Posts

On the road north of Vientiane.

Vientiane, Lao PDR

/in , , /by

In the 1960s Vientiane had the reputation of being the wildest city in Asia. Today, Laos–with Vientiane as its “sleepy” capital–is known as one of the most underdeveloped countries in the world. Usually, people know one of two facts about Laos: that it is land-locked or that it is the most heavily-bombed country, per-capita, in the world as a result of being a battleground for 20th century ideology. However, these quick facts don’t do the beautiful country and its warm and friendly people justice–and this basic knowledge barely scratches the surface of the complex history of Southeast Asia.

Laos shares a linked history with Vietnam but this relationship was further strengthened during French colonial times, and continued through the Second Indochina War. Even today, there are strong and deep ties between the two countries; for example, earlier this year Vietnam funded an upgrade to the Kaysone Phomvihane museum in Vientiane.

Similar to Vietnam, Lao PDR began to open its economy to the world in 1986 but maintained strict controls on its political apparatus. Despite the current political and economical situation, there is foreign investment here; a significant portion of new construction projects are implemented by either Vietnamese or Chinese companies depending on the size of the project. For existing construction, the electrical wiring indoors, while exposed, is run neatly, and the wiring in the streets are bundled together in an orderly fashion. In homes, switches and outlets are grouped together in junction boxes that are dispersed at chest level in various rooms. Anecdotally, the power might go out for a few hours once a month in the capital.

The most visible element of consumption by the upper class, luxury vehicles, are somewhat common throughout the capital and there are some nicely designed houses in a westernized sort of style dotted throughout Vientiane. The Toyota Hilux is the unofficial vehicle of Laos as it is ubiquitous throughout the capital. Furthermore, a significant number of vehicles are modified from their stock origins in some way–be it hood scoops, snake eyes, or chrome accents–so there is a growing tuner culture in Vientiane.

Unfortunately, rush hour traffic fills up portions of the city quickly and traffic jams can occur for no apparent reason, e.g., lack of a traffic collision or police checkpoint. When there isn’t heavy traffic, whirring diesel engines and turbo-chargers spooling up in SUVs are common sounds (and the drivers love to careen down roads meant to be driven on no higher than 30 or 40 KPH). Mercedes-Benz, Porsche, and other luxury vehicle brands have dealer presences in the capital; considering Lao PDR’s economic rankings, it can be surprising to see the Mercedes SLS in a showroom—and even more surprising to see it on the roads of Vientiane.

Vientiane Through Foreign and Local Eyes

Chiang Mai, Thailand and Vientiane, Lao PDR are two cities that are similar despite being in different countries; in terms of population, consumer preferences, and lifestyles they are very much aligned. Additionally, there is a strong Thai influence in regards to fashion, youth culture, news, and entertainment in Laos. The Lao PDR capital is literally across the river from northern Thailand, after all.

Even though many Thailand-based expats (farong in Thai) travel to Vientiane for visa-runs, it’s surprising that there isn’t a larger presence of foreign freelancers in Vientiane and in Laos in general. From a visa perspective, it can seem quite attractive for remote workers and there exists the support for foreign freelancers in Vientiane in the form of Toh Lao co-working space. For foreign full-time professionals, the options range from EMC to Sciaroni and Associates to DFDL (the last organization having been founded in Lao PDR). Of course, there are also some foreign banks such as VietinBank and Sacombank (Vietnamese banks) that have branches in Vientiane and there are also many foreign restaurants in the capital to represent small expat-operated businesses—Istanbul Restaurant, Soul Kitchen, and Jamil Zahid to name a few.

Many Non-Governmental Organizations (NGOs) have a large presence in Vientiane as well so there are expat support staff who regularly work with their local counterparts. In general, locals and foreigners who might meet and develop a romantic interest in each other can’t live together and sexual relations between them are forbidden–but marriage is always an option for those who find their soul mates in Lao PDR. A good way to meet people in the Vientiane business community is via weekly events such as the meetups put on by AmChamLao. In addition to the robust expat house party scene, there are the famous get-togethers at CCC bar in downtown Vientiane. Overall, Vientiane is a small place—there is a sense of a village mentality so reputation is important since “everyone knows everyone” in both the local and expat communities.

Outside of Vientiane and into the Countryside

The youth of Lao PDR’s high-society (Hi-So) in Vientiane can be found at Mark2 or Marina wearing trendy and/or revealing clothes and dancing the night away to western style arena house music from Thursday through Saturday nights. “After hours” almost always includes karaoke in some interesting but comfortable places for all sexes (since the culture is inclusive). Yet, these experiences are so far removed from the daily lives of the average Laotian.

Outside of Vientiane things quickly become poor besides a few cities like Luang Prabang, Pakse, and Suvannahkhet. Think unpaved roads, wooden huts, shoeless children, etc. However, throughout Lao PDR there exists a deeply respectful and hospitable culture with a strong beer drinking tradition; Lao people are perhaps the most laid back in Southeast Asia. The quintessential Lao experience is singing karaoke on a nearby river or body of water while drinking Beerlao. Social gatherings are important and women and men are not always separated at these events where people are sometimes sitting on the floor and are sharing food with one another. One unique aspect of Lao culture is the use of a single glass to drink beer in addition to a personal glass, which is passed around and shared among all the guests at an special event.

Other activities that Laotians enjoy include fishing, football (there already is a healthy representation of the up-to-date Germany World Cup jerseys), and petanque. Petanque in Laos is different than petanque in France (where it originated) and government ministries usually have a petanque court on site. Half the government ministries have their signs in French, and the other half in English (besides Lao)–the same goes for the road names in Vientiane.

The three most visible brands throughout Laos are Beeline, a telecommunications company; Beerlao, a product of Lao Brewing Company—a joint-venture between Carlsberg and Lao PDR; and Johnnie Walker, which is also popular in Thailand. Beerlao is on every restaurant sign as well as restaurant equipment such as standees and cash register desks—the result is a very large market share of beer consumption in Lao PDR.

