What is sales promotion? Types of promoted products and promotional products in Vietnam

What is sales promotion? Types of promoted products and promotional products in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is sales promotion?

According to the provisions of Article 88 of the Commercial Law 2005, sales promotion means activities of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers.

Traders conducting sales promotion are those falling into one of the following cases:

+ Traders directly conduct sales promotion for goods and/or services that they trade in;

+ Traders engaged in providing sales promotion services conduct sales promotion for goods and/or services of other traders under an agreement with the latter.

2. What are promoted product and promotional product?

According to Article 5 of Decree 81/2018/ND-CP, promoted product or promotional product must comply with regulations of the Commercial Law and the following regulations:

- Promoted products must not include wines, lottery, cigarettes, breast milk substitutes, medicines for human use including those permitted for circulation as regulated by the Ministry of Health (except for the case in which sales promotion is dedicated to traders involved in drug trading), examination and treatment service of public medical facilities;

Education service provided by public educational facilities or public vocational training facilities, goods and services that have been banned from circulation in Vietnam and other goods and services prohibited from sales promotion as required by laws.

- Promotional products must not include wines, lottery, cigarettes, curative medicines for human use including those permitted for circulation as regulated by the Ministry of Health (except for the case in which sales promotion is dedicated to traders involved in drug trading), goods and services that have been banned from circulation in Vietnam and other goods and services prohibited from sales promotion as required by laws.

- Money can also be used as promotional merchandise, except for sales promotion conducted in the forms prescribed in Article 8, 10 and 11 of this Decree.

3. Maximum discount rate for the promoted product in Vietnam

Pursuant to Article 7 of Decree 81/2018/ND-CP, the maximum discount rate for the promoted product in Vietnam is specified as follows:

- The maximum discount must not exceed 50% of the prices of such promoted product before the sales promotion.

- For time-limited promotion prescribed in Clause 5 in Article 6 of Decree 81/2018/ND-CP, 100% discount shall be offered. 100% discount may be also applied to sales promotion activities included in programs or activities of sales promotion decided by the Prime Minister.

- Maximum discount rate must not be applied to sales promotion of:

+ Goods or services by price stabilization programs of the State;

+ Fresh foods;

+ Goods or service of the businesses going bankrupt, dissolving, changing their location or business sector or trade

4. Types of sales promotion in Vietnam

Section 2 of Decree 81/2018/ND-CP stipulates the types of sales promotion from Article 8 to Article 15 including:

- Provision of sample goods or services free of charge

- Gifting of goods or services

- Sale of goods or provision of services at discounted prices during the announced period of sales promotion

- Sale of goods or provision of services together with coupons

- Sale of goods or provision of services together with promotional contest entry form for selecting the prize winner according to rules and prizes already announced

- Sale of goods or provision of services together with participation by customers in promotional games of chance in connection with the purchase of goods or service and winning of prizes due to chance of participants according to rules and prizes already announced ( hereinafter referred to as promotional games of chance)

-  Organization of frequent customer programs as the basis for awarding customers according to the quantity or value of goods or services purchased in the forms of customer cards or coupons acknowledging the goods or service purchase

- Goods or service sales promotion with the use of the Internet, electronic media or information technologies

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