Vietnam Overseas

VietNamNet Bridge – Tran Phi Hung, Vice Executive Manager of Unlimited Financial Network, which is based in Texas, the US, talks about the interests of American investment funds in Vietnam.

Most Vietnamese companies need capital to expand their operations but not many firms can successfully access local sources of capital.

• Can they seek capital from the US?

  There are many sources of capital and investment funds in the US. The sources of capital are not only government organizations but also private sources are ready to support investment projects in the US or outside the US, for example the Overseas Private Investment Corporation (OPIC) is a financial investment institution of the US government. The OPIC provides capital for American citizens who have joint ventures with partners outside the US. Vietnamese companies that have joint ventures with American individuals or companies can get access to the capital of OPIC. There are many similar institutions like OPIC in the US. In addition, the US has many big capitalists who set up investment funds to invest in potential projects everywhere.

• What projects in Vietnam are American financial funds interested in?

  They pay special attention to real estate projects in Vietnam and projects in other potential areas. Each fund and financial institution has different requirements for projects that they invest in.  For example, OPIC requests that firms whom they provide capital to have equity capital and they will lend around 25% of the total capital. Projects must help improve the living standards of local people, etc. OPIC currently has around $4 billion of capital and it gives loans to projects outside the US, except for those in countries that are not friendly to the US. OPIC’s lending interest rate is quite attractive, around 5-6%/year for medium- and long-term loans.

• Have you helped any Vietnamese businesses or projects to receive capital from US financial institutions and investment funds?

  So far two projects have successfully accessed capital sources from the US. The first project is to plant 10ha of cocoa trees in the south worth US$27 million, $20 million of which is being borrowed from a private fund. This project is underway. We are considering the third project of a general hospital in HCM City. This hospital wants to borrow capital to pay its debts. So far, no project in Vietnam has accessed the capital of OPIC. One of the reasons is their technical reports don’t satisfy the standards of OPIC. We will work with the HCM City Economic University to open a training course on how to write technical reports under OPIC requirements.

Posted 09/08/2007, Source: TBKTVN

In a country whose peasant army once marched on flip-flops cut from old tires, Gucci beach sandals priced at $365 can come as a shock. But the luxury market is booming in Vietnam, where Ho Chi Minh’s communist revolution exalted equality and the common man just a generation ago. As the country begins to embrace private enterprise, its nouveaux riches are snapping up shoes at Gucci, handbags at Louis Vuitton and watches at Cartier, offering proof of how much the country has changed after decades of war. “I sold a $4,000 leather jacket recently,” said Do Huong Ly, a stylish young saleswoman at the Roberto Cavalli shop in Hanoi. “Our customers want people to know that they are high-class.” Not long ago, displays of wealth were frowned upon in Vietnam. Those tire-sandaled troops who bested the French colonial army and outlasted the Americans embodied frugality and egalitarianism. The revolutionary government snatched up the assets of the wealthy and redistributed them to the poor. But since the late 1980s, a government that once micromanaged all economic affairs has been introducing free-market reforms and courting foreign investors, and with them have come new western styles and attitudes. “Members of the new generation want to enjoy life and pamper themselves with luxurious things,” said Nguyen Thi Cam Van, 39, who has purchased five $1,000 handbags at Louis Vuitton. “If I can afford to buy something nice, it makes me feel proud,” said Van, who works at Siemens and also consults for a Vietnamese import company. “It lets you show people your taste and style.” One of her friends has 50 Louis Vuitton bags, Van said. “I think five is enough.” Some of Vietnam’s shopaholics are young people who work for multinational corporations but still live rent-free with their parents. Others work for powerful state-owned companies and many have made fortunes in Vietnam’s small but booming private sector. They indulge their urge to splurge at Dolce and Gabbana, Burberry, Escada, Rolex, Clarins, Shiseido and the like. In the two decades since Vietnam began implementing its economic reforms, the nation’s poverty rate has been cut in half, and per capita income has doubled in the last five years. Still, most workers in this nation of 84 million people still earn just a dollar or two a day toiling in the farm fields. Those working low-wage jobs find the new lust for luxury hard to stomach. “The rich are getting richer, and the rest of us are struggling to make ends meet,” said Dao Quang Hung, a Hanoi taxi driver. “The money they spend on a Louis Vuitton bag could buy several cows for a farmer’s family and lift them out of poverty.” At the new Gucci shop in Ho Chi Minh City, the flip-flops are among the economy items. The black-clad sales staff, looking fresh off a fashion show runway in Milan, offer a pair of golden, spike-heeled shoes for $765. Across the hall at the Milano store, the display last year featured a $54,000 Dolce and Gabbana dress, one of just three in the world, according to marketing director Dang Tu Anh, who represents both stores. The others, Anh said, were worn by film star Nicole Kidman and Victoria Beckham, the former Spice Girl. Milano’s best customers, Anh said, think nothing of dropping $5,000 on a handbag and a pair of shoes. “If they can buy something luxurious, it proves they have money,” Anh said. “And that’s good.” Vietnam’s older generation, shaped by the hardships of war, finds itself at odds with younger Vietnamese over the new consumerism. “Now the younger generation in Vietnam is racing for materialistic enjoyment,” said Huu Ngoc, a 90-year-old scholar and author. “Individualism is destroying our cultural identity. We may become richer but lose our soul.” The war generation wasted nothing and always saved for the future, convinced that catastrophe lurked around every corner. But opinion surveys show that the 60 percent of Vietnamese born after 1975 are very optimistic about the future _ and determined to enjoy the here and now. Van, for example, enjoys pampering herself at the salon with massages and manicures. But she lives in fear that her father, a college professor, will learn about her five Louis Vuitton handbags. “I can’t tell him I have these,” she said. “And I would never tell him how much they cost. He would think that I was completely irresponsible.” Van’s indulgences are modest compared to those of Vietnam’s super elite, who tool around in the ultimate status symbols: a shiny BMW or Mercedes-Benz. And pay cash. “In America, you pay in installments,” said Nguyen Hoang Trieu, luxury car dealer in Ho Chi Minh City, the former Saigon. “Here, you pay all at once, in cash. Sometimes people come in here with $400,000 in a suitcase.”

