea.

We have a saying in our country, “Đáng đồng tiền, bát gạo.” In English, this literally translates as, “It’s worth spending money and trading rice.” What it means is you may have to spend more money to get good value, or get your money’s worth. The value Zero Degree Green Tea offered consumers was stress reduction and convenience.

THP understood its market and why it would want this product, whereas its competitors hadn’t.  THP knew that it would have success with its tea offering by understanding the following:

  • Everyone loves drinking tea, but as Vietnam gets richer and more urbanized, people have less time and inclination to make it themselves.
  • Consumers began to move away from fizzy and sugar-laden carbonated drinks in favor of something offering greater health benefits. Tea is well known for its antioxidant properties.
  • Tea is a very social, communal drink in Vietnam. In fact, the expression “Trà chanh” has a double meaning. Its literal translation is “tea with fresh lemon,” but it also now means to “hang out.”

When Zero Degree Green Tea was launched, its success was immediate, and many competitors jumped into the market immediately after. THP exceeded its twelve-month sales target within two months. In 2006, it started off selling 10,000 cases per day; today it sells over 100,000. Shortly after, PepsiCo was back with Lipton Pure, and later Tea+, while the Philippines Universal Robina Corp launched C2 and Coca-Cola introduced Tea Leaf. But THP had the first-mover advantage. Today, Zero Degree Green Tea still enjoys the largest market share in the green tea market category.

When you understand your market, you provide tailored products that it wants and/or needs – the result is growth for your company.  There are many more of these unprecedented success stories like these in my new book Competing With Giants. Get your copy here to learn more about building a successful business that can take on the existing industry giants.