If you’ve ever been to Vietnam, you may have sampled a Zero Degrees Lemon Green Tea, a Dr Thanh Herbal Tea or Number 1 Energy Drink.
These are just some of the products made by Tan Hiep Phat (THP), the business my family started in 1994. As the story goes, my parents started up the business from the scraps of a broken-up state-owned beer and beverage company.
Since then, it has grown into a billion dollar business, employing over 5000 people across four factories. We produce 1.5 billion bottles of herbal tea, green tea, water, soya milk and energy drinks annually, and export to 16 countries around the world, including Australia and China.
So how has our family taken its local success and transferred it to the global stage? A number of factors have contributed to our consistent year-on-year growth and expansion plans. Here are some of the main ones:
A healthy alternative
THP is clear about its mission to provide the world with healthy alternatives to sugar-heavy drinks. Dr Thanh Herbal Tea, for instance, has a range of natural herbs including honeysuckle, chrysanthemum, monk fruit and liquorice.
It has been especially developed to help people cope with the stresses of modern life, cleanse the body and reduce toxins.
With more information available at people’s fingertips and a growing awareness about health and wellbeing, the demand for healthy drinks is growing around the globe. This may explain why we’ve been able to outsell Coca-Cola and Pepsi in non-carbonated alternatives even though we are a much smaller company.
Flexible and lean
As a family-run local business that built itself from the ground up, we’ve learnt how to be smart with our resources, and fast in our execution of strategies. As my father would say, “We have to aim well. One bullet had better hit two targets.” This approach hasn’t shifted much despite our rapid growth over the past two decades. We’re not afraid to launch new products into the market quickly (and pull them if they’re not performing well, which was the case for our Laser Beer line). Being entrepreneurial in our outlook has meant that we are able to make decisions quickly and avoid the time-consuming red tape that larger businesses are challenged by.
Leveraging localization for global success
Being closely connected to the communities where we operate means that we developed products we know our markets will be receptive to.
We invest heavily in research and development to get customer insights. We have the confidence to focus on 100 percent market share in Vietnam, particularly in the regions and rural areas because we know that when these consumers move to the cities, they bring their preferences with them.
We believe that authentic local products are hard to beat, especially if they fulfil the four Ps – product, price, promotion and place.
Our understanding of Vietnamese tastes has proven to be an advantage, and even allowed us to outsmart bigger players.
One such scenario involved the Number 1 Energy Drink, which we developed in direct competition to Red Bull. To cater to the local palette, our version was less strong, less sweet, more tangy and contained healthy ingredients. It also came in a glass bottle that could be recycled, thus making it cheaper for consumers. Today, this drink is one of our leading brands.
Values-based business culture
Values are the cornerstone of our success. One of the values that has greatly contributed to our transition from a local to global company is our adoption of international quality standards and methods to continually streamline the way we do business.
This commitment has had its fair share of challenges. One situation that comes to mind is when we introduced Enterprise Resource Planning (ERP), using software to improve the way we were managing our core business processes.
The swiftness of the implementation and the cultural change it brought also challenged our employees. Having this new level of visibility also exposed a raft of problems, such as internal fraud. Although this was a difficult time for our us, it was worth going through the overhaul for long-term change.