Days 18, 19, & 20: A land of great contradiction

We’ve had quite an eventful time in Vietnam and I couldn’t be more excited to share it with you:

Monday began with a panel discussion with four panelists, a US Consulate worker who helps facilitate American Business in Ho Chi Minh, an executive from Citibank Vietnam, a manager from Ernst and Young Vietnam, and the CFO of the Mesa Group.  As I’m sure all of you are familiar with the US Consulate, Citi, and E&Y, I will take a minute to explain the Mesa Group.  The Mesa Group is a major distributor in Vietnam.  In fact, they are the primary distributor of P&G products in Vietnam.  This is significant because, like Indonesia, hard infrastructure is pretty poor in Vietnam, especially rural Vietnam.  The Mesa Group has successfully built a strong and extensive distribution network.  As the CFO explained to us, because of the strength of this distribution network, they are able to greatly diversify their businesses into other seemingly unrelated fields like real estate.  This morning was truly interesting because we were able to get a broad sense of US relationships with Vietnam, Multinational activity in Vietnam, the spirit of the Vietnamese people, and the challenges Vietnam is currently facing.  Here are some highlights from that morning:

When the Vietnam war ended in 1975, half of the population wasn't alive.  Today, Vietnam has about 86 million people and over half of the population is under 30.  Vietnam began Doi Moi, reintegration with the world, in 1986 and restored relations with the US in 1995.  Since then, Vietnam has had great success in increasing GDP per capita and reducing the poverty rate.  We learned that despite this phenomenal growth, like Indonesia, Vietnam has really struggled with things like human capital and infrastructure.  They also have serious challenges with inflation, corruption, bureaucracy, and protecting the environment.  We also learned that the Vietnamese economy is driven by domestic consumption and that they have a trade deficit.  Vietnam also has an underdeveloped banking sector because of deep mistrust of the banking sector and high levels of inflation that have led Vietnam to be a mainly cash or gold based economy.  However, we did learn that despite these challenges, Vietnamese people have an incredible optimism and a huge entrepreneurial spirit.

That afternoon, we took a short bus ride to a relatively new district of the city where Vinamilk has its headquarters.  Vinamilk is a state owned enterprise that collects, packages, markets, and distributes milk and other dairy products.  Vinamilk has experienced incredible growth over the past few years as Vietnamese people have enjoyed higher levels of wealth.  Vinamilk was interesting because it is a publicly traded but state owned enterprise that is well managed, agile, and a market leader.  We also learned about how Vinamilk has to educate its consumers about the benefits of milk and how their greatest risk is the quality of their milk.  Another interesting fact: Vietnamese dairy farming doesn't produce enough milk to satisfy domestic demand so Vinamilk has to source quite a bit of milk from Australia. 

That evening, we got in taxis to take a short ride to the Temple Club, a restaurant and bar owned by the president of the UVa Club of Vietnam. A group of seven of us girls managed to get lost between paying for our taxi and walking the supposedly short distance to our short distance.   We wandered the streets for a few minutes asking everyone where the Temple Club was.  We got sent in three separate directions and eventually went into a cafe to ask some people enjoying coffee to help us.  When we finally figured out where we were supposed to be, we realized we had been right next to it but missed the sign.  We had a good laugh and took a picture for good measure.  The night ended up being a ton of fun as we visited with friends of UVa and enjoyed some drinks and hors d'ouevres but I've never wanted my smart phone more than at that minute.  Here is the fated doorway:

On Tuesday, we started our day off with a two hour bus ride to the only deep sea port in Vietnam, Cai Mep.  The bus ride was long and incredibly bumpy.  Apparently, the government has been promising to pave the road for several years but it remains unpaved.  We had a short presentation where we learned about how Cai Mep was started to reduce shipping costs for companies operating in Vietnam because it can eliminate the need to go to a transshipment port like Singapore or Hong Kong.  This particular port is especially important because it is a deep sea port which is necessary to accommodate huge ships.  We also learned that it is incredibly expensive to transport goods within Vietnam.  We also learned that Walmart, Target, Lowes, Home Depot, JC Penny, Kohl's and Sears account for 1/2 of the retail shipping volume in the world.  Here's a picture of the port:

Next, we went to Johnson Wood, a furniture manufacturer who supplies furniture for Pier 1 Imports.  It was unreal.  We watched the production line from lumber to packaging.  We walked through what felt like miles of warehouses and production facility floors. There were hundreds of workers who were doing everything from shaping table legs to painting drawers.  I kept thinking of how much Dad and Glenn would both find it so interesting.  Here is one of the production lines in the painting stage and below that, a box to be shipped to Pier 1:

Tuesday evening we had the special treat of having dinner on a river cruise down the Saigon River.  This dinner was graciously hosted by Pier 1 and involved a five course traditional Vietnamese meal and musical and dance performers.  We had a ball! Our friend, Steve, sat down with the band and played one of their traditional Vietnamese instruments to much applause.  I joined in by clinking together two porcelain tea cups together.  It made a truly lovely sound...I'll be sure to demonstrate when I return home! Here is what the boat looked like and below is a picture of me and Rebecca (my roommate for this leg) on the deck as we sailed down the river and watched the sunset:

On Wednesday morning, we walked a couple blocks to P&G Vietnam's headquarters.  We met with Michelle Le, the CFO.  This was a really great meeting because we were able to learn so much about P&G's country subsidiaries and how they operate for our project.  We also learned about the differences between north and south Vietnamese consumers.  We also learned how hard it is to penetrate these markets and how key good distribution networks are.  Another interesting fact about Vietnam is that the Vietnamese government banned facebook here but Vietnamese people still use facebook and have found ways to get around the internet blocks.  Finally, something I think everyone will find very interesting is that women have an incredibly important role in Vietnam.  There are a tremendous amount of women in positions of power within corporations and when we ask Vietnamese businessmen and women about this they say that women are "more prudent" and "more hardworking".  Ms. Le told us that it is common to see men lounging about while women bring home the bacon.  What is further interesting is that Vietnam has really traditional family values and roles so these women are running companies and then going home to cook and clean.  It's pretty empowering and impressive.  

A group of us went to lunch at a restaurant the hotel recommended.  There, we watched the servers deliver rice to the tables by smashing a clay pot and then throwing the rice that had been inside the clay pot across the room into our bowls.  It was wild.  After this, we walked to the War Remnants Museum.  This museum houses many war artifacts and exhibits.  It was brutal; I was literally sick to my stomach because the pictures and exhibits are gruesome.  Beyond the sobering experience of the devastation of war, the museum was really interesting because it is so biased.  It is a beautiful example of how history is written by the victors.  The museum calls the war the war of American aggression.  The museum focuses on the war crimes and atrocities of the American soldiers and government and even calls it genocide.  While we don’t paint a rosy picture of the Vietnam War in the US, we certainly don’t view it this way.  In light of how many Vietnamese people see the Vietnam War, I am amazed by how they welcome American tourists, businesses, and brands.   

That evening we had a visit from a local Vietnamese fast moving consumer goods company, International Consumer Products, ICP.  ICP was founded in 1991 and has rapidly grown into a competitive company.  Most of this growth can be attributed to the men's shampoo XMen.  ICP found a blue ocean in men's shampoo where they could market an aspirational masculine brand to men who were using women's or generic shampoos.  We learned all about the company's story and the success of their brands, especially XMen.  It is interesting to know that ICP markets its products as international products because Vietnamese consumers trust and like European and American brands much more than local ones.  We had so much fun watching the XMen commercials and learning all about ICP.  

More to come soon!
Thanks for reading,
Love,
Maddy