A Future Focus

Officially, the Lao PDR government actively seeks investments in agriculture, hydropower, manufacturing, and tourism, according to its investment brochure. Organically, Laos experienced its first Startup Weekend ever in Vientiane in May of this year. Last week, Nana Souannavong, president of Snap International, and co-founder of Toh Lao co-working space, was gracious enough to explain to us the state of the startup ecosystem in Vientiane.

As Nana sees it, the biggest challenge ahead of the Vientiane startup community is getting people to understand what a startup is and getting people to be more entrepreneurial because they like the stability of public sector jobs. She shared with us that a generally strong curiosity among participants and a higher proportion of female entrepreneurs are the biggest strengths of the startup community in Vientiane. Those (aspiring) entrepreneurs who are passionate are the hardcore ones who stick through the multi-day events such as Startup Weekend–and they will be the ones to get the most out of the events. It gave her hope to see so many people show up to the first Startup Weekend because if no one showed up then she knew that the community wouldn’t be ready for another five years–the fact that people showed up was a huge victory for the Vientiane startup community. Nana also revealed that the winners of the May event are still working on the concept but as a side project since the team members already had a full-time focus before winning at the Startup Weekend.

While the official Lao PDR Small and Medium Enterprises (SME) office also supports startups, there will be many challenges on the way to creating and building a suitable environment for venture capital (VC) firms and angel investors to operate in—something does not exist although there are other forms of external investments. However, the legal framework does exist for foreign investors and founders in regards to equity but only outside of the retail industry. Nana’s advice to future entrepreneurs is to “think through what you are trying to do to understand the consequences.” Along those lines, her favorite quote is “life is an investment.” She should know since her company provides financial advice in money markets for local and foreign companies.

Startup Vientiane

At the Startup Weekend, there was a mix of tech and non-tech products and services being pitched but going forward there are no obvious areas for startups to form around. Y Combinator, perhaps the most prestigious startup accelerator, has a Request for Startups (RFS) feature on its website. While the list below is not a request for startups in the strictest sense, it does provide an external view on the opportunities in Vientiane and beyond after speaking to locals and longterm residents.

Opportunities for Startups:

-Targeting tourism (perhaps first via Triip.me and then expanding on original concepts specifically for Lao PDR)

-Creating accounting controls (perhaps in the form of mobile applications) for local and/or foreign SME in Lao PDR

-Products and/or services for the many NGOs in Lao PDR, e.g., tools to train local staff or tapping into external crowd funding

-Leveraging the growing consumer communities (for example, the car tuner culture) and collecting data points on them

-Helping expats to adjust to Laos by finding housing, goods, or services more easily (a better English->Lao dictionary, for example)

Perhaps when people think of Lao PDR in the future, a third fact might enter their consciousness: a growing startup hub centered around Vientiane. The people in Lao PDR have many things to offer the world–foremost among them is their hospitality and resilient attitude–this much is apparent upon crossing the border into Lao PDR. Another Startup Weekend is scheduled for later this year at Toh Lao co-working space–hopefully, the organizers will be able to build off the success of the last event and the participants will take even bigger risks to share their ideas with the community. It will be a long road indeed, but with community leaders like Nana, anything is possible.

 

The outdoor stage before the event.

Yamaha Town Hanoi

/in /by

On September 5 Yamaha Town Hanoi opened its doors to the public at 62 Nguyen Chi Thanh in Dong Da District, Hanoi. The opening of the showroom is unique because it is the only official Yamaha Motors Vietnam showroom in Hanoi—although a potential local partner has the option to takeover the management of the facility, which includes a state-of-the-art service area on the first floor (ground floor for the Americans), and office space on the second floor.

It took about a year to open this particular location but depending on a local partner’s resources (and relationships) and taking the dealership location into consideration, it can take between three and 12 months to open up a new Yamaha Motors Vietnam dealership.

Across Vietnam there are approximately 500 showrooms where Yamaha Motors products can be found in—a staggering figure considering that Yamaha Motors Vietnam has been operating here for 15 years. Yamaha Town Hanoi is the latest location to join the stable of other Yamaha Town locations throughout Vietnam. There are Yamaha Town locations in the cities of Can Tho, Vung Tau, Phan Thiet, Nha Trang, Da Nang, and Hai Phong. In the entire country, Hanoi is the second-largest market for Yamaha Motors Vietnam as the brand is more popular in Saigon.

At the opening ceremony, the director of Yamaha Motors Vietnam, Mr. Masaru Ono, spoke about grasping the needs of each customer segment and he also set the development of marketing as an urgent task. Mr. Ono laid out how Yamaha Motors Vietnam has a specific strategy to set the highest standards for its customers—something that will help Yamaha drive sales in the current market and in the future.

It’s currently a particularly difficult time in the motorcycle industry in Vietnam due to saturation, some recent economic uncertainty, and a rising interest in cars from consumers with increasing purchasing power. Currently, about 61% of the vehicles in Vietnam are motorcycles. But cars will not be able to fully replace motorcycles due narrow passages, housing density, and high vehicle tax barriers.

FZ150i brand ambassador, singer Tuan Hung was present at the event and delivered some remarks about his opinion on the Yamaha brand and its products.  Mr. Hung mostly spoke about his affinity for Yamaha’s sporty designs and how he thought they contributed to the brand’s success here in Vietnam. Afterward, fans were able to take photos with him in the showroom and outside on the sidewalk.

During the event there were different elements of Yamaha operators, each fulfilling a different role: promotion girls to attract attention to the products, ao dai girls to greet the event guests, Yamaha Grande girls to parade through Hanoi, and sales girls to answer questions from potential customers.

