Interview
In conversation with a modern-day hero of Vietnam (part 2)
Future positive
Roll forward nearly four decades and Nguyen still sees his first and foremost role in business as contributing to his country. “I planned ten years... ten years... ten years... ten years already. Four lots of ten years, I’m not young, I’m 72,” he says with a broad smile, his infectious energy belying that statement.
“The first ten years we opened flights and we normalised relationships with the American government – that was my first step. Second step, I brought in the investors. We have brought in 47 joint ventures, worth around US$500 million and we have created about 25,000 jobs. I didn’t get involved in projects to make money immediately; instead, I was seeking to generate labour sustainability, create employment. That was the second ten years.
“For the third ten years, I tried to attract as many international well-known brands as possible because I knew that any country wanting to reach a high level in the world must have a tourist industry, there is no doubt about that.”
Vietnam was graced with magnificent natural wonders such as Ha Long Bay but it needed more than that to attract the kind of tourists who would spend significant money in the country. “Besides the attractions and the local products, they wanted to look for a Chanel bag, a Rolex watch, for Cartier items, Dolce & Gabbana, and so on. Duty free is an absolute red button for any country,” Nguyen comments.
His initial breakthrough came with three world-renowned brands, Ferragamo, Burberry and Bally. “They were the ones who opened up for me my fashion business – they gave me full support,” Nguyen recalls. Initially, other brands watched on before the initial trickle of partnerships became a flood. Big names such as Hermès, Chanel and Louis Vuitton followed.
Brands were given tender individual love and care when being introduced into Vietnam rather than being buried in a portfolio. Discounting was avoided and Nguyen ensured no fake product got anywhere inside his company, unlike a few companies within the country’s retail and distribution trade. To ensure appropriate positioning for each brand, he created dedicated divisions within the group, including luxury-focused DAFC (Rolex, Burberry, Cartier, Ferragamo, D&G and around 50 other front-line names) and ACFC & CMFC, which features mid-tier fashion brands from around the world.
State recognition: Johnathan Nguyen pictured in a celebratory shot with Vice President Vo Thi Anh Xuan, Chairwoman of the Vietnam Children’s Fund, after his special award
Today IPPG represents more than 108 brands, all carefully nurtured rather than being developed with any kind of quick-buck mentality. Others can enter the market and take shortcuts, Nguyen says, but his long-term approach ultimately pays off in respect from clients and consumers alike. “That’s why the brands keep coming to us,” he observes.
In wines and spirits, another strong suit, IPPG has a joint venture with Moët Hennessy, helping to build the French drinks powerhouse’s portfolio, spearheaded by Hennessy, into a dominant market position. Nguyen fondly recalls LVMH Chairman Bernard Arnault thanking him during a trip to Vietnam for his efforts in helping develop LVMH brands, including Moët Hennessy and DFS in the country.
“So, everything I do in Vietnam is about being patient, patient, and patient,” he says, repeating the words firmly to emphasise the critical principle. “Maintaining reputation and keeping all things transparent. So, the brands trust me just as the government trusted me from the beginning. I promised and I delivered.”
Up close with a living legend: Martin Moodie meets Johnathan Nguyen at IPP Group offices in Ho Chi Minh City
Local citizens queue up for their vaccination shots in Da Nang in August 2020. The high vaccination uptake has helped the country rebound quickly from the pandemic. {Photo: Shutterstock; Lusin Da Ra}
Rebounding from the COVID effect
Until early 2020, IPP Group was a runaway success story, a key accelerator of an economy that had moved into overdrive. And then the national engine was brought to a shuddering halt by the COVID-19 pandemic.
Despite a highly successful early response to the pandemic, the country reeled under a new, more serious outbreak from 2021, leading to what would in time become the highest number of confirmed cases in Southeast Asia, and the 13th highest in the world.
Today, though, Vietnam is bouncing back with remarkable speed and rigour. A new report from Standard Chartered posts a particularly rosy prospect of H2 economic recovery with forecast GDP growth of +10.8% and +3.9% year-on year in Q3 and Q4, meaning full-year growth should reach +6.7%.
Tourism is playing a critical role in that revival, with Vietnam News Agency reporting in late August that the sector had generated double-digit growth for four straight months. According to an economic growth forecast for East Asia and Pacific region published by the World Bank in late September, Vietnam’s economy leads the region with a growth rate of +7.2% this year.
The country attracted over 350,000 international visitors in July, triple the monthly average in H1, the report said, with numbers dominated by arrivals from South Korea, Europe and the US. When the Chinese visitors, who are crucial to Vietnam’s tourism sector, return – hopefully in early 2023 – that will be the start of Vietnam’s spectacular tourism growth, Nguyen reckons.
The past two years have been a brutal and prolonged crisis, but from something very bad something good has emerged, Nguyen says. “Now we have a chance to grow,” he comments. He draws an allusion with the country’s national soccer team, which enjoys huge nationwide support from some of the world’s most passionate fans.
From traditionally being a comparative minnow relative to the giants of the Asia game such as South Korea and Japan, Vietnam has grown dramatically in stature over the last few years, including attaining the top position in the joint World Cup/Asian Cup qualifying group in late 2019.
The country can excel in business just as in sport, Nguyen says. “I am so proud of them. So let’s not think about what we cannot do but what we can do. We are growing.”
He says that COVID has resulted in profound changes across Asia, with countries such as Japan and South Korea at various points “on oxygen” socially and economically. Vietnam was traumatised too, he says, but the country’s widespread embracing of a vaccination programme has enabled it to bounce back strongly.
As of 24 September, around 260.2 million doses had been given (equivalent to 253% of the population) across the country with an impressive 86.1% of people having received two doses and 67.4% three.
“With COVID we were hit badly, Vietnam was lying down in our hospital bed like the whole world,” Nguyen comments. “But with the government having successfully completed the vaccine mission, everyone here got vaccinated and we have been able to get up out of our bed and move. Now we need to have a strong body; we need to have strategic partners to develop the international finance centre; we also need to have IPP Air Cargo and related logistics professional hubs.
“We need these 45 projects worth hundreds of billions of US Dollars,” he adds, gesturing towards the files in front of us. Serious projects. Serious money.
(Continued on next page)
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The Moodie Davitt eZine Issue 316 | 31 October 2022
The Moodie Davitt eZine is published 14 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail kristyn@moodiedavittreport.com