By Published on .

U.S. companies are ready to rush into the lucrative Vietnamese market now that President Clinton has lifted the 19-year trade embargo against the Southeast Asian country.

Dozens of major corporations including Coca-Cola Co., Pespi-Cola Co., Procter & Gamble Co., Boeing Co., Microsoft Corp. and Caterpillar have already laid the groundwork to enter the market of 70 million people.

The country poses unique marketing challenges, said Carl Spielvogel, chairman-ceo of Backer Spielvogel Bates Worldwide, New York. Mr. Spielvogel is unabashedly bullish on Vietnam; his agency held its Asia-Pacific regional managers meeting in Ho Chi Minh City in November 1992, and is poised to train young Vietnamese in the advertising business. Training will be held in the Bangkok office.

Vietnam is a young-half the population is under 21-and unsophisticated market familiar with and hungry for U.S. brands, Mr. Spielvogel said, adding, "They'll want everything that is popular here among young people. Soft drinks, confectionary."

The soft-drink category, in particular, is expected to show quick interest in the market. John Englehart, general manager of Ogilvy & Mather's Thailand operations said "the earliest and most fiercely contested battle" in Vietnam will be between O&M's Pepsi and Coca-Cola, handled by McCann-Erickson Worldwide.

Coca-Cola is far and away the most popular brand among brand-conscious and American-loving Vietnamese who have been buying it on the black market. But Pepsi is the market leader in Thailand, Burma, Cambodia and Laos.

Pepsi, which has a joint venture with Vietnam's largest and only modern bottler, boasted it would start bottling through its partner, International Beverage Co., within 24 hours of the end of the embargo.

Meanwhile, Coca-Cola Indochina plans to join forces with Chuong Duong Beverage Co. to produce Coca-Cola at existing facilities in Ho Chi Minh City and with Vietnam National Foodstuff Import & Export Corp. to build a modern production facility outside Hanoi.

Fierce competition is also expected among airlines. United Airlines, already possessing the necessary U.S. authority to fly to Vietnam, plans to offer flights between Los Angeles and Ho Chi Minh City as soon it receives approval from Vietnam. United and Northwest Airlines-the dominant U.S. carriers in the Asia-Pacific-both have had contracts to fly Vietnamese refugees to the U.S.

Despite the enthusiasm about a new market for their products, companies need to keep Vietnam's potential in perspective, said Timothy Gray, a partner in Kai International Trading Co., Washington, which specializes in market research for Vietnam's needs for medical equipment and supplies.

"You can't forget that Vietnam is one of the poorest countries in the world today," he said. "It is going to be some time before they can afford most U.S. products."M

Contributing to this story: Tim Clark, David Butler and Andrew Geddes.


Most Popular
In this article: