Vietnamese people expect three main things from foreign companies: technology transfer, job creation, and social contribution within Vietnam. In fact, these expectations are common to emerging developing countries, not just Vietnam. Even in South Korea, which has risen to the ranks of developed nations, articles are published every year about global luxury brands being criticized for their stingy contributions compared to their profits in Korea. Therefore, business operators of companies entering emerging developing countries like Vietnam need to pay attention to what they want from foreign companies. In fact, manufacturing companies meet expectations for technology transfer and job creation, but foreign companies in finance, retail, and consumer goods sales are often viewed with suspicion, with the perception that they take money out of Vietnam and send it abroad. Therefore, to establish a stable presence in emerging markets, foreign companies must definitely engage in social contribution activities.
"Moving from CSR to CSV"
Korean companies operating in Vietnam are also engaging in social contribution activities such as scholarships, book donations, and house building. Unfortunately, these activities often lack the company's unique characteristics and are limited to one-time projects. Before the COVID-19 outbreak, Korean companies often engaged in social contribution activities that were easy to promote, such as having headquarters staff wear colorful vests to play with children in orphanages or deliver food to low-income families. Overseas volunteer activities were also often seen as a reward for employees, lacking genuine sincerity.
Jin Dong-hyun, head of the LKIC (LOTTE-KOICA-IUH Service Training Center), a CSR expert and international development cooperation consultant working in Vietnam, said, "Companies are moving from CSR, where social contribution activities are undertaken after profit generation, to CSV (Creating Shared Value), where business activities themselves create social value while simultaneously pursuing economic profit." He advised, "In the current trend, corporate social contribution activities will be more effective and sustainable if they are directly linked to the company's business activities."
In fact, there are many examples of Korean companies operating in Vietnam that have created jobs, transferred Korean technology and experience, and linked their activities to their business.
One. CJ Tteurejjeur + KOICA Pastry and Baking School Support Project (2013-present) CJ Tteurejjeur, Vietnam's leading bakery company, established a pastry and baking school in Tay Nguyen province, an area with relatively low income levels, in partnership with the Korea International Cooperation Agency (KOICA) in 2013. To this day, people in the Nguyen region receive free education, and graduates of the program either work as bakers at Tteurejjeur or start their own bakeries.
Two. Lotte Group + KOICA Vietnam Retail and Service Industry Synergistic Development Capacity Building Project (2017-present) Lotte Group also established the LKIC retail and service training center at Ho Chi Minh City University of Industry in partnership with KOICA in 2017 to provide training in retail and service, concepts unfamiliar in Vietnam. Currently, it has trained over 1200 students. Graduates of the retail and service practical job-seeking program and the bakery & deli practical job-seeking program have undertaken internships at Lotte Hotel, Lotte Department Store, and Lotte Mart, Lotte's retail and service subsidiaries in Vietnam. Excellent graduates are also offered job opportunities.
Three. Amorepacific's "Make Up Your Life" campaign for female cancer patients (2015-present) Amorepacific, a cosmetics company, has been conducting social contribution activities under the campaign name "Make Up Your Life" since 2015, teaching makeup techniques to Vietnamese female cancer patients who experience emotional distress due to hair loss and skin changes during treatment. Amorepacific's cosmetics sales representatives are helping these women regain confidence and quickly return to their daily lives.
Pepsi's "Homecoming for the Lunar New Year" Campaign
The social contribution activities of the Korean companies mentioned above are exemplary because they are directly related to their business areas and do not overtly promote the company. In addition, Pepsi, a global beverage company, is receiving a strong response in Vietnam with emotional stimulation events that are difficult to distinguish between marketing promotions and social contribution activities.
One. Pepsi's Lunar New Year Homecoming Project (2013-present) In Vietnam, where the sentiment of "returning home for the Lunar New Year" is similar to that of Koreans, a national migration occurs during the Lunar New Year. Due to insufficient public transportation, many people travel to their hometowns by motorbike for 2-3 days. Pepsi has been holding a homecoming event for young people who want to go home for the Lunar New Year but cannot afford it since 2013. They charter airplanes for destinations over 1000km away and charter buses for other areas to send people home. While it is close to a marketing event, Vietnamese customers perceive it as a social contribution activity.
Two. Social contribution activities of agricultural chemical companies targeting farmers Loc Troi Group, a Vietnamese local fertilizer and pesticide company, is conducting social contribution activities focusing on farmers, the end consumers. Through a fund established in 2004, they have supported over 7000 cataract surgeries for poor farmers over 12 years. They also consistently educate farmers on safe and environmentally friendly use of fertilizers and pesticides.
Greenfeed Vietnam, Vietnam's second-largest feed company, lends VND 20 million (approximately 1 million USD) for two years at no interest to poor livestock farmers to prevent their children from not attending school due to financial difficulties.