Color, light, fragrance, sound – this is Saigon, the center of Ho Chi Minh City, Vietnam – where futuristic malls offering Gucci, Burberry and Bulgari are surrounded by swarms of young people on scooters and sidewalks filled with traditional food stalls. It’s a feast for the senses.
While Hanoi is the seat of government, a serious town, Saigon steams with sensuous sights and sounds. Per capita income is double that of Hanoi’s. Young people fill the cafés, restaurants and bars. Zooming around town on motorbikes, they’re buying expensive products from all over the globe in sparkling new shopping malls that seem to be going in everywhere. Longchamp, Prada, Apple, Chanel? They’re here, and hopping.
A new development called Crescent Mall looks like a futuristic version of Miami. Outdoor cafés line the broad streets, shiny towers in the area offer housing at fairly reasonable rates (two-bedroom apartments start at $600), and a newly-built international school offers excellent facilities and strong academics.
Saigon’s new developments, some filled with space and light as if built by I.M. Pei, make you feel like the future can be seen right now.
Income here has quadrupled in the last 15 years. The desire for convenience is becoming a key trend. Of eight million city dwellers, 95% eat out weekly, 63% view fast food as a top choice, and 49% prefer western fast food, according to consumer research firm TNS. “You do the math,” says TNS Managing Director Ralf Matthaes.
Vietnam does have challenges. Inflation is a worrisome 18-20 percent. The hot real estate markets in both Hanoi and Ho Chi Minh City became speculators’ bubbles, which then burst. This very young society of 88 million (60 percent under 35) has not built the social institutions typically found in the West – a safety net including medical care and social security for the aging, affordable housing, a strong educational system, adequate banking regulations.
But Vietnam’s challenges offer a great opportunity for American franchising, which can provide medical and in-home care services, educational programs, and safe and enjoyable dining options to meet Vietnam’s voracious appetite for U.S. brands – just to start.
Fred LeFranc of Results Thru Strategy, a consulting firm, says Vietnam offers not just opportunity, but strong demand. “It’s not just our products they want, but our management style and the American way of doing business,” said LeFranc, currently advising Which Wich Superior Sandwiches, a health-oriented 150-unit fast casual concept which is launching its international expansion in India and Southeast Asia.
LeFranc said members of Saigon’s sophisticated business class have the resources and experience to provide the kind of partners U.S. brands need. Hanoi is not far behind.
At the Hard Rock Café Sunday night, a young Vietnamese band played the latest covers from The Script and Michael Bublé. Then the band brought the mostly young and Vietnamese audience to its feet with a rollicking rendition of Sweet Home Alabama.
With its supersonic and steady economic growth, Vietnam will attract forward-thinking U.S. franchisors whose success may inspire a new song: Sweet Home Saigon.
Posted by Beth Solomon, IFA Vice President of Strategic Initiatives & Industry Relations