Last week saw the invasion of Vietnam by WPP Group, with CEO Martin Sorrell leading the charge and taking Vietnam into its 2.0 phase, at least in terms of marketing and advertising as reported by the Telegraph in London.
"The world's second-biggest provider of marketing services by revenues is buying a 30 per cent shareholding in Vietnam Advertising Company, which is based in Ho Chi Minh City and is controlled by the Communist government."
And whilst this may not seem like a big deal in the rest of the world, it belies a larger strategy Sorrell has been executing globally by investing in emerging markets where growth rates are double-digitally wiping out anything that's happening currently in mature markets.
The wire service story, was picked up by the blog Vietnam Business Finance and reprinted exactly as it appeared in the Telegraph with the only omission being the word "Communist" as a descriptor for "government". I found it funny that the Communists edited out the word Communist in their story. Seems the editors understand it's not the most sales friendly term when you're busy attracting near to 20 billion a year in Foreign Direct Investment.
In another story on the same event, City A.M. cited the following:
"The predicted annual US growth rate for the sector is 4.8 per cent while Vietnam checks in at a mighty 29.3 per cent. Sir Martin Sorrell, boss of advertising giant WPP, must have had sight of a draft copy. As Pricewaterhouse-Coopers’s global study came out, WPP was buying a large chunk of three Vietnamese media companies."
Having lived in Korea and having formed my own advertising agency, the very first 100% foreign owned agency in Korea in 1997, I watched as Ogilvy became the second wholly owned foreign agency in a market where foreign companies held only 5% and saw WPP's share of Korea's now 8 billion dollar marketing pie rise, just as one company, to 50%. That's 4 billion of which Sir Martin now takes a chunk of – and know that he will do the same thing here.
And this IS good news. The local market is so full of non-transparent, corrupt and just plain childishly managed communications companies and associations, that having WPP come in to put some rules of order to the industry is a welcomed addition. It will help me and every real professional in country. Call 090-234-9570. I have operators standing by.
In a separate but related story, Silicon Valley has established a beachhead here in Ho Chi Minh City, the developing world's largest Internet market.
The San Jose Mercury News reports:
"Vietnam's plugged-in generation: Internet boom creates Little Silicon Valley"
"Investors and Internet giants eBay, Yahoo and even Google are taking notice of Asia's latest Internet boom. Some 20 million Vietnamese are now online - up from 500,000 eight years ago. IDG Ventures predicts as many as 36 million Vietnamese will be using the Internet in less than two years. Next year, Vietnam will begin to roll out WiMax, so DSL-quality Internet experience will increasingly be available across the country."
"Out of all the developing countries in the world, Vietnam has the highest Internet penetration," said Santa Cruz native Bryan Pelz, chief executive of VinaGame, the country's most popular online game. "One of the reasons for that is its young population. The median age is 24."
Somehow, between Sir Martin Sorrell, Bryan Pelz, General Ho Chi Minh and the Siliconmunists it seems that Vietnam is now "the place to be". A few months ago Hugh MacLeod of www.Gapingvoid.com mused to me that Vietnam was not a particularly brilliant place to be, but now, months on, I think it's more than fair to revisit that assessment and say that it may truly be a quite cool place to be. The 2.0 place to be.
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