· Business · 4 min read
Kill Zone Brand Legacy Against Rich Gen-Z as Businessmen
Legacy brands face a critical challenge from rich Gen-Z businessmen who prioritize supply chain efficiency. This article explores why Vietnam and China dominate manufacturing over Indonesia in this competitive landscape.
Kill Zone Brand Legacy Against Rich Gen-Z as Businessmen: The Efficiency of Supply Chains Using Vietnam and China Manufacturing vs. Indonesia
In today’s competitive global market, legacy brands face a unique challenge from the emerging generation of wealthy Gen-Z entrepreneurs. Unlike Millennials, Gen-Z consumers and business leaders are digital natives who value efficiency, transparency, and innovation in their supply chains and product sourcing. This generational shift creates a “kill zone” for traditional brands that fail to adapt, especially when it comes to manufacturing and supply chain efficiency.
Gen-Z and Legacy Brands: A Complex Relationship
Gen-Z, comprising 68 million individuals and soon to represent 40% of consumers, holds $44 billion in annual spending power. Unlike Millennials who often rejected legacy brands, Gen-Z is more open to them - if these brands align with their values and demonstrate genuine purpose beyond profit. However, for Gen-Z businessmen, efficiency and visibility in the supply chain are critical. They expect seamless, tech-enabled sourcing and manufacturing processes that legacy brands sometimes lack.
Why Vietnam and China Dominate the Manufacturing Landscape
When it comes to manufacturing, Gen-Z entrepreneurs tend to favor supply chains in Vietnam and China over Indonesia. This preference is largely due to the superior efficiency, infrastructure, and technological integration found in these countries.
China’s Supply Chain Efficiency
China remains the world’s manufacturing powerhouse due to its decades of experience, advanced infrastructure, and cutting-edge technology adoption. The country boasts:
- A vast network of warehouses and storage facilities equipped with temperature and humidity control systems.
- High interconnectivity through extensive rail and road infrastructure, enabling fast and reliable material movement.
- Automation in distribution and manufacturing, including GPS tracking, factory automation, and supply chain software for process optimization.
- Multiple logistics operators fostering competition, which reduces costs and improves service quality.
- Shorter delivery times due to digitized and automated supply chain processes, reducing bottlenecks and enhancing brand reliability.
These factors make China an attractive sourcing destination for Gen-Z businessmen who demand speed, quality, and cost-effectiveness.
Vietnam’s Emerging Manufacturing Efficiency
Vietnam is rapidly becoming a global manufacturing hub, attracting significant foreign investment. While it historically lagged behind China in efficiency due to infrastructure and management challenges, recent improvements in factory management practices are closing this gap. Vietnam offers:
- Lower labor costs and favorable trade agreements.
- Increasing adoption of better management strategies that improve production consistency and product quality.
- Infrastructure development focused on roads and logistics to support efficient supply chains.
- Potential to rival China’s efficiency with continued investment and management reforms.
Vietnam appeals to Gen-Z entrepreneurs seeking a balance between cost savings and growing manufacturing sophistication.
Read more about Enterprises and Manufacturers Must Take Their Digital Presence Seriously
Indonesia’s Manufacturing Visibility and Innovation Challenges
In contrast, Indonesia’s manufacturing sector, despite being the 12th largest globally, struggles with visibility and innovation. The country’s manufacturing contribution to GDP has been declining due to a lack of new and innovative products. Research shows Indonesia produces far fewer new manufactured products compared to neighbors like Vietnam and Thailand. This lack of diversification and innovation limits Indonesia’s appeal as a manufacturing base for Gen-Z businessmen who prioritize cutting-edge, efficient supply chains.
Moreover, Indonesian manufacturing is less visible in the devices and products used by Gen-Z entrepreneurs, who often source from more established manufacturing hubs in China and Vietnam. This invisibility further diminishes Indonesia’s attractiveness as a supply chain partner for legacy brands trying to win over Gen-Z.
Conclusion
The “kill zone” for legacy brands against rich Gen-Z businessmen is defined by the ability to leverage highly efficient, transparent, and technologically advanced supply chains. Vietnam and China lead this space due to their superior infrastructure, automation, and management practices, making them preferred manufacturing hubs. Indonesia, despite its size, faces challenges in innovation and supply chain visibility, limiting its role in this competitive landscape.
Legacy brands aiming to capture Gen-Z’s business acumen and spending power must rethink their manufacturing and supply chain strategies, possibly by integrating Vietnam and China’s manufacturing efficiencies or by innovating Indonesia’s manufacturing ecosystem to become more visible and competitive.
This strategic shift is essential to survive and thrive in the new business era shaped by Gen-Z’s unique demands and expectations.
