Vietnam Energy Efficiency Standards
and Labelling Program:
Australian Government Support Project
COMMUNICATIONS RESEARCH SUMMARY
AND RECOMMENDATIONS
September 2012
Prepared by:
Research Summary
Methodology
Research was undertaken in March 2013 through:

A total of eight focus groups with consumers in rural and urban areas of north and
south Vietnam. There were between six and eight attendees in each group.
Attendees had all purchased at least one of an air conditioner, fridge or TV in the
six months prior to the group.

In-depth interviews with five chain retailers.

Visits to chain and independent retailers, conversations with sales assistants.

In-depth interviews with seven manufacturers of appliances and lighting.

Review of promotional materials in store and online.
A list of focus groups and organisational respondents is shown in Appendix 1.
Key research findings
Consumer decision-making

Consumers’ decisions on their choices of appliances take place over a significant period
– typically 3 to 12 months. The model is normally selected some time before the date
of the purchase and the consumer then shops around for the cheapest price.

The decision-making process is faster where it is a replacement for a product that has
broken down. It is slower when the consumer doesn’t know people with the product or
needs to save up for the purchase.

During the decision-making period consumers talk to family and friends, visit stores
and ask advice of sales assistants. Some (mostly urban) consumers use the Internet
for research.

Chain stores are more trusted than independents by most consumers; however, some
rural consumers have a high level of trust in a local independent store.

Both partners in a couple are involved in the decision. Women have considerable
influence over household budgets and are generally more concerned than men about
saving money. Some appliances are seen as male-led choices (air conditioners,
televisions) others are seen as female-led choices (refrigerators, washing machines).

The importance of energy efficiency in the decision-making process depends on the
product; it is a higher priority for air conditioners than other appliances where energy
consumption is seen as small or as varying little between products.

Consumers talk about energy efficiency but they generally mean energy consumption.
When comparing products they use the plate rating1 as an indicator of energy
efficiency.
1
This shows the maximum power used by the appliance

Quality brands are expected to be energy efficient (and durable); as a consequence
consumers are prepared to pay a small premium (about $50 with no difference
between products) as they recognise lifetime costs will be lower. Lower-income
consumers recognise the value of energy efficient products but are less likely to be
able to afford any price premium.

Consumers understand the concept of whole life costs and factor this into their
decisions about whether to buy a more energy efficient product in one of two ways;
they assume a lifetime for the product and then:
o
Think about the comparative cost of products over their lifetime.
o
Think about the time to payback and assess the additional savings from energy
efficiency which they regard as a “bonus”.

Most consumers expected a lifetime of seven to ten years for air conditioners, TVs and
fridges; however, some saw the life as much shorter (2-3 years) as they expected the
product would become out of date or unreliable.

The labels were easily understood by consumers and would influence their decisions.
High star products were seen as being of higher quality but there was not an
immediate understanding that this also reflected lower running costs. There were
concerns about weak enforcement leading to fake labels or fraudulent claims.
Retailers

Sales assistants in chain and independent retailers were asked about labels (where
products in their store were labelled). It is clear that they do not understand the label
and cannot provide accurate advice to consumers at present.

Chain store staff receive formal induction training followed by more ad hoc, on-the-job
training from line managers. Manufacturers provide training to sales staff about new
products/technologies.

Sales staff are expected to help customers calculate running costs of air conditioning
based on energy consumption and have formulas they apply using running hours. For
other products they typically advise customers by comparing plate ratings.

Some chain retailers are aware of the label, some are not, some had engaged with
government (MOIT or DOIT) about the label. There were varying levels of
understanding of the scheme and enthusiasm for it. There was agreement that the
government needs to enforce the scheme if consumers are to have confidence in it.

The retailers that are aware of the label expected that retailers would face penalties for
selling unlabelled products. There was some concern that all manufacturers would not
have labelled all their products by the 1 July and the potential impact on retailers.

Once the scheme is in force retailers expect to receive guidance from MOIT and
manufacturers on the label.

Retailers expect the impact of the labels to differ for different groups of consumers and
products; retailers think:
o
High-income consumers are more likely to buy high star products (which retailers
expect to be more expensive). Lower income consumers might want to but are
expected to buy cheaper products.
o
The label will not influence purchases of products where customers are already
thought to choose energy efficient options (however, apart from air conditioners
there was no consensus on what these products are – some included fridges and
washing machines others did not).
o
The label is expected to be more likely to influence buyers of products where
energy efficiency is not normally an important consideration (all agreed this
included TVs and cookers).

Retailers are happy to co-operate with government on promotion of the scheme and
suggested they would welcome point of sale or in store promotion materials from MOIT.
They would also be happy to receive staff training materials from MOIT. Retailers want to
promote energy efficient products as they see a clear benefit to their customers – however
they also want to provide choice for lower income consumers.

One retailer was aware of the green zones idea and was happy to co-operate with it.
Manufacturers

All manufacturers were aware of the scheme.

They felt that, in the short term, it would have little impact on consumer behaviour without
significant communications support to explain the label to consumers.

