VietNamNet Bridge – The two giants Openasia Group and IPP have been competing vehemently in the battle of distributing branded goods. However, in the eyes of outsiders, they have been coexisting in peace.
A lot of big names in the business circle and celebrities in Vietnam’s showbiz were invited to the opening ceremony of Louis Vuitton kiosk at Trang Tien Plaza, the most advantageous position in Hanoi.
The event, in the eyes of analysts, showed the great potential of the domestic branded goods market.
In 2012, branded goods imports alone accounted for $10 billion of the total import turnover, according to the Ministry of Industry and Trade.
The big guys
Imex Pan Pacific (IPP) proves to be the biggest distributor of branded goods in Vietnam, which holds 70 percent of the market share, according to the group.
With the 20-year experiences in trading duty free goods, IPP has great advantages in persuading the world’s luxurious brands to grant it the right to become the exclusive distributor of the goods in Vietnam.
In early 1990s, as the Chief Representative of the Filipino Airlines in Vietnam, Jonathan Hanh Nguyen acted as the bridge for Hong Kong’s DFS Group, which has hundreds of duty free shops at international airports in Asia Pacific, to bring high grade branded goods to Vietnam.
There are about 10 of the largest branded goods distributors in the domestic market, of which Openasia is considered the biggest rival for IPP.
Openasia is the business founded by a Viet Kieu (overseas Vietnamese) in France in 1998.
Openasia’s core business is providing investment banking services and financial consultancy. Its 600 clients over the last two decades include foreign and domestic companies, including the familiar Vietnamese names such as Vinamilk, Mero Cash & Carry and Satra.
In recent years, the group has tried to diversify its business strategy, having jumped into seven business fields, including the branded goods distribution which brings 60 percent of the total yearly turnover of Openasia.
IPP and Openasia are the equal rivals in their field. While IPP has its great advantages to access the global big brands, Openasia keeps a good relation with French Artemis over the last many years.
The website of the group showed that its total turnover in 2010 reached 15.5 billion euros, which mostly came from the high end branded goods and auctions.
However, the good business relationship with the global big brands is not enough for the groups to succeed in their business. Looking for suitable retail premises is always the biggest challenge for retailers, especially the branded goods distributors, because the big international brands always demand their products to be displayed at the most advantageous positions in Hanoi and HCM City.
According to CBRE Vietnam, the rents are very high, about $150-200 per square meter, the highest level in the region. However, with the powerful financial capability, Openasia and IPP can completely please their partners.
In 2011, Johnathan Hanh Nguyen acted as the bridge for DFS to join hands with the State Capital Investment Corporation in a project to upgrade Trang Tien Plaza and turn it into the most luxurious shopping mall in Vietnam. IPP spent VND400 billion on the project. It takes $4-12 million for luxury brands to set up a stall, and $150 million to set up the 112 stalls there, or VND3 trillion. IPP alone has 20 stalls.
Meanwhile, Openasia has developed nine shops specializing in distributing branded goods in Hanoi and HCM City with the investment capital of up to $70 million, according to experts.