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Are you expanding operations in Vietnam? Will you? As China’s demographic dividend is diminishing, and Vietnam’s consumer markets are rapidly growing, more and more multinational companies are making the move. Big brands are flooding into Vietnam as they did starting in the 1980s and 1990s in China. Last week, Mr Henry Nguyen, the founder of McDonald’s Vietnam, shared his perspectives on Vietnam in an interview with Bloomberg at the Bloomberg ASEAN Business Summit. Below is an edited transcript of the interview.Henry is a strong supporter of our GEMBA program, having hosted our visiting GEMBA classes (during our Theme 7 visit to ex China Asian countries) at his flagship Saigon McDonald’s for a few years now, sharing his thoughts on his personal entrepreneurship journey and the challenges and opportunities in Vietnam.
Bloomberg (BB): What makes investing in Vietnam so attractive?
Henry Nguyen (HN): Over the past three or four years, Vietnam has been a real star performer in terms of stability and predictability. A second reason is the obvious slowdown in China. A lot of manufactures have seen costs rise and talent acquisition increasingly difficult.
Manufacturers have been talking about the China plus one strategy for years, but we see it actually happening now. Vietnam has been a beneficiary, because of the country’s young and highly productive labor market, plus very low cost. But there’s also a lot more investment in the general consumer economy – infrastructure, real estate, all sorts of consumer based sectors, health care, and particularly media and technology.
BB: You basically brought McDonald's to Vietnam.
HN: The ultimate consumer brand!
BB: Last year, you opened your first branch, and now you have eight. How are they performing? How do consumers in Vietnam responding to a Western brand, especially an American brand?
HN: McDonald's in Vietnam is a very aspirational brand, appealing to an emerging middle class with increased spending power. We’ve always tried to position McDonald’s as a quintessential family restaurant, and also a place where young people can go and enjoy a ‘taste of the West’ or ‘taste of America’. We’ve always had high hopes and expectations, and we’ve been very happy – we’re exceeding our expectations in store counts and revenue. And we’re really excited about our plans for the future. Whether you look at McDonald’s by itself, or the entire consumer environment in Vietnam, the story is just beginning.
BB: You’re invested in every aspect in Vietnam, from consumer, to technology, to media. Where do you see the fastest growth and the potential?
HN: It’s hard to say – the rising tide of Vietnam is lifting all boats – we see such a plethora of opportunity in all sectors of Vietnam. Also, we see a tremendous amount of technology-driven change. The smartphone revolution is happening everywhere in the world, but it’s happening at a particularly fast pace in Vietnam, where you have a young consumer market that rapidly adopts the latest technology. Look at retail for example – in Vietnam you have traditional retailing that’s growing up right beside e-commerce. The dynamism and pace of change is phenomenal.
BB: A key turning point for Vietnam in the next few years will be trade agreements– in the AEAN community and more broadly. How will those affect the Vietnamese business environment?
HN: Vietnam is embarked on a strategy that began as much as two decades ago, working hard to be open and integrated into the global economic community. In last five years, we’ve seen a tremendous number of economic and trade agreements being developed or actually passed, whether within the ASEAN community or with the EU, and now most recently the ratification of TPP . . .
BB: Quite a surprise there
HN: I think for a lot of outsiders, surprising because of the stringent qualification requirements and also the policy changes that Vietnam will have to enact to integrate into the TPP. But I think these achievements speak to the efforts of the leadership, as they drive for economic liberalization and lowered trade barriers. In the long run, these developments will produce a definite net benefit for Vietnam.
USC-SJTU GEMBA’s Engagement with Global Business Leaders
GEMBA’s engagement with business leaders, whether in China or elsewhere on the Pacific Rim, is an integral part of the value of the program for our students and alumni. Our Theme 7 (of 10), Global Front-Line Perspectives, brings our students on a one-week visit to leading-edge business locations outside of China, meeting many top business and government leaders to understand how Asia-based companies globalize, and how Western companies excel in Asia. Locations to date: India, Japan, Korea and Southeast Asia.
In January, we’ll again introduce our Class XII to today’s business challenges and opportunities in China and Asia when we visit a leading multinational manufacturer, based in the Shanghai suburbs, to learn more about how they are strategically managing supply chain integration.
GEMBA XI and faculty leaders with Henry Nguyen, pioneer of McDonald’s Vietnam.
GEMBA 2016 StartsUSC-SJTU Global EMBA 2016 Recruitment Starts 交大—南加大全球EMBA招生季启动
The USC-SJTU Global EMBA Program in Shanghai has starting the recruitment for its thirteenth class (GEMBA XIII). Beginning in early May 2016, our GEMBA Class XIII is set to be as outstanding as all previous GEMBA classes, with global leaders from all over the world.
Interested? Contact us for more information or to arrange with our GEMBA Shanghai team or our students and alumni.
Take Your Next Step-Meet our GEMBA Shanghai team for a personal consultation
-Send us your resume
-Attend our information sessions
-Schedule a class visit
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