But not all have had a good 2008. Vietnam, with its export-driven economy, has attracted parallels to its neighbour in the north. But in the past 12 months little has been done to persuade investors or marketers that Vietnam is ‘the new China’.
Rampant inflation has applied the brakes to an economy and ad market that was experiencing high double-digit growth until last year. But the market in 2008 held steady, says David Smail, the head of BBDO Vietnam.
The most active sectors have been telcos and, increasingly, banks. HSBC has been particularly aggressive. Sales of luxury brands, such as Mercedes, have been sluggish, while food firms, such as Fonterra and local giant Vinamilk have suffered because of the melamine milk scare.
But optimism remains, says Smail, as it did in the financial crisis in 1997. “The currency isn’t tradable, so things are fairly stable in Vietnam,” he says.
While Indonesia, Thailand and the Philippines stuttered somewhat in 2008, Vietnam’s neighbours Cambodia and Laos showed signs of potential. Both markets are at least 10 years behind Vietnam in development terms, says Peter Skalberg, the Southeast Asia director of Bates141. But as distribution networks improve, so marketers have been more able to seize on growth opportunities.
KFC opened its first restaurant in Cambodia’s capital to great fanfare this year, and Japan Tobacco launched Winston cigarettes. Low competition has meant that in many sectors brands can enter unopposed. But while increasing competition in Vietnam has intensified the need for brand differentiation and strategic planning, in Cambodia marketing activity remains limited to smaller-scale projects tied in with distributors.
In mountainous Laos distribution has never been easy. But this didn’t stop Asia-Pacific Breweries from launching Tiger Beer in 2008.
An even better bet is Pakistan. Its population and economy are double the size of Vietnam’s and the marketing industry is more mature and the media landscape more complex. But the political turmoil Pakistan suffered in 2008 has held the industry back.
Ogilvy Pakistan’s MD Shakeel Khokal says his country suffered the “worst economic blow” in its history this year, when the Government abruptly raised fuel prices. Combined with the higher cost of food, consumer price inflation rose by 30 per cent, shattering confidence on the high street. This started to unwind a consumer trend for branded goods being chosen over low-cost alternatives, and the marketing industry slowed as advertisers cut budgets. Growth of 22 per cent in 2007 is likely to slow to 17 per cent in 2008, reckons Khokal.
Pakistan’s neighbour Bangla-desh is another emerging market, although the country is equally blighted by political instability. That has held the economy in “a state of suspended animation”, says Partha Salahuddin, the CEO of Ogilvy & Mather Bangladesh.
The growth of Bangladesh’s ad market slowed from 22 per cent in 2006 to seven per cent in 2007. Things have picked up since, with 16 per cent predicted for this year, driven by big-spending telcos and established MNCs.
Bangladesh and Pakistan, with their larger populations, look the most likely bets for growth in 2009. But for a country like Vietnam, which saw its economy overheat in 2008, slower expansion might not be such a bad thing.
“Let’s hope Vietnam can keep its speed of development to a manageable level that benefits the environment and the economy,” says Daniel Gordon Jones, GM of DDB Vietnam. “Not too fast, but not too slow."
Got a view?
Email [email protected]
Rampant inflation has applied the brakes to an economy and ad market that was experiencing high double-digit growth until last year. But the market in 2008 held steady, says David Smail, the head of BBDO Vietnam.
The most active sectors have been telcos and, increasingly, banks. HSBC has been particularly aggressive. Sales of luxury brands, such as Mercedes, have been sluggish, while food firms, such as Fonterra and local giant Vinamilk have suffered because of the melamine milk scare.
But optimism remains, says Smail, as it did in the financial crisis in 1997. “The currency isn’t tradable, so things are fairly stable in Vietnam,” he says.
While Indonesia, Thailand and the Philippines stuttered somewhat in 2008, Vietnam’s neighbours Cambodia and Laos showed signs of potential. Both markets are at least 10 years behind Vietnam in development terms, says Peter Skalberg, the Southeast Asia director of Bates141. But as distribution networks improve, so marketers have been more able to seize on growth opportunities.
KFC opened its first restaurant in Cambodia’s capital to great fanfare this year, and Japan Tobacco launched Winston cigarettes. Low competition has meant that in many sectors brands can enter unopposed. But while increasing competition in Vietnam has intensified the need for brand differentiation and strategic planning, in Cambodia marketing activity remains limited to smaller-scale projects tied in with distributors.
In mountainous Laos distribution has never been easy. But this didn’t stop Asia-Pacific Breweries from launching Tiger Beer in 2008.
An even better bet is Pakistan. Its population and economy are double the size of Vietnam’s and the marketing industry is more mature and the media landscape more complex. But the political turmoil Pakistan suffered in 2008 has held the industry back.
Ogilvy Pakistan’s MD Shakeel Khokal says his country suffered the “worst economic blow” in its history this year, when the Government abruptly raised fuel prices. Combined with the higher cost of food, consumer price inflation rose by 30 per cent, shattering confidence on the high street. This started to unwind a consumer trend for branded goods being chosen over low-cost alternatives, and the marketing industry slowed as advertisers cut budgets. Growth of 22 per cent in 2007 is likely to slow to 17 per cent in 2008, reckons Khokal.
Pakistan’s neighbour Bangla-desh is another emerging market, although the country is equally blighted by political instability. That has held the economy in “a state of suspended animation”, says Partha Salahuddin, the CEO of Ogilvy & Mather Bangladesh.
The growth of Bangladesh’s ad market slowed from 22 per cent in 2006 to seven per cent in 2007. Things have picked up since, with 16 per cent predicted for this year, driven by big-spending telcos and established MNCs.
Bangladesh and Pakistan, with their larger populations, look the most likely bets for growth in 2009. But for a country like Vietnam, which saw its economy overheat in 2008, slower expansion might not be such a bad thing.
“Let’s hope Vietnam can keep its speed of development to a manageable level that benefits the environment and the economy,” says Daniel Gordon Jones, GM of DDB Vietnam. “Not too fast, but not too slow."
Got a view?
Email [email protected]
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