When CSR Backfires: KATINAT Vietnam's Communication Crisis

KATINAT, a well-loved Vietnamese coffee and tea chain, has become a familiar name across the country with over 70 outlets. Known for its trendy vibe and youthful energy, KATINAT has carved a niche in Vietnam’s café scene, attracting a loyal customer base, particularly among the young and social media-savvy crowd.

On September 12, 2024, KATINAT announced a CSR activity aiming to raise funds for victims of the Yagi Typhoon in Northern Vietnam, specifically targeting mountainous regions. Their message, promising to donate 1,000 VND for each drink sold from September 12 to September 30, led to significant backlash. The post read:

“Dear people of the North,
In this difficult time caused by storms and floods, KATINAT wishes to contribute by donating 1,000 VND for every drink sold in our stores from 12/09 to 30/09. Together, we can overcome this disaster.
We hope for brighter days ahead, and wish for everyone’s safety!”

Initially, this might seem like a heartwarming call to action. The idea of small efforts accumulating into significant change is beautiful. However, given the urgent situation, the approach KATINAT took left many wondering: "Why did such a well-intended action spark a storm of controversy?"

Why Did KATINAT's CSR Spark Controversy?

The Nature of the Product

KATINAT operates in the beverage industry, offering drinks—a service more aligned with leisure than necessity. This isn’t something customers truly "need," and with plenty of alternatives available, they hold the power to choose from a wide range of brands. This creates a delicate balance between corporate responsibility and how they "sell" their cause.

Perceived Marketing Gimmick

By offering 1,000 VND per beverage sold, KATINAT's campaign came across as more of a sales promotion than a genuine philanthropic effort. Customers felt like they were being manipulated into buying more drinks (a non-essential product) under the guise of contributing to disaster relief. Exploiting human emotions for commercial gain is risky—especially in times of crisis—and can lead to backlash. The key question raised was: "If no one buys drinks during this period, will Katinat still donate to the victims?" This approach made the public question Katinat’s motives, interpreting the initiative as a marketing stunt rather than a heartfelt effort to help.

Timing Misalignment

Timing plays a crucial role in crisis management. The typhoon hit on September 9, followed by three days of severe flooding. KATINAT's announcement came on September 12—not exactly late, but not early either. By then, many other businesses and individuals had already mobilized with significant donations. Seeing people selflessly contributing millions of dong made Katinat’s promise to donate just 1,000 VND per drink feel insignificant in comparison. The company’s contribution, while technically generous, was dwarfed by the immediacy and scale of aid provided by others. As the saying goes, "It’s not just about what you give, but how you give."

Moreover, customers were frustrated by the fact that KATINAT would only be able to donate at the end of the month when sales had been tallied, delaying much-needed relief efforts.

Messaging Misstep

While the company likely intended to create a sense of solidarity and encourage participation from its customers, the specific wording and presentation of the campaign made it fall flat in a way that might have been avoidable with more careful messaging.

Framing the Donation

KATINAT's choice to highlight the 1,000 VND amount—a mere fraction of the cost of a drink—struck the wrong chord. When customers saw the contrast between a 60,000 VND drink and the 1,000 VND donation, they couldn’t help but think: "So most of the profit still goes to KATINAT, and only a token amount goes to charity?" The decision to anchor the donation to sales performance also suggested that charity came second to profit. Customers started wondering: "If I want to donate 50,000 VND, do I need to buy 50 drinks first? Wouldn't it make more sense to donate directly?"

Social Media's Fast-Paced Environment

KATINAT's campaign was rolled out primarily through social media channels like Facebook and Instagram, which are ideal for quickly reaching their young, trendy demographic. However, the nature of these platforms posed a particular challenge. Social media is characterized by rapid information exchange and “snap judgments,” where users don’t often take the time to analyze information in depth.

KATINAT may have assumed that a large-scale participation from customers would lead to a significant donation overall, but social media audiences tend not to think in these terms. Instead of processing the long-term value of a campaign, they tend to focus on immediate, visible figures—1,000 VND per drink—without considering the larger cumulative impact.

