Peter Ngo, the Vietnamese-American owner of licensing company Global Brands, tells Thanh Nien Weekly how international brands and local products are merging in Vietnam.
Thanh Nien Weekly: What brought you into this business field?
Peter Ngo: As a parent of two daughters, and having lived abroad for a long time, I can see that there isn't a very broad market for Vietnamese children's products. Those products that do exist are expensive. So I wanted to bring brands that kids love to Vietnam, at an affordable price.
My company represents Warner Bros. and FIFA World Cup 2010 products as a sub-agent for Vietnam as well as Laos and Cambodia. We license the brands to local companies. Basically, they pay us for the license to be able to use the companies' trademarks on their own products. In return, people recognize the famous characters and brands, and are more inclined to purchase their products.
For example, kids in Vietnam are already familiar with Tom and Jerry. So, if a company was able to use these characters on their products, they would attract more buyers.
To do this, they have to work with my company for terms and conditions. Then they will sign a contract directly with Warner Bros. to be able to use the images and names. So instead of having ABC Cookies, the company can have Tom and Jerry Cookies, using the characters from the show to improve their sales.
Your business is rather new in Vietnam. How do Vietnamese people welcome it?
Licensing fits into the national government plan to market Vietnamese products. Competitively, these are quality products. But Vietnamese companies often lack the necessary resources for proper product and industrial design. How they make the packaging and use characters to attract customers is important. So by using licensing, the company can have better sales because they're using well-known character images, but they're using it to build their own brand.
In this way, the Vietnamese products will also gain a foothold in the market. An example of this is Sapuwa Water. They license the product using Tom and Jerry images, but they're building up the Sapuwa Water brand at the same time. We have licensees that are actually using Warner Bros. characters, which increases their recognition, and building their own original trademarks at the same time. So it's a win-win for both the company and the brand.
Do you face any difficulties when working with Warner Bros.?
As one of the largest companies in the world, they are very hesitant in trusting someone to manage a multibillion dollar brand. They want to be absolutely sure that you understand the brand and can manage it without damaging it. It took two years of them visiting back and forth between the US and Vietnam. They want to be sure that everything is available to be managed, right down to the positioning of the characters on the product packaging.
And what about pirates?
Intellectual property infringement is prevalent in the world. The issue of people misusing characters and trademarks on their products is a big one. Companies spend a lot of money and hours designing their trademarks and brands, and they deserve to be compensated for that.
How do you deal with this problem?
What Warner Bros. does is use a local law firm for each location they are licensing our trademarks to. I do market research and make sure that people are using the Warner Bros. brands properly. If they aren't, I notify Warner Bros. and they send a lawyer to deal with them.
Can you elaborate
Visitors look at Disney products at a book fair in Ho Chi Minh City. Using well-known character images can help producers improve their sales, an expert says.
I've spent the last two years cleaning up the market. I work with Fahasa, Big C, Co.opMart, etc, to notify them that we are officially licensing these brands now, so you have to clear it with my company before you use them with your products. I also check the store and make sure that the products in there are all legal and licensed. If something is illegal, I notify them and ask them for their license. If they don't have one, they have to take the product out of the store.
How do they respond?
All the stores have been very compliant. They respond quickly and positively. They are just glad to know where to go now to get their products licensed. We do occasionally find products from smaller companies being marketed without a license. We approach them and say "These brands are trademarked property. If you want to continue using them, you need to buy a license." Sometimes they comply, other times they just remove the brand and continue marketing their products on their own.
How's the future of the licensing business in Vietnam?
Licensing is still quite new in Vietnam, and with the current environment, I see a bright future for it. It has been slow because of the 2009 economic downturn. This year, however, we've seen an upsurge of companies that are interested in using these trademarked characters.
What is your assessment of the business environment right now?
Vietnam has a population of 85 million people. The economy has picked up, and so has sales demand. So the business environment is actually very good right now. Everyone is worried about their production constraints, instead of worrying about being able to sell all of their stock. This is, however, the best problem that a business could possibly have.