The event wrapped up with a parade of at least twenty Yamaha Grande scooters led by Mr. Masaru Ono, who also had the pleasure of owning the first motorcycle sold at the new dealership. He then proceeded to don proper riding gear in front of the showroom and took off in a southerly direction through the streets of Hanoi.

Yamaha’s Local Operations

Honda is Yamaha’s main competitor in Vietnam. Whereas Honda can leverage its economies of scale, and expertise in the automobile and other markets, Yamaha focuses specifically on motorcycles segments and connecting with its customers.

One way that Yamaha Motors Vietnam engages its customers is through a customer relations management (CRM) program based on three month intervals. It uses call centers to directly contact their customers in order to remind them of service dates and intervals. The service technicians also use stickers that are placed in the storage compartment of motorbikes (under the seat) so when getting gas the customers are reminded of the next service date as well. Because of these different methods of engaging consumers, the average Yamaha product has a seven year lifespan.

In terms of training and customer service, Yamaha Motors Vietnam’s technicians go through a training program to eliminate technicians with poor attitudes and/or a lack of soft skills. This training program ensures that graduated technicians will be able to deliver consistent experiences at every showroom, thereby resulting in satisfied customers. In order to be selected for the training program, technicians need to have at least a basic understanding/basic training of technical know-how.

Yamaha Motors, like many corporations, has a global strategy but largely relies on country organizations like Yamaha Motors Vietnam to implement local initiatives. For example, Yamaha Motors Vietnam has a specially modified caravan that goes into small towns across Vietnam. During local weekend events thousands of Yamaha riders will attend and receive free oil changes and other perks.

These local community support events are important because some motorcycle (and bicycle) riders do not perform basic maintenance on their vehicles, resulting in a smokescreen behind them due to burning oil or screeching brakes when stopping–so these sort of initiatives are imperative to keep the products functioning properly on the roads. Nine complimentary oil changes are included in the sticker price and every Yamaha product that is sold has a three-year warranty or coverage for up to 30,000 kilometers—whichever comes first.

All of Yamaha Motors Vietnam’s production is in northern Vietnam. Yamaha Motors Vietnam has about 7,000 factory workers spread across three factories in the surrounding areas of Hanoi. One factory produces spare parts and two are dedicated to the assembly of Yamaha Motors products. Additionally, about 200 marketing staff work out of an office in Hanoi.

A 15 Year Legacy and Positioning for the Future

When Yamaha entered the Vietnamese market, it initially made a big push in Saigon because the surrounding cities would and did end up following the trendsetting Saigonese. In Vietnam, Yamaha Motors Vietnam is positioned as sporty brand, targeting the young males consumer segment. Since Yamaha entered the Vietnamese market in 1999, it has used its sporty designs, sporty engines, and key local influencers to attract and maintain the attention of young Vietnamese men. Its tagline: “Revs your heart” and its byline on advertising, “Fun injected” (a play on words for “fuel injected” or the primary way fuel is delivered into engines), reflect this sporty and playful brand positioning.

Other foreign motorcycle/scooter brands have an easier time to target Vietnamese consumers because of consumer perceptions of higher-quality foreign products. For example, Piaggio is a go-to brand for women interested in scooters because Vietnamese consumers prefer American and European brands over even some foreign Asian brands.

Since Yamaha is not viewed as a luxury brand in the Vietnam market, it needs to focus specifically on certain motorcycle segments and leverage its competitive advantages. In part, this foreign preference is due to a desire for larger engines and models—which can present some challenges for operators with smaller bodies who are essentially sacrificing vehicle control for image. This example is one key difference that distinguishes the Vietnam market from even other markets in Asia.

In fact, Vietnamese consumers are so different compared to other consumers in Asia-Pacific region that Yamaha launched a product specifically for the Vietnam market, the Yamaha Grande. Previously, it had tested some Indonesian models in Vietnam but they were not that successful with consumers. Between markets, several elements can be changed such as the engine timing, shift points, throttle sensitivity, etc. For example, in other markets such as Malaysia, drivers like to go (and can go) faster on roads (partly due to better infrastructure).

The Yamaha Grande is specifically designed for women who like scooters. It took two years to develop the Grande, which was released over the summer. With the Grande, Yamaha now offers nine models to serve the Vietnamese market. For its Yamaha Grande marketing campaign, Yamaha enlisted prominent celebrities such as Ho Ngoc Ha to target and connect with women. In its message, there is a clear Paris influence (promoting foreign luxury elements) that is evident from its video promotion to the outfit on its Yamaha Grande girl riders—all of which is done in-house.

We were surprised to find out that the company puts on over 200 events per year—and it’s usually closer to 300 events per year with about 20 big events such as the grand opening of the showroom. Recently, Yamaha teamed up with Elite Model Look Vietnam 2014 in a quest to find the best model talent in Vietnam. During a “Thanks Party” held in Hanoi, the Yamaha Grande was prominently featured in the event, including a $20,000 version outfitted with Swarovski crystals.

The exposure from Elite Model and Fashion TV (who had correspondents at the party) will positively impact Vietnam’s image on local, national, and international levels by instilling national pride in Vietnamese and exposing new people around the world to the beauty and potential of Vietnam. If Yamaha continues these clever kinds of cross-promotional events then it will surely be able to capture the hearts of women in addition to its success of attracting thrill-seeking men in Vietnam and beyond.

Startup Weekend Hanoi 2014

/in , /by

It started off with 220 online applications and eventually organizers selected 70 people to participate in the Startup Weekend Hanoi held at Hub.IT from August 29 until August 31.

While there were no specific themes to adhere to, participants entered one of two tracks: Track A, which included pre-formed teams of three-to-five people and Track B, which consisted of pitch ideas from individuals who could be joined by others to form a team if his/her idea was was approved by the audience.

Startup Weekend was created in Vietnam in Ho Chi Minh City in 2011 and then expanded to Hanoi in 2013. This year the organization aims to open two chapters: one in Da Nang in central Vietnam, and another in Can Tho, in the Mekong Delta. Last month, the event was held for the second time this year at Hub.IT.