All manufacturers interviewed intended to inform their salesforce about the label so they
could explain it to retailers/distributors. Two intended to use it in their marketing material
for consumers.

Manufacturers’ use of energy saving messages varied between products. Based on the
review of promotion material in store and online, energy saving was claimed by:

Eight out of nine air conditioning manufacturers

One out of six refrigerator manufacturers

One out of four rice cooker manufacturers

All seven washing machine manufacturers

Three out of six TV manufacturers
Implications for communications

Process

Communications need to be sustained over the decision making process and not just
at the moment of purchase.


Communications about the label need to appeal to men and women.
Messages:

Most consumers don’t recognise the importance of energy efficiency for many
products (except air conditioning) – communications can be used to address this.

Consumers are willing to calculate whole life costs and factor these into their decisions
– communications should support this activity.

Consumers don’t trust the label at the moment – communications should explain that
it is underpinned by rigorous testing and enforcement.

Channels

Retailers are a key communications channel and chain retailers are willing to cooperate with MOIT:
o
Sales staff need help to provide good advice to customers. There is an
opportunity for MOIT to influence initial induction training and the subsequent onthe-job training.
o
Point of sale material in stores is a good way to reach consumers. However, this
should be widely available and not confined to green zones2 as many consumers
do not see themselves as seeking an energy efficient product (except for air
conditioning).

Manufacturers also provide training direct to store staff; it would be good to influence
this so it does not contradict label training.

Manufacturers make energy efficiency claims for products at the moment – clearly
they think it influences consumers. The label will provide an opportunity for validation
of that message.
2
Separate areas in stores where energy efficient products are displayed
Communications objectives and rationale
The key messages to communicate are:

That the label is government backed, products are independently tested and the
scheme is enforced. (To gain consumer trust and distinguish it from manufacturers’
green claims.)

That the labels allow consumers to compare products’ running costs; more stars
mean less consumption and lower running costs. (This does not seem to be
immediately understood by consumers. The advertising campaign successfully
communicated this message but it was too long ago and recall is low.)

That energy efficiency is relevant for all products covered by the scheme.
(Consumers readily understand the importance of energy efficiency for air
conditioning but feel that efficiency is less important for other products.)

That even if a product is more expensive it may be cheaper to own in the long
term if it costs less to run. (Consumers are comfortable with the concept of whole
life costs and are willing to accept a payback of around five years on appliances
with a ten year life – if they are given the numbers they are happy to do the sums.
Without hard information on consumption, consumers are unwilling to pay a
premium of more than around VND1m for a more efficient product.)
Communications need to influence the whole decision making process. (This can start as
long as a year before purchase and involves internet searches and talking to friends and
family as well as visiting stores. Normally the model is selected some time before the
actual purchase.)
Key communications channels are:

Independent and chain retailers at point of sale. (Consumers tend to visit a
number of retailers as part of the product research and selection process. Urban
consumers visit chain and independent stores, rural consumers rely more on
independents but might visit a chain store in a nearby city.)

Sales assistants. (Consumers ask sales assistants for advice about energy
efficiency; at present they seem to be poorly informed.)

Internet. (Presently used by a minority of urban consumers as part of their
selection process. However, this group buys more appliances than others and it’s
likely that internet use will increase in other demographics.)

It is important that efficient appliances are not segregated in store. (Consumers
want to compare all appliances in the same place.)
Communications need to target women as well as men. (Traditionally appliance decision
makers have been thought of as male; however, women are important decision makers for
some appliances (refrigerators, washing machines, cookers) and important influencers for
TVs. Women are also largely responsible for the household budget and more interested in
savings.) This means keeping it simple, avoiding jargon and technical language and
appealing to the desire to save money.
Recommended actions
TV Commercials:

MOIT intends to continue the TV campaign from 2012. Where consumers recall the
campaign it was successful in explaining the label. However, it is not sufficient on
its own because:
o
Levels of recall were low.
o
It may not reach purchasers of electrical appliances during their decision
making process.

The TV campaign should help to engage retailers and manufacturers to support
communications – they will see it as a valuable commitment from MOIT and a
demonstration that MOIT is serious about raising consumer awareness and
understanding.
Green Zones in stores:

MOIT intends to implement its plan to encourage chain stores to host green zones
to showcase efficient products and to explain the label to consumers. This is
valuable as it raises awareness in the store and secures co-operation from retailers.
However, it is not sufficient as:
o
All store staff need to be able to explain the label to consumers.
o
All consumers, as well as those interested in green products, can benefit
from incorporating the label in their decision making.

Where Green Zones are implemented the energy efficiency expert staffing the zone
could also provide a training session to all the store staff to provide them with an
understanding of the label and how consumers can use it to select the best
products for them.
In addition to the activity that MOIT is already committed to taking we recommend the
following additional communications activities:

Develop a training package for store staff; this should then be delivered through:
o
Manufacturers who train staff in their products.
o
Chain retailers through their normal staff training activities.
MOIT should consult with manufacturers and chain retailers3 on the content and
format of a staff-training package.

Provide information about the label to independent retailers. This could be in the
form of a poster or hand out which would be distributed through DOITs. Suggested
content is in Appendix 3.