By BEN STOCKING, Associated Press Writer AP - Monday, September 24

As one who came to the United States as an immigrant and chose it as his new home, I can say, admittedly with some bias, that this is the greatest country in the world. Most Americans would echo that sentiment. But, the abundant degree of self-belief in American superiority is both a strength and a weakness. 

Nowhere is this more clearly evident than in the attitude toward ethnic citizens, both as a nation and as marketers. Americans are woefully ignorant of most things foreign. From xenophobic politicians to high school students who can’t distinguish Athens, Ga., from Athens, Greece, there seems to exist a cavalier air of disinterest about other cultures. 

For example, with the exception of cable’s Discovery and Travel channels, media coverage of ethnic cultural activity is sparse. 

But ethnic audiences represent massive business opportunities. It is estimated that ethnic spending power is $500 billion annually. Ignoring for a moment the African-American community, a separate column in its own right, the major ethnic communities in the United States comprise Hispanic (Latin America, Mexico, Cuba), Asian (predominantly China, Korea and Japan), the Indian subcontinent (India and Pakistan), the Middle East and Europe (primarily eastern European countries and Russia). 

Looking at the Hispanic and Asian sectors, the numbers are startling. The nation’s 22 million Hispanic-Americans are responsible for a household growth rate in the 1990s that is outpacing the general market 4-to-1. 

Hispanic disposable income is increasing three times faster than the general market. In addition, about 7 million Asian-American consumers represent close to $225 billion in purchasing power. 

Space prevents the discussion of every ethnic sector, but some examples, Asian-Americans and the Indian and Pakistani communities, will highlight some insights into ethnic marketing. 

What do we know? 

Asian, Indian and Pakistani audiences represent incredible buying power, both as a purchasing bloc and as individual consumers. Because many initially came to the United States to study, they are a well-educated audience. In fact, education is one for the most highly revered attainments within those cultures. 

They are exceptionally hard workers and strongly committed to their vision and goals. They also tend to be honest and ethical and have a low default rate on business loans. 

They’re also very entrepreneurial. Currently, 55 percent of budget hotels in the United States are owned by Indian immigrants or their descendants. The corner-store retail environment, from convenience store to dry cleaner, is now owned, managed and run by Asian, primarily Korean, merchants in most major cities. 

Fast-food franchises from Blimpie International Inc. to Dairy Queen Corp. are being gobbled up by Indian and Pakistani entrepreneurs who are using these entry-level retail opportunities as a way of securing their American dream. 

How do we approach this audience? 

If there is one distinguishing element of the ethnic market, it is brand loyalty. Ethnic consumers tend to be much more brand loyal than mainstream Americans. Once loyalty has been established, the consumer will maintain the relationship with the brand, in many instances, over a lifetime. 

Some of the smarter big boys are learning how to play the game. These companies include AT&T Corp., American Express Co., CitiBank, MCI Telecommunications Corp., and a few of the larger and more sophisticated insurance firms. 

All of these companies understand the potential inherent in ethnic marketing. They have specified strategies and funds precisely for that purpose. 

Smart marketers understand that mainstream media is ineffective for ethnic advertising. Ad agencies, lacking verifiable data, tend to ignore ethnic media. 

With so many languages and cultures to address, the smart marketer will seek language-specific media, both broadcast and print, as a way to communicate the brand message. 

The fact that a company advertises its products in ethnic media is in itself reinforcement of the brand loyalty equation. Ethnic consumers will reward those who ask for the order in their native language. 

Remember that, while first-generation ethnic consumers are committed to print, their sons and daughters, like their mainstream peers, are big electronic media followers. 

