The capital city of Hanoi has on first appearance all of the symbols of transnational culture—automobiles, advertising, supermarkets, shopping centres, hotels, fast food chains, credit cards, and movie theatres imparting a feeling of familiarity to home to many westerners.
This emerging transnational culture is testament to the power and influence of advertising and marketing campaigns by large international companies who rely on branding their products around a few themes – happiness, youth, success, status, luxury, fashion, and beauty – in the eyes of the consumer.
For local companies, however, the influx of foreign companies threatens their very survival, said Le Quoc Phuong, an official of the Ministry of Industry and Trade (MOIT), recently.
Local companies in the past had gotten accustomed to having a dominant position in the home market, he said, and now suddenly they face foreign rivals wielding a daunting array of advantages – substantial financial resources, advanced technology, superior products, powerful brands, and seasoned marketing and management skills.
It isn’t just the home market, it’s the overseas market as well.
And it isn’t that the managers of local companies don’t have enough guidance or assistance from the government, but rather it is more related to the fact they don’t follow the advice and help given to them.
In recent overseas trade promotion programs sponsored by the MOIT, many representatives of local companies participated just to visit and tour the foreign country and go on shopping sprees instead of seeking business partners.
Mr Phuong also pointed of the lack of interpersonal and communications skills the representatives possessed, noting with particularity their lack of foreign language skills and cultural awareness.
Even our overseas trade counsellors have not shown an appropriate level of enthusiasm and haven’t stepped up to the plate and gone to bat for local companies and helped them effectively build their brands in foreign markets.
Nguyen Van Nghia of the Dai Loc Ltd Company, on the other hand, holds an opposing view to Mr Phuong. He said the government has not done enough and needs to do much more by way of conducting more overseas trade missions.
He also believes the government focuses too much on the big cities and ignores the rural areas. He postulates that the government should budget 10% of all domestic export revenues for overseas trade missions.
Mr Phuong noted that market research and analysis capacity could be greatly improved, if the government took the lead and coordinated all trade and promotion activities for the business community.
Phan Thi Thanh Xuan, general secretary of the Vietnam Leather, Footwear and Handbag Association (LEFASO), doesn’t agree with Mr Nghia. Mr Xuan suggests the problem can be resolved via more training and consultant programs for local companies.
The MOIT should take representatives from local companies on more fact-find tours of developed countries such as to the fashion industries in Italy and other EU countries so they can learn from first-hand experience how to effectively compete.
There should be considerably more training courses such as on fashion design, weaving, and dying because these fields are those for which local companies are very weak, said Mr Giang.
Though transnational companies bring an array of powerful resources that can intimidate even the most self-assured local manager—the smaller domestic competitors can rise to the challenge and prevail if they can devise the right survival strategy, noted Mr Giang.