Develop recommended point of sale material for retailers; this could be done in
consultation with chain retailers who could then tailor it for their own needs.
Independent retailers could be provided with a generic format.

Consider providing consumers with a leaflet/card which provides them with key
messages and supports them in using the label to evaluate alternative products.
MOIT could distribute it through retailers (who may be prepared to sponsor the
3 A case study description of one retailer’s response to the potential to collaborate with
MOIT is in Appendix 2
cost). Any material should be sufficiently physically durable so that consumers can
retain it through their product selection process which could last up to a year. A
postcard format with messages on one side and a form to record product details
and star ratings on the other would be sufficient.

Improve the information available online for suppliers, retailers and consumers:
o
Information for suppliers should provide a clear guide to compliance and
their obligations together with guidance to using the label in their
promotion and the staff training materials referred to above.
o
Information for retailers should be suitable for independent and chain
retailers. It should clearly explain the scheme and their obligations under it.
It should also contain:
o

The staff training materials referred to above

The point of sale materials referred to above

Guidance to using the label in their own point of sale materials
Information for consumers should be easy to use and non-technical. It
should explain how to use the label in their decisions and reinforce the
messages about the authority of the label. In time it may be worth adding
an online calculator to assist consumers to assess the whole life costs of
products using the label similar to the Australian site
(http://reg.energyrating.gov.au/comparator/product_types/64/search/).
o
Retailers and manufacturers should be encouraged to include a link to the
consumer site on their own websites.
o
Manufacturers should be encouraged to include a link to the retailer
information on their websites – this would be particularly useful for their
independent retailer customers.
Appendix 1 – Respondents
Eight focus groups with seven attendees each were held in:

Hanoi

Quất Lâm (Nam Dinh Province)

Ho Chi Minh City

Tan Hiep (Kien Giang Province)
The retailers interviewed were:

PICO

Tran Anh

Cho Lon

De Nhat Phan Khang

Thien Hoa Electronics Center
The manufacturers interviewed were:

Minh Khoa Joint-stock Co.

VNA WIND Company (state-owned co.)

R.E.E Electric Appliances Joint Stock Co.

TCL (Vietnam) Corporation Limited

LG Electronics

Panasonic Vietnam Co. Ltd.

Rang Dong Lighting Co Ltd
Appendix 2 – Retailer case study
Discussions with one electrical supermarket covered opportunities to co-operate with MOIT
on communications regarding the label. The key elements were:
Training
They would be happy to co-operate on training. MOIT should write to the marketing
department to organise this. Normally there would be an individual in the marketing
department who is responsible for staff training on each product and they would hold ad
hoc training sessions at head office – typically whole company training would be organised
store by store with the staff split into morning and afternoon sessions to ensure that
operations were not affected. Training materials are normally paper based and there are
no online or electronic libraries or material.
Manufacturers also organise staff training. Typically they would invite staff to an event at a
big hotel. Staff would attend this in morning and afternoon shifts as for in house training.
Staff are paid by the retailer for their time and the manufacturer generally provides a meal
and a gift. Most manufacturers organise separate training for each retailer (except LG) but
the retailer would not object to their staff attending an event along with employees of
other retailers. Staff like these events and find them exciting and motivating.
It would also be possible to hold trainings in stores (they generally have a suitable meeting
room). This would need to be planned in advance to ensure staff had time and the meeting
room was available.
Point of sale material
The retailer would be happy to display point of sale material such as leaflets regarding the
label in store; it would need to be approved by the marketing department; however, the
store would not charge for displaying it.
If more intensive in store promotion was required e.g. posters or banners then the store
may be unwilling to co-operate without payment.
This chain is considering organising some in store promotion regarding the label
themselves.
Appendix 3 – suggested content for independent retailer handout
What’s it all about?

The Government of Vietnam has introduced energy labelling for electrical
appliances sold in Vietnam. This will help consumers to choose more efficient
products that are cheaper to run.

The labels come into effect at two stages for different products
1st July 2013
1st January 2014
Compact fluorescent lamps
Televisions
Tubular fluorescent lamps
Refrigerators
Electronic ballasts
Front loading washing machines
Electromagnetic ballasts
Commercial freezers
Air conditioners
Top loading washers for household use
Electric cooker
Electric fan
Three-phase distribution transformers
Electric motors

After these dates it will be illegal to sell products without the label.

Products must be independently tested in approved laboratories to qualify for the
label. Appliances are awarded a rating on a scale of one to five stars. The more
stars, the more efficient the appliance.

The Government will conduct checks on labels and tests on products to ensure
compliance with the scheme. There are fines of up to VND70,000,000 for
manufacturers selling products that don’t comply. Products that don’t comply can
be removed from stores by government inspectors.

Customers can save money on running costs by choosing products with a higher
star rating. Leaflets about the scheme are available for stores to provide to
customers and they can find more information on energylabelling.com.vn.

Energy labelling is common in countries throughout Asia and the rest of the world
with schemes in the USA, China, European Union, Australia, Thailand, Korea and
India.