Saturday, June 11, 2016

Western Companies in Vietnam

As a sip on my coffee watching all the mopeds go by in a constant frenzy, I see a lot of western companies trying to expand into Vietnam. The most obvious are the fast food restaurants. Burger King, KFC, Pizza Hut, McDonald's and even Starbucks. Since I own shares in YUM and MCD, it's good to see companies trying to grow and expand. If the companies are successful, we'll see growth in the Revenues and Earnings which eventually equates to increases dividends (at least for my strategy). But as I look further, I see the presence of more companies - Cisco routers used in hotels,

Apple phones, and even Ericsson equipment based on the antennas and their 3G RRU. (Experience from a previous life). By the way, the coffee is really good here but the like-ability of western products give Starbucks an advantage. The same can be said for the fast food restaurants.
Roaming through the isles of the grocery stores, I see products that ABT (Ensure), JNJ, UL and P&G are well represented. However, the western industry hasn't fared so well in Vietnam in some industries. I haven't seen a Ford, GM car anywhere. This market is dominated mostly by Honda and Toyota. Mostly, mopeds though. Korean cars are popular.
The most striking thing though is the number of individual Mom&Pop store fronts at the ground floor of the 3-5 stories buildings that line the streets of Saigon. Here, it seems in order to succeed, you need to be your own boss. Having travelled to Hong Kong and other parts of Asia, this is a recurring theme. I think this is the main route to middle class here. Everyone else is working class (with the exception of the 0.01% wealthy class). The work can be brutal. They definitely don't have policies in terms of minimum wage. No protection. Either you work or you don't get paid. And what you get paid is not much. This is how it goes.


Disclosure: long MCD, YUM, PG, UL, ABT


  1. The companies you mention are so successful, because they are global companies. They are not just American any more, they are everywhere - which has its positives and complexities :)

    I hope you're eating some Vietnam food too lol


    1. Yes. It's difficult to enter into countries and make it successful. Kudos to them.
      My wife and I have been pigging ourselves on the Vietnamese and local cuisines. It's my son who is still 'Americanized'. But it was good to observe these companies from a different perspective.