The beer industry in Vietnam has high entry barriers due to the significant market concentration. Leading companies possess extensive distribution networks and strong brand recognition. This concentrated market leads to intense competition among the major players as they vie for market share. Notably, Sabeco’s market share has declined sharply from 42% in 2018 to nearly 34% in 2023.
Sabeco is primarily owned by two major shareholders: Vietnam Beverage (53.6%) and the State Capital Investment Corporation (36%). Vietnam Beverage is a subsidiary of ThaiBev, Thailand’s largest beer producer, which consequently exerts significant control over Sabeco’s operations. Despite contributing nearly 88% of Sabeco’s revenue and gross profit, the beer segment has seen a notable decline in profit margins due to rising input costs. Additionally, high sales and administrative expenses have further pressured profitability.
Sabeco’s substantial investment in sales and advertising, largely driven by ThaiBev, has not yielded significant competitive advantages. In 2023, these expenses resulted in a 58% drop in operating profit. The company’s declining market share is attributed to the stronger brand recognition and diversified product portfolios of competitors like Heineken and Carlsberg.
Heineken Vietnam has executed numerous high-profile marketing campaigns, including award-winning initiatives and large-scale events, which have consistently positioned its brands as the most prominent on social media between 2020 and 2023. Similarly, Carlsberg has ramped up its marketing investments as part of its SAIL’27 strategy, significantly increasing its market share in Vietnam by 1.8 percentage points to 9.2% in 2023.
Sabeco has also attempted to boost brand visibility through various promotional events and sponsorships, but these efforts have been less impactful than those of its competitors. From 2018 to 2023, the company’s advertising and promotional costs as a percentage of net revenue nearly tripled, yet its market share continued to decline.
Moreover, Sabeco’s product portfolio, dominated by mid-range beers like 333, Saigon Lager, and Saigon Export, limits its appeal to a broader consumer base. While the company has introduced new products, these have largely been repackaged versions of existing offerings, failing to capture changing consumer preferences.
In contrast, Heineken has successfully diversified its product range across various price segments, appealing to a wider audience. The company has introduced premium products such as Heineken Silver, Heineken 0.0, and Tiger Platium, contributing to a rise in premium beer consumption from 29.8% in 2018 to 33.7% in 2023. Carlsberg has similarly expanded its premium offerings with new products like 1664 Blanc and Tuborg Ice.
Sabeco’s strategy of raising prices to offset rising production costs has further eroded its market share between 2021 and 2023. The company’s approach contrasts with its competitors, who have focused on product innovation and brand strengthening to maintain and grow their market presence.
Source: FPTS
Compiled by VietnamCredit
