Feeling the high-octane energy in Ho Chi Minh City

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Martin Moodie
Martin Moodie is the Founder & Chairman of The Moodie Report.
Martin Moodie

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Lightning is flashing like giant flickering neon lights outside my Interim Ho Chi Minh Bureau  amid high winds and a sticky torrential downpour.

I’ve taken room service to avoid repeating my mistake of earlier in the week when I walked to a recommended local restaurant  in similar conditions. Despite the protection of a hotel umbrella, I ended up waddling into the eatery doing a decent impersonation of a deep sea diver.

I’m 26 days into my 85-day world tour; another couple of days here in wonderful Vietnam and then on to Zürich for an important business engagement. More of that in coming days.

I’ve had a busy schedule here, especially yesterday, with no less than five hours of interviews, one on top of the other. My excellent ‘Master of Ceremonies’ was Phillip Nguyen, Chief Executive Officer at IPP Travel Retail and Vice President Project Development for parent company IPP Group.

Phillip wanted me to get a comprehensive overview of the realities and potential of the Vietnamese market – not just travel retail but the wider travel ecosystem. He’s a fountain of knowledge himself but by also sitting down with the local heads of DFS, Lotte Duty Free, HMSHost, property experts Savills and IPP Air Cargo, I gleaned a much better understanding of what is happening here.

The country may have been through two brutally tough years due to the pandemic but as with newly established IPP Air Cargo it’s almost take-off time following the lifting of travel restrictions and a reopening of the economy.

Tomorrow I will meet IPP Group Founder and Chairman Johnathan Hanh Nguyen – as mentioned in my last Blog, one of Vietnam’s most honoured and respected businessmen – and the cumulative result of all these fascinating conversations will take shape in my special report to be published next month.

Here are some soundbites, to both whet the appetite for that report and to underline my point about a fascinating market that is set to boom.

DFS Venture Vietnam Vice President Operations Huy Nguyen: “I’m the only VP level in Asia South. Other countries have General Managers. So that tells you a lot in terms of how important this market is… it speaks volumes.”

Martin Moodie with Huy Nguyen (left) from DFS and Phillip Nguyen from IPP Travel Retail

HMSHost Regional Managing Director David Mackay: “We can see the recovery – Vietnam for us in APAC is showing by far the biggest recovery. Domestically, it’s been quite strong since they reopened. We just had our biggest day since COVID.”

Simon Stansfield (left) and David Mackay underlined to me the pivotal importance of Vietnam to HMSHost’s aspirations in the Asia market. I was annoyed with myself for not getting a photo with my fellow Antipodeans (both Aussies) who both live here and are doing a great job in this region and country. The last time I saw Simon was in my hometown of Christchurch in 2011, shortly after the tragic second earthquake that devastated the city and killed 185 people. How time flies.

Autogrill VFS F&B Managing Director Simon Stansfield: “It’s been very welcome that the trends and the timing of people travelling and spending are very familiar for us [i.e. similar to pre-COVID], definitely so in the domestic market. It’s been a solid recovery and I’m hoping by the middle of summer we’ll be back to somewhere near pre-COVID levels, which would be almost unprecedented.”

Savills Deputy Managing Director Troydon Griffiths: “The overriding number I have for my investment thesis is 37% urbanisation in a very small country and with a very high population density, stepping into middle wealth. You don’t find many countries in the world of this nature, with that urban growth still to go. That’s a wonderful domestic story. Plus the population is getting wealthier and we see that through the median price growth in villas, houses and apartments, all sorts of other things.

(Left to right) Savills Deputy Managing Director Troydon Griffiths, Managing Director Neil Macgregor and Director of Commercial Leasing Tu Thing Hong An; Martin Moodie and Phillip Nguyen

“The tourism properties in Vietnam have burgeoned. Every operator has wanted to put their footprint around and so the coastline is now almost taken up with brands one way or another. The cool thing that many commentators don’t observe is that Vietnam’s tourism is 80% domestic or thereabouts. And so while the internationals have a higher spend, you can see in the success of VietJet and others how important domestic tourism is.

“On the retail side we are seeing foreign operators confident about coming in. We’re seeing new brands opening up… they can see the sales in Singapore to Vietnamese consumers and they know that they can do business here. And there are enough mature foreign operators to not have any of the issues that you might have otherwise.”

Lotte Duty Free Chief Support Officer Park (Ryan) Kyungwoo:  “We will open our Da Nang downtown store… we are not sure of the date yet because we are considering the rebound in tourist numbers. And after we open our Da Nang store we will open a new downtown store in Hanoi, though the date is not decided yet.

Lotte Duty Free Chief Support Officer Park (Ryan) Kyungwoo (right) with Phillip Nguyen and Martin Moodie

“So we have opened our airport shops, the next step is downtown. The third step is online business, which we are preparing in Vietnam. We are the number one online duty free shop in the world. We are focusing on Koreans, Japanese and Chinese and also we are focusing on the Vietnamese.”

IPP Air Cargo CEO Lars Winkelbauer:  When I first went to talk to [IPP Group Chairman] Johnathan Nguyen I was quite intrigued not only about the vision but the fact that you don’t very often have the opportunity to set up a brand new airline, a cargo airline, anywhere in the world. The opportunity was just so rare that I felt almost compelled to do it. And because in Vietnam it’s the only air cargo airline – the first ever to be even conceived here.”

IPP Air Cargo CEO Lars Winkelbauer (left) is passionate about delivering IPP Group Chairman Johnathan Nguyen’s vision of a national cargo airline that will transform supply chain logistics and economies of scale in Vietnam. It will also open up huge investment and employment opportunities.

That airline should make its first flight around September this year, an incredible achievement in a very short time (i.e. during the pandemic) since Johnathan Nguyen identified both the need and the opportunity.

I will be telling that story in full soon through the eyes of the Chairman, his son Phillip and Lars Winkelbauer. I promise you that it offers a tantalising insight not only into IPP Group but also the emerging economic and tourism force that is Vietnam.

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