This phenomenon can be explained through the concept of fast vs. slow thinking (based on the work of psychologist Daniel Kahneman). Social media encourages fast thinking—reactions are driven by emotion and first impressions, with little room for reflection. KATINAT's 1,000 VND per drink initiative felt inadequate to an audience wired for fast judgments. Users quickly perceived the donation as trivial compared to the price of the drink and shared their dissatisfaction with others. In the short-attention-span world of social media, no one is likely to spend time calculating the cumulative effect of thousands of drinks sold over weeks; instead, they react to the single number put before them.

The result? A campaign that might have been meant to show corporate responsibility and support for a worthy cause ended up being seen as opportunistic and profit-driven.

The Communication Breakdown: Encoding vs. Decoding

At its core, KATINAT's crisis was the result of a communication failure. Let’s break it down using the Communication Process model:

Idea Formation

KATINAT's intent was clear: they wanted to show solidarity with the victims of the typhoon while also enhancing their brand image through a CSR initiative. On paper, this was a well-meaning effort to blend community support with brand presence.

Encoding

This is where things went awry. The decision to donate 1,000 VND per drink, while mathematically sound, felt off when communicated to a general audience. The message focused on a tiny, tangible number rather than the broader intention behind the campaign. It failed to emphasize how much KATINAT could raise in total, and instead highlighted what felt like an insignificant contribution.

Channel Selection

KATINAT chose social media platforms, such as Facebook and Instagram, to share their campaign. While these are great for reaching their young, trendy demographic, they are also places where messages can be rapidly misinterpreted or taken out of context. With short attention spans, people only focused on the "1,000 VND" part of the post, rather than understanding the campaign’s full scope.

Decoding

This is where the audience steps in. Unfortunately, they decoded the message as a self-serving PR stunt. People quickly shared their frustration, interpreting the initiative as an attempt to boost sales rather than an earnest effort to help the victims.

Feedback

The public’s feedback was swift and severe. Instead of the brand love KATINAT had hoped for, they were met with a wave of disappointment and anger. Had KATINAT anticipated this and responded quickly—perhaps by increasing their donation or matching customer contributions—they might have turned things around. But delayed action only deepened the resentment.

Recommendation for Next Time and Next Steps

Next Time: A Proactive Approach with Transparency and Thoughtful Messaging

KATINAT could significantly benefit from taking a more proactive and transparent approach in future campaigns. A key recommendation would be for the company to donate upfront, before announcing the campaign. By doing so, they would signal their genuine commitment to the cause, showing that the campaign is not an opportunistic sales tactic, but rather a well-planned initiative grounded in real, pre-existing action.

This approach could also help build trust with the audience. Customers are more likely to appreciate campaigns where companies have already taken concrete steps, rather than feeling like they are being used to contribute in a minimal way.

Better copywriting would also be essential. KATINAT should avoid focusing on small, easily misconstrued figures. Instead, they could emphasize the cumulative impact of the donations or provide clear examples of what a significant total amount could achieve.

A clearer explanation of the 1,000 VND figure—why it was chosen and how, collectively, it would add up—could also have mitigated some of the backlash. For example, the campaign message could have said: “Together, with every drink, we aim to raise X million VND for typhoon relief.” This would shift the focus from an underwhelming small figure to a collective effort with a bigger purpose, helping each customer feel that their purchase is contributing to something larger.

Next Steps: Navigating the Crisis and Rebuilding Trust

At this point, as the situation starts to snowball into a potential PR crisis, KATINAT should take immediate steps to acknowledge the flaws in their execution and messaging. Acknowledging the mistakes and being transparent with the audience is crucial.

Following that, they should focus on solutions, offering clear next steps for how they will improve their CSR efforts moving forward. They could even announce additional initiatives to help those affected by the typhoon, such as new donation strategies or collaborations with relief organizations.

Every challenge or misstep offers an opportunity for growth. By taking responsibility and showing a genuine willingness to improve, KATINAT has the chance to demonstrate to customers that they are a brand that learns from mistakes and is committed to better serving their community.