Brands carry added cachet, and many ethnic consumers, particularly the Japanese, will pay dearly for the right to carry the Prada bag or wear the Hermès scarf. 

This audience is quality-conscious and will pay the price. Yet, they’re price-conscious as well. Money has been too hard to make to be frittered away indiscriminately. These are intelligent consumers who expect real value for the purchasing dollar. 

The advice for any ethnic marketer is simple: Treat the marketplace as you would any niche market. Understand the culture. 

Life insurance companies have learned to appreciate this fact. That’s why they employ ethnic salespeople who successfully sell within their own communities. 

How to use niche marketing 

Businesses need to be willing to hire ethnic personnel or engage ethnic consultants to help formulate and implement strategy and direction. 

To ethnic communities, relationship is everything. Relationships are made and strengthened by understanding and appreciating the culture and making an effort to engage ethnic consumers on their own ground. 

Therefore, businesses need to be prepared to invest in event sponsorship. This is a classic case of dollars being put to work at the ground level within the community. Ethnic consumers will reward that investment with additional brand loyalty. 

Businesses need to get involved in ethnic community groups, civic and trade associations and any environment where leaders and influential people congregate. Because of the commitment to family and leadership in these cultures, personal referral and word-of-mouth become an important strategy for spreading the message. 

Businesses can no longer afford to be either ignorant or disdainful of the ethnic consumer. In the new millennium, they will constitute a consumer juggernaut. 

Smart marketers will put prejudice and disinterest aside and look carefully at this rising opportunity that has been ignored by many. 

Posted Monday, August 10, 1998, Alf Nucifora , American City Business Journals 

By the end of the decade there will be almost 9 million Asian Americans living and working in the U.S.  During the past decade, the Asian American population growth rate was twice that of Hispanics, six times that of African Americans and twenty times that of whites.  (CQ Researcher, December 13, 1991). Like Hispanics, Asian Americans are a diverse group, with 13 sub-markets.  As of 1996, the largest segments are Chinese (1.6 million), Filipino (1.4 million), Japanese (850,000), Asian Indian (815,000) and Koreans (800,000). 

Demographic studies show that about 56% of Asian Americans live in the West.  Roughly 18% live in the Northeast, 14% in the South and 12% in the Midwest.  Asian Americans are highly unbanized, with 93% living in a metropolitan area.  Contrasting greatly with white Americans who are twice as likely to live in suburbs as in central cities (American Demographics May 1994).  The high level of Asian immigration to the United States has created a youthful population.  The average age of Asian Americans is just 30, compared with 36 for whites.  As the population enters their peak earning years, their relatively high incomes will further increase.

As countless studies have shown, Asian American households are more affluent than those of any other racial or ethnic group, including whites.  With a median household income of over 40,000, nearly 32% of Asian American homes report incomes exceeding $50,000.   Compare that to 29% for whites.  Each year the group spends an estimated $38 billion on retail purchases.

For a number of reasons this population has been presented as a “marketer’s dream”.  First, as cited earlier, the population is young.  Second, the Asian American population is typically highly educated.  Among adults 25 or older, 14% are college educated, compared with only 9% of the general population.  An additional 41% of Asian American adults have completed four years of college, versus only 23% of the total population.  With a very different make up than other ethnic groups, their spending habits are equally different. 

As a group they are more comfortable with technology than the general population.  In October of 1990, American Demographics reported that this group is far more likely to use automated teller machines, own home computers and compact disc players.  If that was the case then, surely it is more relevant now.

Though a larger than average percentage of Asian American dollars are spent within its own community, this group shows no reluctance to purchase American products even when Asian or other foreign alternatives are available.  In fact, Ford is the automobile of choice for 28.7% of the population.  Toyota is a close second at 21.9%, while Honda represents just under 9.1%.

Like Latinos, Asian American subgroups often have dramatically different buying patterns and preferences. As a group, Asian Americans are good customers for educational offerings, real estate, state-of-the-art technology and other high-priced items.  “Real estate is a popular investment for many Asians because it is tangible,” states Eleanor Yu, president of Adland and Adland Worldwide of San Francisco.  Among the Vietnamese population, better-priced jewelry is a frequent purchase.  Having experienced war and political turmoil in their country, many in this group think that it is wise to invest in items that can be converted to cash more quickly should the need arise. 

As with other ethnic groups, the Asian American population is often very brand-loyal.   Savvy marketers such as Colgate-Palmolive, whose toothpaste sales in Asia excels, continues to capitalize on this brand loyalty and target immigrants to the U.S.   Anheuser-Busch, known widely for its beer, also sells eight different varieties of rice through its agricultural division.  Its marketing campaign consists of direct ads to all the various Asian groups with culturally appropriate copy for each group.   “That is a very expensive undertaking for any company,” says Choi Lee, commenting in the International Journal of International Business Studies.