I recently started a position as lecturer at Hanoi’s National Economics University. A benefit of teaching undergrads is that you get to use them as a giant test lab for researching cultural trends. They’ll tell you everything you want to know if you know how to ask.
I’ve been researching the parallels between Vietnam 2020 and Shanghai 2005 in terms of economic and market development. To gauge the relative strength of outside cultural influence, I asked a about 50 Hanoi sophomores (in an International Business program) which would be their preferred professional posting for 1-2 years: NY, Shanghai, Paris, Tokyo or Ho Chi Minh City. Over 90% said HCM — and it wasn’t a tough decision. Most of them seemed relieved it was a choice. The few that did say NY or Tokyo always talked about gaining experience that they would bring back to VN after a year or two. Not a single one even considered relocating permanently.
3 Take-aways for Managers:
1. HCMC has some serious buzz. I’m moving from Saigon up to Hanoi next month for a 3-month contract, and people I know down here are NOT jealous. It’s not just the cool kids in Hanoi who want to move to Saigon — I know A LOT of ex-Shanghai “old hands” who are gravitating here as well. Remember that there still aren’t regular flights from the US (or China) into VN. If that ever gets resolved, there will be a serious influx.
2. The West has lost a lot of street credibility and cultural authority. It’s not like the VN kids have a strong negative reaction to the US or Europe — it’s a solid “meh”. I don’t know if it’s politics or the virus, but there is very little excitement among high-potential, bilingual VN students for going overseas. This is a HUGE difference from Shanghai at this stage of their economic development, where all the hip young locals were talking about living & working in the US. I saw more copies of HBR in 2005 Shanghai than I ever did attending business school in NY. But here in Vietnam, the English-speaking undergrad set are listening to Korean music, playing VNG games, and using Chinese hardware. Dell & Apple are overpriced, Western music is too harsh, and Hollywood is passé. The hip-hop street culture in VN is straight outta Gangnam.
3. The cool kids in VN have no interest in Western business models – and only selective aspirations to use US or European brands. Part of it is that they understand and like what is happening in their home market. Ambitious young Vietnamese acknowledge the economic clout of the US, but there’s very little soft-power pull. I don’t think these internationally-oriented young Vietnamese are consciously rejecting the West — they just don’t see it as relevant to their lives. They’re learning English so they can do business with Koreans and Chinese. They’ve got no particular problem with the US — we’re just overpriced and out-of-date. Lenovo used to be the cheap Dell, but now Dell is an expensive Lenovo. If you’re a US marketer, that’s a problem.
Managerial action plan: The diminishment of Western soft power isn’t all bad news, but you’ll have to adjust your approach. VN negotiators are adept at playing one side against the other, and there are A LOT of options for them today. Coming from NY or London used to give you automatic credibility and stature in emerging market situations, but that has largely dissipated. US exceptionalism may be alive and well back home, but the last few years have really taken their toll on our image in emerging markets.
The bad news is that US marketers and investors will have to work harder than they did in China to define a value proposition. The good news is that, for the moment, you are working off a blank slate. But if the South China Sea situation gets worse or if there are more tariffs — or more coronavirus — that could change. Best to start laying the groundwork now in preparation for the re-opening of the borders.