Hai Nguyen, an organizer of the Startup Weekends in Vietnam, shared with us that the aim of the events is not only to nurture and foster innovation and entrepreneurship in Vietnam but to also promote the empowerment of Vietnam’s strength sector, e.g., agriculture, through technology.

The opening session of the Startup Weekend started on Friday at 6:30 PM and lasted until about 8:30 PM. Each participant had one minute to convince the audience that his/her presented idea should be one of the final group selected by popular vote (with Facebook “Thumbs-up” stickers placed on the most-liked written ideas hanging on the wall).

Among the various ideas presented during the initial round but were ultimately not selected by the audience included a mobile payment app, an online ticket website, and a way to repurpose unsold flowers for tea and medicinal uses. One of several recurring themes throughout Friday night seemed to revolve around vegetables and student buffets. And there was even a pitch for an online social network specifically for those born in the 1990s—perhaps a clarion call to start a new social network every 10 years? In all, about 30 ideas were shared but only seven made the cut for each track.

Newly formed and established teams returned the next day to Hub.IT from 9:00 AM until about 7:00 PM where they met with seven mentors to hash out their concepts and to prepare their final pitches for Sunday, the last day of the event. Finally, during Sunday evening each qualifying team had four minutes to present their concept, followed by a four minute Q&A session led by the four-member judging panel.

The Final Teams Presenting

First up was Team BB, which presented a compelling story time application. The team had developed a story creation landscape so that users can create stories with their family or friends. Afterward, a user can record his/her voice which is then overlaid on the story timeline. There are some quite exciting potential case uses for this technology. For example, parents can use the app to connect with their children even if they are on the road or away from home or a group of friends can get together to create a story during a reunion.

Next up was OnTot, an online tutoring service that creates a marketplace for students and potential tutors. When asked by a judge if the model was scalable, the team leader responded that he believed it could be used in the region in a country like Thailand or the Philippines. While parents may be interested in using an online tutoring service for their children, it’s unclear if students, especially younger children, will use such a service effectively. The team leader did point out that the team can launch the service in a month (although it wasn’t clear if it would be a funded or bootstrapped version) so it will be interesting to see what happens next for OnTot.

The next team presented marketing solutions software for small and medium businesses (SMB), called Beeketing. In short, the software automates the marketing process and suggests a range of tactics for a business owner to implement. It definitely could help some nascent online businesses to get the word out about their products or services or to help differentiate them from competitors. A judge asked how the service would retain customers as their knowledge of marketing improved and proposed tiers like Beeketing 1.0, 2.0, etc. to effectively approach consumers on their marketing knowledge platforms. This tiered servicing makes sense for Beeketing to meet the different needs of its customers.

One traditional concept that was presented was part-pastry shop and part-dessert distributor, Hy Hy Kitchen, named after the creator. It’s basically a handmade treats online kitchen with (at least) a single brick-and-mortar aspired location. Based on the four judges reactions, it was clear that they admired Hy Hy’s enthusiasm and gumption for her concept of “any dessert, all delivery.” Ms. Hy Hy explained the nomenclature behind her concept and told the audience that she wanted people to order Tiramisu, and to associate it with “forget me not.” We certainly won’t forget the delicious-looking photos you showed of your products.

Next up was Olymsearch, which is currently in Alpha stage of development. It was one of the few working products that were presented at the Startup Weekend Hanoi 2014 and it positioned itself as the go-to service for a personalized shopping experience. According to the Olymsearch team, the online platform is a combination of Google, Facebook, and E-Commerce all mashed up into one. The difference here is that Olymsearch is looking to fill the local e-commerce needs of Vietnamese.

AnGiNgon is a listing site for food, and is also geo-location based. Imagine checking the app to see what food options are nearby when you step out to lunch. Perhaps it is loosely based on Yelp, but what problem is the app solving? And for whom? The majority of Vietnamese consumers are extremely preferential and rely heavily on family and friends for a variety of suggestions on where to go to eat, drink, and shop.

Team OIC presented an indoor mapping solution—a service that could be offered at a mega mall like Vincom’s Royal City. The service would be able to direct users to stores that they are interested in and also provide information about on-going promotions at various retailers. The team was one of the few that utilized the dual presentation screens. The promotion portion sounds great but unless they are exclusive promotions for the app users then it may be hard for the app to gain traction.

VNspace.vn is a way to help homeowners design the interior of their homes. It’s definitely geared toward modern and trendy Vietnamese since a large component of Vietnamese decor is how ornate, or big, or traditional an item can be—usually sourced locally. VNspace.vn looks to partner with name brands in order to promote and offer their products. As Vietnam continues to modernize perhaps VNspace.vn or a similar service can fill a growing need. The site is currently in a closed beta.

Occupy Buildings Project—no, not a political movement but rather a system for utilizing rooftops to grow vegetables and other leafy greens. The team even had an irrigation demonstration to show the judges how the watering system would work. One possible way to monetize the idea was to share some of the revenue with the building owners from the sale of vegetables or whatever greens that were harvested on the roof. As one judge rightly pointed out, it is a vision of the future, perhaps 20 years ahead of its time. It’s definitely a long-term project but it could substantially transform the way ecology and business is viewed in Vietnam.

VipiOne is a negotiation service that acts on behalf of those seeking to buy a residence in Vietnam. However, it’s not clear why someone would use the service instead of negotiating him/herself. It’s also not clear why a potential homebuyer would trust the young founders to carry out the transaction.

Last but not least was Fit n’Grit, a personal trainer app. The two concept creators are currently offering personalized fitness tracking—and already have clients. The pair of friends are fitness enthusiasts who are in their last year of university where they are studying accounting and finance. The kernel of the idea is good and there’s definitely a need for proper fitness training and nutrition education—too often gym-goers are seen cranking out sloppy rapid-fire repetitions to the beat of the Vinahouse music.

Yes, there are personal trainers available in some gyms but at western prices and one-to-one personal sessions don’t scale well. We suggest that the Fit n’Grit team start by providing value on social media to create an online community ready to try out their app whenever it may be ready. Another approach could be to partner with independent gyms to provide an introductory training session (and share fees with the gym) and at the same time the team could collect contact and demographic information.

The Winners and Looking Forward

OIC and BB team emerged as the winners when the judges’ scores were finally tallied. The winners of Hanoi’s Startup Weekend event will head to Saigon to participate in Demo Day organized by StartUp.vn and Business Startup Support Center on September 12. The winners of the DemoDay will head to Seoul, ROK, where $100,000 will be on the line at the Startup Nations Summit 2014 from November 23-25.

Bobby Liu, judge and founder of Hub.IT, where the event was held, felt that this time around had a lot more solid ideas from startups and the split into two divisions was fair to the participants. On behalf of Hub.IT, Mr. Liu stated, “we’re obviously glad that we could support such a significant initiative and look forward to doing more.”

There are definitely some exciting times ahead as the BB and OIC teams represent Hanoi at Demo Day Saigon. It was also great to see the variety of the initial ideas presented to the audiences during the Friday night portion of Startup Weekend Hanoi. For some ideas, the matter is a question of timing. For others, it’s a matter of finding suitable ways to execute the idea. And for another segment of ideas, they just need some time and love to either develop or discard. No one has a monopoly on good ideas—and with the support system and effective platforms in place in the startup communities of Vietnam, the ideas coming from entrepreneurs, coders, and young Vietnamese can be turned into sustainable and scalable business models.

The Changing Face of the Auto Market

/1 Comment/in /by

On August 27, 2014 the first Rolls-Royce Motor Cars showroom opened up in Hanoi, the capital city of Vietnam. Two events were held at the showroom in the HCO Building at 44B Ly Thuong Kiet, next to the Melia Hotel. One event was held for members of the press from 2:00 PM to 4:00 PM and included the official ribbon-cutting ceremony. Later, from 6:00 PM to 8:00 PM, an event for VIPs and potential customers was held in private at the showroom and adjoining outdoor patio.

British First Secretary, Andrew Holt, attended the event and delivered some prepared remarks about the significance of the first Rolls-Royce Motor Cars showroom in Vietnam. Mr. Holt expressed that he was honored to be part of the Vietnam success story. In fact, the common theme throughout the press event was the “remarkable success story” of Vietnam and the “country’s ambition for the future.”

In effect, the event on Wednesday was put into motion over a year ago. In June 2013 Rolls-Royce Motor Cars announced Regal Motor Cars as its first authorized partner in Vietnam. The chairman of the authorized dealer, Rolls-Royce Motor Cars Hanoi, is Minh Doan with Trung Doan serving as the Chief Operations Officer. In the time leading up to the official showroom opening ceremony on Wednesday, the brand’s Facebook page had already accumulated over 32,000 “Likes” which, according to Mr. Holt, served as an example of how the Vietnam market was ready for an official dealership.

When directly asked about unit sales in Vietnam prior to the opening of the official dealership, Paul Harris, regional director Asia-Pacific at Rolls-Royce Motor Cars, responded that it was difficult to know exactly how many cars had been sold in Vietnam due to unofficial channels but that it was around 100 cars. Mr. Harris revealed that Rolls Royce had directly supported one car’s production from Goodwood, England, where the company’s cars are assembled by hand.

Mr. Harris reiterated that now that Vietnam has an official dealership, it is the place to go to satisfy consumer demand for the brand and Rolls-Royce Motor Cars sees the Vietnamese market growing, with great potential in the future. In terms of global demand, the Ghost is the most popular model, followed by the Wraith and the Phantom.

Finding a Suitable Vietnamese Partner

The on-boarding process for the local partner was revealed by Mr. Harris; first, potential Vietnamese partners were encouraged to apply. Rolls-Royce then assessed the candidates, and analyzed the business, the partner fit, and passion of competitive candidates. Rolls-Royce selected Mr. Minh in part because he is a Rolls-Royce owner himself and the Rolls-Royce team felt that he was in a unique position to understand the brand and to deliver the brand’s message and values to the Vietnamese market.

During the Q&A portion of the event, a member of the Vietnamese press asked Mr. Harris why Regal Motor Cars was chosen as an authorized but not exclusive dealer. Mr. Harris responded that, for Rolls-Royce Motor Cars, authorization means exclusive as it has no intention to expand to a second dealership in Vietnam. Mr. Harris wrapped up his response by explaining that Rolls-Royce Motor Cars knows that demand is here in Vietnam for significant sales and that “we and our dealer partner are happy with the sales forecast but won’t divulge numbers.”

Rolls-Royce Motor Cars, currently owned by BMW AG, is in the midst of expansion plans in the Asia-Pacific region outside of China. Last year a showroom in Osaka, Japan was opened up and a new dealer partner was announced in Manila, Philippines as well.

The “Oriental Sun” Rising in Asia

On display was an $1.8 million model, the Oriental Sun, an exclusively produced limited edition model for Vietnam. That extravagant model was sold during the second event held at the showroom at night. In many ways it’s amazing that there is even a market for such vehicles in a country where the gross national income per capita is around $2,000.

It’s not surprising that the first Rolls Royce dealership opened in Hanoi instead of Saigon. Many luxury brands pass through the capital before setting up shop in the south where the customers usually evaluate products on more criteria besides price and/or country of origin. Rolls-Royce Motor Cars would be wise to continue these custom runs of single units (in addition to its Bespoke program) so as to allow potential customers in Hanoi and the surrounding areas to further differentiate themselves from their contemporaries—especially in the northern provinces of Vietnam. After all, one measure of uniqueness is the price tag between the same or similar products.

