How Lima Bintang Entered Vietnam And Became Exclusive Supplier To Its Biggest Cinema Chain
Emerhub sat down with our client Lima Bintang to discuss the challenges of entering Vietnam.
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No matter where you are in the world, a trip to the cinema is an experience that crosses cultures. And there is one thing that goes hand in hand with the cinema – popcorn.
Lima Bintang was established in Jakarta four years ago to sell its brand of theatre snacks.
In early 2019 the company landed a contract to supply the country’s biggest cinema chain with popcorn and sought out Emerhub to assist them to deliver.
Emerhub facilitated Lima Bintang’s company incorporation in Vietnam, recruited its very first staff member and managed the first shipments into the country.
Adjust the product offering to the local preferences
The company manufactures its caramel and popping oil in Indonesia and imports corn and salt from America.
Lima Bintang’s major client in Vietnam is CGV Cinemas.
Gema Sabdo, the director of Lima Bintang, said consumers across the world had different preferences.
“Americans, for example, prefer the taste of saltier original-flavored popcorn. Indonesia is a medium. In Vietnam we love sweet!”
“We have to adapt and adjust our product to cater to the market.”
Setting up a local team in Vietnam
To establish their entity, Lima Bintang approached Emerhub for its company incorporation in Vietnam and to headhunt and recruit its first employee.
Emerhub then handled the first shipments into the country on behalf of Lima Bintang with its Importer or Record and customs clearance services.
“These early stages have been about proving we can meet the demand and deliver the product on time. The culture in Vietnam is a bit different from Indonesia so we have had to work to understand that.”
Gema said the company had plans to further expand into the north of the country: “Logistics are tough in Vietnam. It is a long way between the two major cities. We plan to have a base in Hanoi in the future to do better.
Tips for expanding your business to Vietnam
Gema offered the following advice for companies looking to break into the Vietnamese market.
Understand your customer’s behavior
Understanding customer behavior compared to Lima Bintang’s home market Indonesia had taken time.
“The taste of the product is important and Vietnam has a very high percentage of young people. Students tend to go to the cinema a lot. So we have lots of young couples buying popcorn! It’s a popular pastime.”
Balance the cost and quality of your product
“We know if we can offer a good price we will have more customers. A lot of companies want to break into the Vietnamese market so the price is very important. The market is huge, and every year a lot of companies come to Vietnam so we have to be competitive.”
Understand the local culture
“Our culture is so different. Westerners need to understand that things don’t always happen on time. If you’re hiring local staff, you need to make sure things run on time.”
Investigate tax, import costs, and other regulations
Gema said it was important to either have the in-house expertise to understand the new market you were entering or utilize the services of an external provider to do so.
“In Indonesia, we only pay 5% tax when we import corn. But if we import corn from America to Vietnam, we have to pay 30%. That is a big difference.”
“Companies that specialize in headhunting can make connections with the talent that foreign companies need. It’s very difficult to come into the market and make those connections easily.”
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