It’s two o’clock on a rainy Sunday afternoon, and Jim and Kylie Cawood are getting ready for their monthly wine-tasting session. “Where are the bottles of Rocky Gully 2005?” Jim asks his staff. Kylie, a former chef, is adding the finishing touches to freshly baked bread sticks and loaves of ciabatta.
The Australian duo are the brains behind Vino, a two-year-old wine merchants located at the edge of the business centre in District 1, Ho Chi Minh City. “It took a while to get things organised. The first eight months were one step forward, two steps back,” says Jim. “We were constantly building relationships, and it takes a while to reach a critical mass of sales where you don’t have to be continually drawing out of your pocket. A lot of the businesses don’t think long-term.”
With a 15-year background in wine, but little knowledge on the business side of things, it was a big step to open their own wine business in a foreign country. They finally received a business licence, but not before encountering some problems. Jim explains: “Before you get your business licence, you have to find premises. Looking around for a site took a lot of time because there’s no way to ask someone where it is. Then, when you find it, you have talk to the landlord.”
In addition, the Cawoods had to build their reputation from scratch – through events such as monthly wine tastings and wine-appreciation courses – in a market where several regional heavyweights such as Celliers d’Asie were already present.
Things have improved since, and Vino is now one of the top wine distributors in southern Vietnam. Even better, it is seeing a slow but steady increase of local customers.
At the other end of the spectrum is Dominic Scriven, co-founder of Dragon Capital, one of Vietnam’s oldest and biggest asset management firms. Originally from Britain, Scriven has been in the country for 15 years, speaks fluent Vietnamese, and last year was awarded an OBE “for services to UK financial services in Vietnam”. He started Dragon Capital in 1994 with three other partners “to try to invest and learn” about the market. As luck would have it, their plan to raise US$5 million was so successful they received US$15 million.
Unfortunately, the Asian Crisis hit a few years later and the government devalued the currency, effectively wiping out a third of their clients’ money. Scriven remembers: “Among our clients was my mum, so I went through a period of uninspiring Christmas presents from her.”
The turnaround came with the beginning of the new millennium, and every year since 2001 has been better than the last, with 2006 topping the list. The company now has an asset base in excess of US$2 billion and, halfway into 2007, Scriven thinks the prospects are looking good.
Richard Burrage, founder of Customer Insights (now called Cimigo), a marketing and brand research company based in Ho Chi Minh City, agrees. “If you are a smart operator, in many industries you will grow exponentially – organically year on year for the following seven years,” he says.
When Burrage started the company a decade ago, it was a one-man band. He can now boast 120 full-time staff. He adds: “Until WTO, Vietnam was the best-kept secret in Asia [Vietnam became the 150th member of the World Trade Organisation in November 2006]. Now the secret is out.”
But it isn’t only the number-crunchers who are drawn to Ho Chi Minh City. The country’s famous embroidery and handicraft skills have attracted numerous designers. Charlie Rollo-Walker, a graduate of Saint Martins College of Art, first came here on a design project, fell in love with the country, and is now the proud owner of A Right Charlie, designing and producing special occasion wear (embroidered taffeta silk outfits which are ideal for Royal Ascot) which retails exclusively in the UK.
Valerie Gregori McKenzie is another designer who’s made Ho Chi Minh City her home. Her label, Song (meaning “life” in Vietnamese), offers eco-friendly lifestyle products based on tropical living. Her lamps, clothes, pillowcases and kitchenware can be found in five-star resorts in Vietnam and around the world. Passionate about preserving the skills, McKenzie says she and her team develop new methods of stitching and embroidery every year.
Such a proliferation of foreign-owned and foreign-backed businesses in Ho Chi Minh City is a big change from a decade ago. Private companies were only allowed in the 1990s and Anna Craven, consultant with law firm Freshfields Bruckhaus Deringer, says, the economy has since been “on the up and up”.
Craven owns Anna Craven, an export company selling upmarket Vietnamese arts and crafts in the UK (annacraven.co.uk), and Mekong Merchant, a furniture shop which has branched out into a popular restaurant.
