Laos is one of the poorest countries in Asia with an average income hovering just above USD3 per day. Nearly two-thirds of the population live in rural villages and with ages below 30 years old.1 As a landlocked country in Southeast Asia, Laos consists of an irregularly round part in the north that narrows into a peninsula-like region stretching to the southeast. It is a small communist country that shares the borders of Cambodia, Vietnam, Thailand, Myanmar, and China. Overall, the country has 1,050 km area of land where a majority of the country works in rich cultivation of paddy or rice.2
The capital of Laos is Vientiane, located on the Mekong River in the northern part of the country. The official language of Laos is Lao. French is preferred by the upper-class especially in the urban areas whereas Vietnamese is the third language of the country. English competes with French as the preferred foreign language, featuring in many school systems in Laos and is increasingly being regarded as the language of global commerce. However, the rural areas are minimally exposed to English and speak the regional and official language of the country. Therefore, the languages to use for marketing are English and Lao.
The country follows the predominant religion – Theravada Buddhism. Other smaller religious communities include Christians, Muslims, etc. Laos is predominantly rural and agricultural in nature. The numerous isolated valley communities preserve varieties of traditions, languages, and dialects in rural areas. The urban Vientiane is the capital of Laos, which has four or five large towns where the population is predominantly Laotians, with smaller groups of Chinese, Vietnamese, and Indians. In the urban land of Laos, tourism and travel agencies are popular business operations. Therefore, our target audience will consist of the age group below 30 years old, the travel and tourism sector, and Buddhist communities.
The different modes of market penetration
Laos is a small country that has limited resources and skills in the economy. Hence a level one marketing, also known as the conventional practice of advertising, reaches the majority of the small land compared to a level two digital marketing. Farming culture in the rural areas and the people settled in those areas are exposed to the practices of conventional marketing in the form of TV, radio, newspapers, print, and outdoor advertising. These are the most prevalent types of marketing in rural parts of Laos as the majority of the people are illiterate and spend their time either indoors, on the roads, at the shops, on farms, or traveling to cultivated lands. Hence advertisement reaches a wide audience who are in such places. Alternatively, digital marketing is mainly welcomed in the urban areas where the city dwellers stay and have access to mobile phones, laptops, and digital gadgets. Rural residents spend time watching television while urban residents spend their time on digital devices on top of watching television, which is a routine part of their lives. Facebook and YouTube penetration is high in the urban areas as people are generally more educated and have the knowledge of accessibility compared to those living in rural areas. Organic promotion and paid ads are good means of promotion on these apps.
Social Media Penetration
Out of the 7.22 million population, 3.1 million are active social media users in which Facebook is used by 2.9 million people in the country.3 Facebook ads reach 56% of active users and 99.6% of users access Facebook from their mobile phones.4 On an average, every quarter sees an increase in the number of Facebook users and the ad reaches 7.4% more users than the previous quarter.5 After Facebook comes YouTube where online content is consumed by people of all ages in the urban and rural areas. Hence, television, radio, print, newspaper, or hoarding advertisements, along with Facebook ads and YouTube marketing, allow businesses to reach a wider audience.
However, the usage of 3G services in Laos remains low, with estimates indicating that penetration is still less than 0.5%. Usage of 3G has grown by almost 100% in the past 12 months and the number of internet users are expected to increase by 20% within the next 3 years.6 Compared to the previous years, this signifies that it will bring internet services to reach a far greater proportion of the population.
Limited infrastructure has been one of the biggest barriers. If there is a comprehensive infrastructure in place, the country can be more digitally occupied. Telephone services are used by just 4% of the population and online logins on websites are less than 25,000.7
More than a third of internet activities originate from mobile devices. Hence, the access to mobile internet holds a major digital penetration for online growth. The good news is that 3G services have already reached more than 80% of Laos’s population and the government has further plans to increase it in the upcoming months. Furthermore, 4G services are already being used in Laos’s capital, Vientiane. This helps the country to browse and consume online content faster and more easily.
This developing country, Laos, is expected to see a hike in internet usage. Active social media users and their engagements are likely to increase in the coming years. Furthermore, the country expects to access advanced mobile networks and latest technology which will boost growth in all areas of the online ecosystem. This helps to build the digital landscape in the Laos market.
Currently, with limited digital practices on social media and advanced traditional marketing practices, the country has done well despite being one of the poorest countries with a largely rural population. Following traditional marketing techniques give the country good marketing outputs. Trade of harvested goods and mobility allows the people to take notice of outdoor advertising practices while the country’s preference for newspapers, radio, and television meant that promotion, advertisement and sales through conventional methods of marketing are still the recommended channels.