Vietnam: Tastes Like China Lite

My mother, bless her heart, ALWAYS orders chicken whenever she eats dinner out. Those few times I’ve convinced her to order something else, she ends up saying it “tastes like chicken” anyway. I mention this because I worry I am doing the same thing with Vietnam in comparing it to China.

But I cannot help it.

I recently spent ten whirlwind weeks in Vietnam, mostly in Saigon (a/k/a Ho Chi Minh City or HCM) and, based on that, I am willing to venture forth with my impressions. While in HCM, I met with countless lawyers and foreign businesspeople and I talked endlessly with every cab driver, concierge, waiter, etc., I encountered. I also read a score of local magazines and newspapers. Interestingly, I have gotten more e-mails from more readers asking me to write on Vietnam than on any other issue since starting this blog. Worth Magazine [link no longer exits] even interviewed me on my trip. There is obviously huge interest in Vietnam, so here goes.

1. Great place. The first thing I always notice when I go to Saigon are the motorbikes. They are everywhere, and in huge quantities. I am proud to say that by the time I left Saigon, streets that initially took me five minutes to get up the courage to cross took me only two. I cannot compare my crossing speed with the locals because they seem to get around on motorbikes, not by walking. Every foreigner and every native with whom I spoke said they loved Saigon.

2. The food is incredible. Incredible. And really cheap.

Excellent Pho at Pho24. It’s part of a chain owned by Nam An Group, which owns and operates a number of other Vietnamese restaurants. Pho24 has countless locations in Hanoi and Saigon and one in the Philippines as well. Seems it would do well in the United States too. I got the meal-sized vegetarian Pho (is it really Pho without meat?) for $1.50. That’s right, $1.50. It was excellent.

I had lunch one day at Maxim’s on Dong Khoi Street. Dong Khoi is Saigon’s main shopping street and Frommer’s review of Maxim’s is right on the money:

Enjoy Vietnamese cuisine in this luxurious setting right in the heart of the city on Dong Khoi (the restaurant is just next to the entrance of the Majestic Hotel where Dong Khoi meets the Saigon River). The open-air lobby leads to an inner sanctum with a large dining area flanked by a cool, contemporary Mandarin-style bar and murals of an oversize lily pond, complete with Japanese koi. Dark wood booths are draped in faux mosquito nets on one side, while private rooms on the other side are heavy with Chinese-style carved cornices, furnishings, and Day-Glo artwork. Popular for power lunches. Entrees are pricey, but portions are large and everything is delicious. The menu’s heavy on seafood — including baked or steamed lobster and shrimp, as well as whole fish done in ginger or soy. The large seafood hot pots are impressive. Starters such as spring rolls, fried tofu, or grilled pork are good to share, and stylish Maxim’s is a great air-conditioned break from shopping on Dong Khoi.

3. The Park Hyatt Saigon is incredible. Incredible.

I am somewhat embarrassed to admit I stayed at the Park Hyatt. Though not terribly expensive by American standards ($200 a night, including breakfast and internet), I am certain I could have done just fine at many other hotels and paid only half as much. The service there was some of the best I have ever experienced at any hotel. Starting with the assumption (valid I think) that Asia hotels have the best service, this hotel tops anything I have ever experienced in Japan, Korea, or China. The Park Hyatt in Hong Kong comes close, but falls short. The Park Hyatt in Tokyo (the hotel in the movie, Lost in Translation) comes close, but even it too falls short.

The reality is that the Saigon Park Hyatt can do what it does because labor costs in Vietnam are so low. Anyway, I was picked up at the airport in a brand new Mercedes Benz E class. It had water and towels and I was given a music playlist. I chose Vietnamese songs, figuring when in Vietnam . . . . Yes, I fully realize that riding around in a chauffeur driven Mercedes isn’t exactly “Vietnam.” It cost $28.

When I arrived at the hotel at least five people greeted me by saying “hello Mr. Harris.” I was led to my room where I was introduced to my Butler who asked if I had any clothes needing pressing. The room was not huge, but it was exceedingly tasteful, with great photographs of old Vietnam. The floor in the room entrance was a beautiful hardwood and the bathroom was nearly all marble. The internet was plenty fast. I grabbed a quick lunch at the terribly chic Square One Vietnamese restaurant in the hotel. I had a four course curry fish lunch, including great French bread and an excellent chocolate cake and I paid $12, including a big tip.

4. Art. Saigon has beautiful art. There are stores selling beautiful paintings, beautiful silk, beautiful jewelry, and beautiful vases and bowls, all at about a third the prices in the United States. I have been going to Asia 6-10 times a year for more than a decade and I think this was the first time I had to buy more luggage to carry back my purchases.

But let’s talk about Vietnam business and law.

My sense — both from my own dealings with Vietnam and from my conversations over the years and on this trip — is that Vietnam is about where China was maybe 10 or 15 years ago. Some of the international businesspeople and lawyers there told me this and even gave examples. The English language press would sometimes hint at this, and at other times, pretty much flat out admit it. There is no doubt Vietnam looks to China in determining how to chart its own economic miracle with Communist characteristics. But it is not there yet.

It strikes me that corruption is a bigger problem for foreign businesses in Vietnam then it is in China. People love to portray China as incredibly corrupt, but, it really is not. The corruption surveys I have seen put China about in the middle worldwide for corruption, with Vietnam always listed as considerably more corrupt. On top of this, China has made a concerted effort to prevent its government officials from soliciting bribes from foreign enterprises and that effort has generally been pretty effective.

Vietnam is trying to do the same sorts of things, but I heard too many stories of foreign businesses leaving Vietnam because of corruption to believe they have succeeded yet. “Getting better,” is what most told me on this score.

Vietnam’s consumer market is much smaller than China’s, both in absolute numbers and even in percentage of the total populace. Salaries even in big city Saigon are generally not high enough to support massive consumer spending, but the city is not lacking in cell phones and I even came across a Vertu store (Nokia’s luxury phone line). I am of the view that most consumer products and retail businesses should focus on China first, and then Vietnam.

Vietnam is indisputably a rising center for manufacturing and agriculture and I see it growing fast in these two areas over the next few years. Low end manufacturing costs are rising in China and I can see more of that business moving to Vietnam. There will eventually be an end to cheap China. There has to be, but I do not see that happening for at least another decade or two.

Vietnam is also seeking to position itself as a software center and my conversations with those involved in this industry in Vietnam make me think this will eventually be realized.

What are you seeing out there?