The change is seen not only in the increase in the number of expatriates, but also in the rise of young, affluent and upwardly-mobile locals, who are now enjoying conspicuous consumption as much as the visitors. Major luxury brands such as Louis Vuitton, Gucci, Ferragamo and Vertu have already reached Dong Khoi, Ho Chi Minh City’s major shopping thoroughfare. More importantly for expatriates and business travellers, the appearance of quality restaurants, bars and spas has made Ho Chi Minh City a much more comfortable place to work and play.
New restaurant openings within the past year include the swanky Xu, offering modern Vietnamese cuisine; Pacharan, a four-storey tapas and bodega palace run by Nobu’s former manager; and beautifully decorated Middle Eastern eatery Warda, which has imported its head chef from Syria.
Looking for networking opportunities? Ben Winspear has managed the operations of the Al Fresco group since the late 1990s, including Jaspas, an upscale restaurant known for its regular wine evenings, and the most popular of all networking events, Spam Cham, organised with Vino. With a total of 19 restaurants in Vietnam – four in Ho Chi Minh City alone – Winspear says the company is “trying to find as many locations as possible at the moment”.
Many believe more changes are in store as a result of the WTO entry, and that such changes will ensure Vietnam’s continuous growth for at least the next five years. And with a growth rate of 11.2 per cent in the first half of this year – higher than the national rate of 7.87 per cent for the same period – it’s little wonder Ho Chi Minh City is generating a huge amount of interest both regionally and globally. The good news is that companies based in this city are gaining more respect, says Luc Lejeune, managing director of Noor, the local design firm behind Warda. The company found fame for decorating Mojo, Sheraton Saigon’s über-chic café, and recently signed its 100th project. Lejeune says: “Before, all the designs were done regionally. Now, we’re being approached directly from the headquarters. Large local companies have also started using us, and we see this as a next step, a more homogenous market between local and foreign projects. There are a lot of opportunities in Ho Chi Minh City. The population is young, hard-working and very hungry, and the country is very safe, stable and has lots of places to travel. All this make Vietnam very attractive.”
However, he also says it is becoming more and more difficult to retain talented staff. The shortage of available brain power because of the relatively inexperienced population is another worry, and despite the promised economic and administrative reforms that come with the accession of WTO, some areas are still no-go.
Craven says setting up certain businesses – retail and restaurant in particular – still requires a Vietnamese partner. Stories of eager foreign investors getting their fingers burnt are part of the local currency, and making sure you find a reliable, trustworthy local partner is of the utmost importance for any would-be entrepreneurs.
However, with some patience, a realistic mindset and a long-term vision, Ho Chi Minh City is a hotbed of opportunities, whether you’re looking at setting up your own business or taking a posting with the ever-expanding list of multinationals who are now making their way to the city.
Al Fresco’s Winspear says: “Don’t come to Vietnam with your old rules. It’s a whole new ball game. The most important thing is to do your homework and learn the lie of the land.” Cawood from Vino agrees: “At some point you have to focus your business towards the Vietnamese, and part of that is understanding the Vietnamese culture. The amount of paperwork is at times daunting, and just because something works in Asia doesn’t mean it’s going to work here. But the good thing is that once the ball is rolling, it keeps rolling.”
However, the idea that Vietnam needs to step up the pace of change is misguided, says Scriven. “There’s a certain point of view that says things are going too slowly and that Vietnam needs to accelerate this and that. I don’t think I could possibly go faster than I already am.”
He adds: “You need to think long-term. People confuse underdevelopment with a quick buck. That’s a misnomer. How can you make a fortune in a really poor country? There’s a wonderful future ahead for Vietnam. The opportunity for people who are here, and who want to be here, is to become part of the process. But it requires giving to it in order to benefit from it.”
Useful contacts
British Business Group Vietnam bbgv.org
Vietnam Tourism vietnam-tourism.com
VietNamNet Bridge English Newspaper english.vietnamnet.vn
Intellasia News Online intellasia.com
Getting there
LONDON–HO CHI MINH CITY
No direct flights from the UK. Return fares from Heathrow with Thai Airways (thaiair.com) cost £732 for economy, £2,164 for business and £8,904 for first class. Other connections are available with Air France, Cathay Pacific, Malaysian Airlines and SIA.