The Vietnamese Auto Market

Rolls-Royce Motor Cars’ expectations for the Vietnam market are in line with those of other auto manufacturers. Recently, Mercedes-Benz Vietnam announced that it had sold more than 1,000 cars in the first six months of the year. These sales figures amounted to a 70% increase from the same time last year and set a new record in the company’s 19 year history in Vietnam.

In total, more than 65,000 vehicles were sold in the first six months of the year according to Vietnam Automobile Manufacturers Association. A brand new car in Vietnam can cost two-to-three times or more than a similarly equipped model in the US due to taxes and import duties. Vietnam Automobile Manufacturers Association projects that a total of 130,000 vehicles will be sold this year, compared to 110,519 in 2013.

Luxury cars are becoming more common place in cities like Hanoi and Saigon. One can spot Lamborghinis, Ferraris, Maseratis, Bentleys and the full gamut of European and Asian luxury vehicles at any time of day or night while walking in either city’s downtown. While not everyone can afford such exotics or high-end luxury vehicles, there is still much demand for and attention given to these foreign brands.

In 2013, the Vietnam Motor Show, held at the Saigon Expositions and Convention Center (SECC) in District 7, Saigon drew over 155,000 visitors over the course of four days last October and resulted in the sale of 200 cars during the event. For comparison, the New York International Auto Show (NYIAS), the oldest and biggest auto show in the US, attracts slightly more than a million people over nine days. At the Vietnam Motor Show last year, some luxury brands such as Infiniti and Lexus made their first appearances at the event. And last year more than half of all luxury sales were comprised of Mercedes Benz vehicles—a sign of the preferred auto brand by Vietnam’s elite.

For those looking to score a deal in Vietnam’s pre-owned car market there are a myriad of options available including, but not limited to:

The Future of Auto (and Luxury Goods) Sales in Vietnam

As Vietnam’s economy grows, so too will grow the number of successful individuals who can afford the high price tags of luxury goods offered by established brands. These brands, of course, include luxury auto makers. In some ways, a car someone drives in Vietnam is more important than the home where s/he lives because everyone can see his/her car and few may see the inside of his/her home. This value placed on public appearances can lead to interesting situations where a high-end luxury vehicle may be parked in front of a modest looking house (or an attempt at an Asian castle).

Regardless, the number of people who will be able to afford these luxury vehicles and other goods in Vietnam will only increase. Auto and other luxury goods makers will need to find new ways for the nouveau riche and super rich to distinguish themselves from the hoi polloi. At the same time, the newest rich joining the ranks of the newly rich also leaves the door open for after market modifications from esteemed companies such as Brabus. Then, the only question left to answer will be where to drive such a super-charged beast? For sure not in rush hour traffic in either Hanoi or Saigon.

Still, the Vietnamese dream is to drive to work in a car. It serves as one measure that s/he has “made it” and it also helps to insulate from bad weather, pollution, and nasty injuries resulting from traffic accidents since cars are higher in the pecking order than motorbikes and other two-wheeled modes of transport.

The takeaway here should be that if rich Vietnamese can afford luxury vehicles with high sticker prices then they can probably afford whatever luxury brand you represent (and they will most likely want to buy it). The key is to set the new standard for whatever experience you are trying to create—because once you do that then most consumers and other brands will follow. Getting that first domino to tip may be tricky but the rewards will surely make it worth your while to make it happen.

A closer look at the showroom's facade.

A closer look at the showroom’s facade.

Mr. Holt addressing the crowd.

Mr. Holt addressing the crowd.

Right before the unveiling.

Right before the unveiling.

The exterior of the showroom.

The exterior of the showroom.

After the unveiling.

After the unveiling.

Mr. Harris addressing the crowd.

Mr. Harris addressing the crowd.

During the Q&A session.

During the Q&A session.

Mr. Harris and Mr. Minh.

Mr. Harris and Mr. Minh.

Before the event.

Before the event.

The team at Rolls-Royce Motor Cars Hanoi.

The team at Rolls-Royce Motor Cars Hanoi.

Vietnamese press checking out the Oriental Sun.

Vietnamese press checking out the Oriental Sun.

Opened in October, 2013 by the owners of SIN Lounge and The Living Room.

Vietnamese Music Trends

/1 Comment/in /by

The music scene here, like many things in Vietnam, is constantly changing. Traditional, pop, and electronic music all fuse together to take new forms, create unique sounds, and propel sub-cultures forward. While Vietnam has had its own flavor of electronic music, known as Vinahouse, it seems as if the global EDM craze is finally beginning to take a hold here with underground events leading the charge.

Late last year Steve Aoki performed for the first time in Hanoi (during his first trip to Vietnam) and then proceeded to celebrate this year’s Tet holiday with a show in Saigon. And earlier this year, Wally Lopez came back to Blanchy’s Tash in Saigon after his first time the year before. Now, Hardwell is the latest house music DJ scheduled to come to Vietnam for the first time ever as part of his “I am Hardwell” tour. Hardwell will be playing in Saigon’s Quan Khu 7 stadium on September 28 and General Admission tickets are currently on sale for 600,000 VND (approximately $30). VIP, VVIP, and CA tickets are also available.

[Update August, 2015: Zedd recently played in Ho Chi Minh City and Skrillex is scheduled to play in both Ho Chi Minh City and Hanoi next month.]

The larger-than-life style of music that is presented by Steve Aoki, Hardwell, and their contemporaries is full of high-intensity and high-energy beats and rhythms that lead into a “drop” where the crowd is simultaneously jumping or fist-pumping in unison. This variety of house music is growing in popularity with young and trendy Vietnamese here where most of the electronic music heard takes the form of Vinahouse, a hard-hitting, repetitive beat that continues until the end of a song.

