Foreign companies have seized 80 percent of Vietnam's advertising firms and reap most of their annual revenues, insiders say.
Vietnamese advertisers have been aggressively acquired by foreign competitors with deeper pockets and more experience.
Nguyen Quoc Bao, director of the Ho Chi Minh City-based Awareness ID Public Relations, which is among the biggest private PR firms in the country, said the remaining independent communication and advertising companies are now struggling to maintain control over their businesses.
Bao said ten large Vietnamese advertising firms have been acquired by foreign companies since 2008.
In all cases, he said, the firms had no choice but to “sell themselves.”
The US Omnicom Group took over three such companies while the British multinational advertising and PR company WPP purchased 30 percent of DatViet VAC in HCMC and remains a major shareholder in the Smart Media Advertisement Company, which was co-founded by state-owned giants, including the Vietnam Post and Telecommunication Group and Vietnam Television and Vietnam Post.
"Several international PR groups have made it clear that they want to enter Vietnam just like they did China and India - without spending a lot of time or money." -- Nguyen Quoc Bao, director of the Ho Chi Minh City-based Awareness ID Public Relations
The world’s largest PR firm, Edelman, also took over local marketing and PR firm AVC to establish the joint-venture AVC Edelman.
Richard Edelman, general director of the namesake firm, told the media that multinational corporations operating in Vietnam had sought their services here and a merger proved the quickest way to enter the market.
Bao said the local PR industry continues to have roughly 200 wholly-Vietnamese companies--all of which are struggling to remain solvent.
As such, he said, they remain vulnerable to being gobbled up by firms like Edelman.
His receives offers to sell shares to foreign companies almost every year.
“Several international PR groups have made it clear that they want to enter Vietnam just like they did China and India -- without spending a lot of time or money," he said, adding that mergers provide a quick, win-win solution.
“[Local firms'] status goes up and we share the market segment with [foreign parent companies].”
But his company, which received a Certificate of Excellence in Public Relations from the ASEAN PR Network, has turned down all the offers, saying it doesn't need such a boost in status yet.
“We want to maintain an independent Vietnamese PR firm that survives without relying on foreign [resources].
“There are many ways to raise our status, such as by making use of our deep understanding of the local market, constantly training our staff and specializing our services.”
Phan Nam Phuoc, co-founder of a PR company that was taken over during a difficult time by a foreign competitor in 2010, said the companies that pursued M&As all had good reasons to do so
She said the firms variously pursued the mergers “to upgrade their brand, to call for funds, to engage in professional PR that complies with international standards.”
But she also expressed some regret, saying that being a solely Vietnamese firm has its up sides--without specifying what they were.
Phuoc said her team may have made acted differently if given a second chance.
Do Kim Dung, head of the Vietnam Advertising Research and Training Institute and deputy head of Vietnam Advertising Association, said local businesses have not supported local PR firms.
Dung said he's heard of many cases where Vietnamese PR firms invited businesses to present their ideas only to have their clients take those ideas to bigger foreign ad firms.
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