Vietnam's new generation of golfers lures Carlsberg, Thai Air
Vu Hoai Lam skids to a halt in his silver BMW Z4 sports car, pulls a golf bag from the trunk and takes a two-minute boat ride across Dong Mo Lake to the Kings' Island Golf club outside Hanoi, the capital of communist Vietnam. ``I like the philosophy of golf and the exercise,'' says Vu, the 30-year-old editor of Business Magazine, a Vietnamese-language biweekly that will start publishing in January. ``It also helps build bridges in business.'' Vu took up golf four months ago at Kings' Island, where a membership costs $22,500.
Companies such as Carlsberg A/S, the world's fifth-largest brewer, are using golf's growing popularity to market their products in East Asia's second-fastest-growing economy after China. Copenhagen-based Carlsberg spent about $600,000 to sponsor this month's Carlsberg Masters Vietnam, the nation's third-ever professional golf tournament and its first since 1997. ``It's a rapidly growing sport,'' said Henrik Andersen, 37, Carlsberg's general director in Vietnam. ``There's been quite strong growth in purchasing power, especially in the cities but also in some of the provinces. People are getting more money and spending more on premium products.'' Carlsberg's sales in Vietnam have grown an average 20 percent for the past three years, double the rate for the country's overall beer market, Andersen said in an interview in Hanoi, without giving details. The company spent at the ``lower end'' of the $600,000 to $3.5 million required to be lead sponsor of an Asian golf tour event, he said.
More Courses Planned
Vietnam, which fell under communist rule when the Vietnam War ended in 1975, had no golf courses in operation a decade ago and now has 10. Nine are under construction and another eight are planned, according to the Ministry of Planning and Investment. The market is still tiny: Andersen estimates that 3,000 to 4,000 of Vietnam's 81 million people now play golf, up from fewer than 100 three years ago. Jeff Puchalski, an American who runs two golf clubs in southern Vietnam, estimates the number of players at about 1,000.
Vietnam's economy grew 7.2 percent in 2003 as industry and construction expanded 10 percent and exports surged 19 percent, according to government reports. That growth rate was second only to China's 9.1 percent among 11 East and Southeast Asian economies tracked by Bloomberg. Consumer spending is growing along with the economy, said John Shrimpton, a director of Dragon Capital in Ho Chi Minh City, which manages two Dublin-listed funds with $190 million invested in Vietnam.
Rising Incomes
``There has been a virtual doubling of per-capita income over the last 10 years and strong growth in high-end retailing,'' said Shrimpton, who forecasts growth of 7.7 percent this year. ``It's inevitable that Vietnam's gross domestic product per capita will approach that of the other major Southeast Asian countries, and probably even exceed a number of them.''
In the four years to 2003, Vietnam's average annual income rose 23 percent to $455, according to the Asian Development Bank. Car sales have jumped more than sevenfold since 1998, rising 59 percent last year to 42,557 units, according to the Vietnam automakers' association, whose members include local partners of Toyota Motor Corp., Ford Motor Co. and Bayerische Motoren Werke AG. Golf will gain more followers as Vietnamese have more cash to spend, Puchalski said.
``There's been a big surge in disposable income so we're targeting those people as the next generation of golfers,'' said Puchalski, 38, who moved to Vietnam in 1996 to run the Dalat Palace Golf Club in the southern highlands. The course was built in 1922 by Vietnam's last emperor, Bao Dai, and reopened a decade ago after 18 years of disuse.
Rice Paddies
The four-day Carlsberg Masters, held at the year-old Chi Linh Star Golf and Country Club outside Hanoi, was Vietnam's first professional event since the Asian financial crisis cut economic growth by almost half between 1997 and 1999. The 90-minute drive from Hanoi to Chi Linh Star passes through rice paddies dotted with water buffalo. The club, where Vietnam's red flag with a yellow star flies out front, has a circular clubhouse with floor-to-ceiling windows perched on a hilltop overlooking the course.
The event drew spectators such as Deputy Prime Minister Vu Khoan -- who signaled the ceremonial opening of the four-day event with a left-handed drive -- and professional golfers including Corey Pavin, the 1995 U.S. Open winner. ``Golf was introduced not long ago, and us just playing here shows how far it's gone already,'' said Pavin, 44, who finished the event in third place. He was flanked by a Vietnamese female caddie wearing a cone-shaped straw hat and 18-year-old Nguyen Thai Duong, one of seven Vietnamese competing in the tournament.
Daewoo, Thai Air
Other sponsors included GM Daewoo Auto & Technology Co., the South Korean carmaker that's 42 percent-owned by General Motors Corp.; Hilton Hotels Corp., the No. 3 U.S. hotel company; and Thai Airways International Pcl, Thailand's biggest airline. ``This is a good chance for us to build brand awareness,'' said Nond Kalinta, Thai Airways' general manager in Vietnam. ``It will take time for golf to grow but there is potential.'' The airline added a second daily Hanoi-Bangkok flight this year after the number of passengers flying from Vietnam to Thailand rose by 50 percent in 2003, Nond said.
Golf is expanding with government help in a nation that first allowed private enterprise 18 years ago. Kings' Island is jointly owned by the Ha Tay provincial government and a local investor, said Robert Bicknell, 46, the club's American director of golf. The club, 45 kilometers (28 miles) west of Hanoi, was built in 1994 to cater to Japanese and South Korean tourists and expatriates and now has 15 percent local membership, Bicknell said. A second course will open there early next year.
`Courses Are Overloaded'
The Tam Dao Joint-Stock Investment Company, of which government housing and construction corporations own 80 percent and local investors own the rest, is spending $12 million on an 18- hole course due to open next year 65 kilometers from Hanoi, said Dinh Nho Hung, the company's deputy general director. The company plans to invest another $18 million in an amusement park, conference hall and 280 villas in the same complex, he said. ``Many golf courses are overloaded now,'' Hung said in a phone interview. ``Golf used to be just for the rich. Now the middle classes can play it, too.'' International investors in Vietnam's golf courses include Larry Hillblom Jr., son of the co-founder of DHL Worldwide Express, who has a share in Dalat Palace, according to Puchalski. South Korea's Charm Vit Group and Hong Kong's Li Lai company are developing courses in northern Vietnam, Vietnam Investment Review, a state-run English weekly, reported earlier this year.
$1,450 Golf Clubs
The Hanoi Towers mall in the capital's downtown caters to a growing class of Vietnamese with cash to spend on luxury goods -- including golf gear. At the Zone Golf store, set amid shops selling Omega watches and Guylian Belgian chocolates, golfers can buy a set of Callaway Golf Co.'s Big Bertha titanium irons with graphite shafts for $1,450, more than three times Vietnam's average annual income.
A new $540 TaylorMade R7 driver made by Adidas-Salomon AG sold out within three months, said Hung Van Doan, a 39-year-old Vietnamese-American who works for JPMorgan Chase & Co. in Ho Chi Minh City and co-owns the six-month-old golf shop. ``It's not a market where you sell knockoffs or no-names,'' Hung said. ``When they buy, they go for brand. It's status.''
Bloomberg - November 16, 2004
|