~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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Vietnam consumer boom ignites advertising

HO CHI MINH CITY - Perhaps it's the aroma, but when the baker's ovens open at Vietnam's first hypermarket, chaos reigns as people push and shove to lay their hands on French-style baguettes and other loaves.

Jean-Pierre Germain, director of the Cora Bien Hoa hypermarket some 30 km (20 miles) from Ho Chi Minh City, said 8,000 baguettes were sold each day while the in-house bakery operated around-the-clock to try to meet demand. Fresh-baked baguettes are the hottest sellers in the hypermarket, but it will take more than a loaf of bread to satisfy Vietnam's growing appetite for consumer goods.

After decades of dour communist control in Vietnam, growing market liberalisation and personal wealth has for the first time given consumers choice -- and advertising has been key.

In the three months since Cora opened in a blaze of publicity, up to 50,000 farmers and factory workers surge through its doors each Sunday and 15,000 on other days to buy anything from washing machines to shoes.

``Consumers have been dreaming of this... They have money to buy, they buy and they like to buy,'' said Rene-Charies Dalac, Cora's director of non-food products.

CONSUMERS TAKE INITIATIVE

Neon and painted hoardings have sprouted throughout the country urging consumers to buy the latest products, while the old party propaganda billboards extolling workers to greater achievements have been increasingly overshadowed.

Adverts for consumer products manufactured by such multinationals as Procter & Gamble and Unilever are common, while Coca-Cola and Pepsi have been fighting out the cola wars since the United States lifted its trade embargo against Hanoi in 1994. State television stations devote more time to commercials, which have become increasingly sophisticated. The emphasis is now shifting to Vietnamese themes from ads that had been produced for other Asian or Western markets.

But a lack of production facilities and expertise in Vietnam means film locations such as Sydney are popular due to the city's large overseas Vietnamese community.

Even the Communist Party mouthpiece, the daily Nhan Dan (People), now runs ads and recently featured a full page touting the ``Amazing Thailand'' tourism campaign.

Market research firm ACNielsen estimates total advertising spending in Vietnam will hit some $100 million this year, against $111 million in 1997. Executives said this reflected a slowing economy but predicted the industry would soon recover.

``Vietnamese consumers are incredibly receptive to advertising,'' said a foreign advertising executive. ``There's no doubt that there's a direct link between adverts and sales.''

The first Vietnamese advertising agencies were formed in 1989 and were soon followed by international firms looking to support their global clients as they pushed into Vietnam.

Ingrained political mistrust of consumerism has seen foreign ad agencies tolerated but not encouraged. With the exception of U.S.-based Leo Burnett Co, which has a trial contract, agencies are technically barred from doing business but can open representative offices.

``We're with karaoke bars and discotheques -- socially unacceptable. Advertising (to the Communist Party) is still a sensitive issue,'' said the advertising executive.

But major foreign agencies have played a leading role in shaping consumer tastes and trends, although contracts and payments have to be conducted offshore.

Risks are high and most agencies have been subjected to surprise inspections on alleged illegal business activities. In April, about 20 uniformed police burst into the Ho Chi Minh City offices of Bates Worldwide. For weeks, some staff members were subjected to lengthy questioning.

``We're in limbo. If we can carry on and do the best we can to keep our clients happy, then fine,'' the ad executive said. Like all foreign ad executives, he declined to be identified.

CREATIVE BUZZ

The executive's office was typical of international advertising agencies -- couriers dashed in to deliver artwork, staff bustled and telephones rang endlessly.

Rock music blared from one room while two creative staff -- one Vietnamese, the other Western -- discussed whether the song would be sexy and emotive enough for a planned ad campaign.

``We have some great Vietnamese talent that maybe in five years will be leading the industry,'' the executive said. ``Basically we are developing the next generation of local talent.'' But tight censorship called for a sensitive approach.

``Here in Ho Chi Minh City there are bar girls, hookers and wild living, but the average person is very conservative so ads cannot be overtly sexy,'' the executive said.

Nguyen Quy Cap, director of state-owned Youth Advertising Co, one of the Vietnam's first ad agencies, said a small market, home to 16 foreign agencies, posed a threat to local outfits.

``If the government takes no measures to protect us we will be very affected by international agencies,'' he said, adding that local agencies could not meet the high international standards at foreign outfits.

Due to the ban on direct business, foreign agencies place media buying through their local counterparts.

``The fact is some foreign agencies...pay about 1-2 percent commission to the local agency,'' said Cap. ``This is cheating. Most of the work is done outside (Vietnam) and...this is unreasonable because it does nothing good to the industry.''

Reuters - December 06, 1998.