Not only has the network’s joint-venture with leading Vietnamese entrepreneur David Thai been met with approval in the industry, but — announced last week to 90 of its most senior executives — it would have injected much-needed confidence internally.
While Grey’s performance has in recent times seemed rather uninspiring, this marriage — internally, at least — should help to demonstrate that the agency is serious about achieving its goals under the direction of chairman and CEO Asia-Pacific Mike Amour and Nirvik Singh, chairman and CEO, South Asia, and president and CEO, Southeast Asia.
Admittedly, the deal is just a small step towards putting the regional Grey house in order, but the Vietnam tie-up does make for a nice story at a network that has been plagued by account and talent departures, not to mention a high-profile JV defection, in recent years.
Grey’s new partner David Thai is a Vietnamese American from Seattle — a Vietkiue as people who fled the country in 1975 are known. He returned to his home country as a student, and soon realised there were business opportunities. Using his American experiences to exploit them, he turned the few hundred dollars in his pocket into a multimillion dollar enterprise — one that now spans coffee, construction, retail and finance.
With the Citic China wound still fresh, few will be surprised at Grey’s partner choice. In Thai,Grey has secured a partner who, while bringing local contacts and licences, isn’t likely to dictate strategy or demand direct involvement — not initially, at least.
Whether or not past experience influenced Grey’s selection, it’s clear that other multinationals are also following the same route.
BBDO, for one, has taken the start-up route. It recently tied up with JWT executive David Smail for its Vietnam entry after a deal with the country’s second-largest local agency Golden Advertising fell through.
Indeed, as is the case in most emerging markets, multinational agencies seeking local partners are known to unearth questionable practices that can be difficult to manage in the interest of transparency. Many in the end choose to go it alone.
But as difficult as it can be to find the right local agency partner, they can be a boon in personal and legal issues, given the complexity of Vietnam’s business and tax structure. The right local partner can also help agencies confront the immensely challenging issue of achieving scale outside of the key cities.
Whichever route multinational agencies opt for it’s clear that Vietnam — after a false start as Southeast Asia’s ‘Tiger economy’ in the mid-’90s — is coming of age. Multinational agencies with rep offices are lining up to build full-service offerings in a country that as recently as 1995 had advertising labelled as one of the country’s five ‘social evils’, on par with prostitution and other vices. This is a market where — if numerous horror stories are to be believed — foreign agencies were once subject to Government raids, offices reportedly tapped and staff ‘tailed’ as the state battled to get to grips with the nature of the communications business.
Since then, much has changed and a stable framework is now in place in which agencies can operate. Today’s issues are less about state intervention than about human resources.
Unlike China, for instance, which has been able to tap neighbouring Hong Kong and Taiwan to fill its talent gap, Vietnam has a smaller overseas talent pool to draw on. Vietkiue are a valuable talent source — bringing Western education and experience as well as cultural understanding — but they come with their own set of baggage. As the market opens up further, the issue of talent is one area that’s still likely to continue to keep many agency heads up at night.