Rumored to have originally been a Russian intro beat (lasting for no more than 30 seconds), the steady thumping seems to have captured the hearts of Vietnamese electronic music enthusiasts as they extended it to last the entire length of a song. Vinahouse can be heard everywhere: gyms, discotheques, and even street shops blare Vinahouse through speakers set up on the sidewalk in an attempt to draw a passerbys’ attention.

Actually, most of the music that can be heard in the streets of Vietnam’s cities comes in two styles: Vinahouse, or more traditional and soulful Vietnamese songs that usually have a somber deliverance. As in much of Asia, karaoke is popular here and citizens will sing karaoke in their homes with the volume turned way up for their neighbors to hear in the early to mid-evening. Some entrepreneurs have even set up portable “karaoke stations” on wheels where they can serenade diners on the sidewalk while they eat in exchange for a donation before moving on to the next group of diners.

The Music Scene in Vietnam

The music scene here is a far cry from the days of CBC Band. If you happen to go to any establishment where pop music is played then you will definitely hear Flo Rida’s Whistle at least once and perhaps several times per night. You might also hear variations of other American techno-remixed pop songs in some of the nightlife institutions of Saigon such as Lush, Apocalypse, and if you are unlucky/unsober enough to end up there, GO2 Bar on Bui Vien in Pham Ngu Lao. However, there are also Vietnamese clubs like Canalis and New Saigon where strictly Vinahouse tunes are blasted at dangerously high levels and patrons are dazzled with light arrays, lasers, and strobes while inhaling copious amount of cigarette smoke. Occasionally, some foreigners are mixed in with the crowd but the customers there are overwhelmingly locals.

Some of the more progressive and alternate locations for music other than remixed Billboard Top 20 hits and/or Vinahouse include Broma, Bootleg, and The Observatory in Saigon; and Cama ATK, Madake, and Rockstore in Hanoi. There are also small but growing communities comprised of lesser-known genres of music like DubStep and Drum and Bass (DnB). For example, Saigon Beats and Heart Beat Saigon are two organizations comprised of music enthusiasts who passionately promote new and different kinds of music and sounds in Saigon.

For live music, there are a number of options for covers and original performances. For example, bar chain Seventeen Saloon (present in Hanoi and Saigon) features live music (mostly rock) on a regular basis. And original acts such as Mai Khoi take the audience on a wild, sensual, and bilingual journey that pushes boundaries in what is perhaps one of the best live performances in Southeast Asia.

In terms of larger events, full blown music festivals such as RockStorm (a rock festival, as the name implies) and the HEC KPOP festival can appease fans of those genres–or headliners can opt for music venues such as Cargo in Saigon and Hanoi Rock City in Hanoi.

Vibration Festival: 24 Hours of Good Vibes

Interestingly, a growing trend in Vietnam is that of the “micro” festival whereby events are organized and operated in a gray legal area and the events lends itself to be more of an infusion of creative expression rather than cranking out popular hits while patrons in the VIP section post real-time photos on Facebook. Names like Eden, Quest Festival, Halloween Escape, Hanoi Sound Stuff, and A Dose of Escape all conjure up images of partying, dancing, and good times.

[Update August, 2015: Quest Festival V will be held in November, 2015.]

One such event was the Vibration Festival, which we attended last weekend. The festival was located about 10 kilometers outside of Hanoi at the nearby Minh Hai resort. The event started at 2:00 PM but we arrived around 9:00 PM and stayed until about 1:30 AM. By the time we arrived the bia hoi (literally, “fresh beer”) had run out so only shots were available at the bar. Our tickets were 100,000 VND (approximately $5) each but were double the price at the door for those who didn’t buy tickets in advance. Approximately 10 DJs were on the lineup with each playing a variation of some genre or sub-genre of electronic music. It was hot but the mood was pretty festive especially after midnight. The food was provided by a local company, Highway 4, and appeared to be almost artisan in presentation.

Americans, Canadians, French, British, and, of course, Vietnamese (plus other nationalities) were dancing under a full moon partially obscured by rolling clouds. By 10:30 PM the dance floor was full with a crowd that seemed to be about 85-90% westerners. Organizers estimated that around 300 people attended the event.

We had the opportunity to speak with the main organizer, an Irishman who goes by the moniker Bad GraFX. Like many expats, he now does something totally different than what he originally came to do in Vietnam. He started organizing events like Vibration Festival in order to have a good time and to be able to listen to the kind of music he and his friends wanted to hear.

The overall atmosphere at Minh Hai resort was relaxed and the heat didn’t seem to take the wind out of the sails for most people. Still, 24 hours of partying is intense, especially in the hot summer sun so it will be interesting to see the second iteration of the Vibration Festival and its changes, if any.

Music “And More” Festivals

Some people might not like mainstream musical acts as part of the western export “package” to developing countries because it overshadows local and independent artists. But getting globally recognized talent to perform in Hanoi or Saigon also raises Vietnam’s profile as a growing destination for international music genres and its fans–and it also potentially introduces locals and expats to new kinds of music. One thing is certain: these commercial headliners, micro festivals, and branded events will continue to shape Vietnam’s music scene as artists, musicians, and enthusiasts seek outlets for creative expression here in Vietnam.

We would love to see a major electronic music festival with global and local names playing across different stages. Perhaps this vision could be realized in Da Nang due to the international airport and accessible coastline. Beautiful Hoi An is nearby which could also benefit from the overflow of a festival. And there is even space for such an event, in the former American airbase. Before that can happen, perhaps the next step in Vietnam’s evolving music scene is to combine music with film or interactive tech a la SXSW, MOSO, or Incubate (albeit on a smaller scale) whereby the music, art, entrepreneur, and tech communities can meet and merge to share views and exchange ideas. For sure, a Vietnamese mash up of those domains would be raw, unpredictable in its specific outcomes, and overwhelmingly positive in its products.

Setting up for a marketing event in District 1.

