By Erik Heinrich, Fortune
Vietnam, one of the world’s last remaining bastions of communism (along with China, North Korea, and Cuba) has gone gaga over Apple, one of the world’s biggest symbols of free market capitalism and the Western lifestyle. Ironic, yes—but it shows the importance of brand prestige in the minds of some Asian consumers, no matter their politics, ethnicity, or income.
A man looks at a mobile phone on a street in Hanoi, Vietnam in May 2014. Brent Lewin/Bloomberg—Getty Images
In the first half of fiscal 2014, sales of Apple iPhones in Vietnam have increased nearly threefold, more than any other market in the world. To compare, iPhone sales increased 55 percent and 28 percent, respectively, in India and China in the same six-month period. In Brazil and Russia, they were up 61 percent and 97 percent, respectively.
What are the lessons to be learned from Apple’s astonishing success in Vietnam? Can the company apply them elsewhere in Asia?
The tech company’s dominant position in the country of 90 million people boils down to a fortuitous intersection of three factors: demographics, culture, and distribution. Vietnam’s primarily young and technophilic population is leading a revolution in Internet and mobile phone usage. These same people are extremely status conscious, and don’t mind spending as much as two months’ salary on an iPhone—perceived to be the No. 1 brand in mobility—because it’s a highly visible luxury item considered within reach.
“iPhones and iPads are definitely status symbols that are highly sought after in Vietnam,” says Ryan Lai, an IDC analyst based in Kuala Lumpur, Malaysia.
Then there is the partnership with FPT, a domestic tech conglomerate that has been Apple’s official distributor in Vietnam for the last two years. FPT has opened Apple stores in major urban centers across the country, including two in downtown Saigon. “The main reason for Apple’s fast growth in Vietnam recently is its expansion of retail channels, which account for the majority of mobile phone sales in the country,” Lai says. “The FPT partnership allows Apple products better retail presence than they ever had.”
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