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Putting a value on brand names – a task still unexplored in Vietnam

by VTV410 June 2016 Last updated at 15:45 PM

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Putting a value on brand names – a  task still unexplored in Vietnam
VTV.vn - Building a reputable brand name has always been a focus for enterprises.

Here in Vietnam, while that may have been the case in some instances, much less attention has been given to brand valuation – or the job of estimating the total financial value of a brand.

In 1995, Vietnam’s toothpaste brand was sold to Unilever from the UK and the Netherlands for nearly 5 million USD. Not long after, another toothpaste brand from the country, Dạ Lan, was also handed over to Colgate Palmolive for 3 million USD. These were not small figures for Vietnamese enterprises at the time. Yet, only several years on, the former business owners of the brands once dear and near to the hearts of Vietnamese people discovered their businesses had been sold on the cheap.

"The lesson here is that we need to conduct branding valuation of a business, keeping in mind its potential to develop in the future 10 to 20 years, and not just an in-the-moment valuation." - Nguyen Quoc Viet, Lecturer, Department of Finance & Banking, College of Economics, Vietnam National University.

Lacking an official and accurate system of branding valuation, the Vietnamese market faces acquisitions that are low-end.

"In Vietnam there are no legal systems in place for this so enterprises are still uninterested and have not come to grasp the importance of such valuation and investment in branding. This is a great setback for Vietnamese businesses. " - Lai Tien Manh, Managing Director, Vietnam Mibrand JSC.

Branding valuation requires an assessment of the company’s entire assets, including the brand name. To keep up with global trends, businesses in Vietnam must start by establishing a brand name, and it doesn't end there.

"Issues related to tax as well as transparency in finance and figures also come into play. It isn’t just about the popularity of your brand. The entirety of the company contributes to giving it a better branding valuation." - Nguyen Thach Nguyen, CEO, Bond Creative

"I hope relevant government agencies will soon provide a legal corridor for branding valuation. This will help ensure many benefits for business owners in the long run." - Lai Tien Manh, Managing Director, Vietnam Mibrand JSC.

Experts say that when it comes to Merger & Acquisitions, Vietnamese enterprises need to take into consideration the macro context to branding valuation is not only accurate, but well-informed.