Hanoi and Ho Chi Minh City (Saigon)

/1 Comment/in /by

Like many countries, Vietnam has experienced stark and monumental changes: periods of colonization, expansion, and more recently, independence and renovation (doi moi). However, throughout its history there has been a general flow of people from the original northern areas near China to the southern Mekong delta. These migration patterns have helped shape regional (north, central, south) and cultural identities on national, provincial, and municipal levels. Today, these differences are worth noting because they should influence effective communication in different parts of this heterogeneous country. Hanoi and Ho Chi Minh City are just two metropolitan areas that differ in Vietnam so if you spend some time here then you will learn just how varied it can be.

Enough Vietnamese settlers traveled south to modern day Ho Chi Minh City (which was then part of Cambodia and known as Prey Nokor) that it eventually became part of Vietnam in the 17th century. Even after the war between the north and south ended in 1975, many Northerners traveled south to seek better economic conditions since the north was still largely war torn and the south was in better condition due to American investments (prior to the renaming of Saigon to Ho Chi Minh City which both names are used interchangeably today). And even today, some young Hanoians choose to go to HCMC in search of a career after graduating from university for a variety of reasons (more opportunities, more independence from family, a change of scenery, etc.).

So how have these trends impacted the Saigonese mentality? Well, Saigonese are known to be more entrepreneurial and are known as risk takers (after all, it’s risky to become a settler in search of a better life in a different place than “home”) compared to their Hanoian counterparts. Perhaps in part due to western (French and then American) business influence in the 20th century, there is generally better customer service in HCMC than in Hanoi. In fact, wait staff may be openly hostile toward customers in Hanoi, or at least slow to respond to customers’ needs. As a result, things move faster in Saigon than in Hanoi—at least on the surface.

In terms of business, there are smaller deals in Saigon but they are more certain and quicker to be completed. In Hanoi the focus is on larger deals but there may be more uncertainty even after the deal has been signed. Why? In general, Saigonese are spenders and Hanoians are savers. If you were to find five customers in Hanoi, then you would be able to find ten customers in Saigon for the same product/service. Saigon is definitely the economic center of the country; most multi-national corporations are set up in Saigon unless they need regular contact with government liaisons at various ministries.

So while Saigon is the economic center, Hanoi is the political and cultural capital which is a reason why Hanoians are reputed to make better managers than their more market-oriented Saigonese countrymen. Hanoians are also more pensive in terms of diving below the surface of situations, meanings, and intentions—but they can also be more abrupt in a way that might be interpreted as rude. The interesting (and misinformed) advice regularly given out in Saigon is to never do business with Hanoians because they will cheat their partners at the first chance. The people in Saigon who freely give out this advice are usually Saigonese who rarely visit Hanoi or foreigners who are repeating what their Saigonese friends told them.  While it is true that Saigonese are initially more open and friendlier than those in the north, Hanoians open up once a relationship has been established.

In terms of the atmospheres between the two cities, Saigon has quite an open layout with wide boulevards–but there is a lot of traffic and rush hour can be a nightmare, especially if caught in a storm on a motorbike. There seems to be just as much traffic in Hanoi but the streets are much narrower than in Saigon—perhaps half as wide, just as chaotic, and even smoggier than Saigon. However, there are more lakes and green space in Hanoi so the city feels “greener” than Saigon, which also has a river (with the same name) that runs through it like in Hanoi (Red River).

In terms of nightlife, everything is more opulent in the south and more reserved in the north. It’s safe to say that nightlife in Saigon and Hanoi are completely different; in Saigon some venues are open until sunrise and beyond. In Hanoi most places shut down at midnight as the police make their rounds. At sunset the Saigon skyline is colorful with light displays on buildings which are mostly situated in District 1. As a side note, the first (Keangnam) and third (Lotte Center) tallest buildings are in Hanoi with the second-tallest in Saigon (Bitexco).

On the street level, there is a more European feel in Hanoi–perhaps because of the historical relationship and student exchanges Hanoi has had with Moscow and other European capitals; after reunification it was not uncommon for Vietnamese to go abroad to study in countries such as Poland, former Czechoslovakia, former Soviet Union, and France (even before reunification due to colonial influence).

The European influence seems to extend to dress in Hanoi where its citizens tend to dress up more than the casual and laidback Saigonese. They certainly have the opportunity to wear layers during the winter when it can get quite cold—and most of the traditional buildings in Hanoi are not heated. Winter in Saigon is pretty mild, even at night. Even though Hanoians are more formal in their dress, Saigonese are flashier when it comes to material possessions such as luxury vehicles and jewelry.

Some people would say that, overall, Saigon is more suitable for westerners and both cities seem to attract different kinds of expats to each—for better or worse.  To truly understand Vietnam, one must spend time in more than one city because Vietnam is so different depending on the city or region. Some differences between the cities (and other places) may be immediately obvious, but others will take time to discern especially to a newcomer.

Northerners and southerners (and others) are able to tell one another apart pretty easily in conversations. One way to determine whether someone is from the north or south is by their accent. The northerners have a heavy emphasis on the “z” sound, even pronouncing the letter “r” as a “z” and the southerners prefer the “y” sound. Throughout Vietnam there are several major accents so it’s not just a “north” and “south” dichotomy—it’s just that those are the most apparent differences within the country since most foreigners in Vietnam visit either city.

The central and other areas (highlands, coast, etc.) all have their own distinct flavors and unique qualities. After all, there are more than 50 different ethnic groups in Vietnam. Despite the differences throughout the country, Vietnamese are more similar than they are different: they are all incredibly patriotic, they have a strong sense of family (certainly more than in the west), and if you establish and keep a good relationship with a Vietnamese person then it has the potential to last for a lifetime. Above all, not every person you encounter will be representative of the generalizations (and stereotypes) of their background—there are good and bad people everywhere—so an open mind, tacit knowledge, and a contextual awareness of every situation is vital. After all, it could be the only way to truly experience and embrace Vietnam and any opportunities that might unexpectedly come your way in this surprising country.