By James Hookway
HO CHI MINH CITY-- Henry Nguyen was a toddler when his family
fled Vietnam just before the fall of Saigon 40 years ago.
Now he's back, part of an influx of Vietnamese-born
entrepreneurs returning to the country to reap the benefits of its
shift to a more market-oriented economy.
Since his return in the early 2000s, Mr. Nguyen has become one
of the best-known business figures in the Vietnam. He is head of
Vietnam operations for Boston-based fund manager IDG Ventures, and
he recently introduced the Big Mac to the country as McDonald's
Corp.'s first franchisee here.
In another sign of the changing times, Mr. Nguyen, the son of a
civil engineer who worked with the old South Vietnamese government,
is married to the daughter of Vietnam's communist prime minister.
The couple and their twin daughters live in Ho Chi Minh City, the
name by which Saigon is now known.
"It's something I never planned on or anticipated," said Mr.
Nguyen, a fresh-faced 41-year-old American with thick-rimmed
glasses and spiky hair. "But looking forward, this is where my life
is."
The fact that Mr. Nguyen has gotten so far highlights how much
Vietnam has changed since the South capitulated to Communist forces
on April 30, 1975. It also points to the important role the
country's diaspora has played in expanding the scope and scale of
what could be one of the world's next great economic success
stories.
As Vietnam's Communist Party began to loosen its hold of the
economy in the early 1990s after the collapse of the Soviet Union,
Viet Khieu, or overseas Vietnamese helped lead the march of foreign
investment into the country.
Seattle-raised entrepreneur David Thai helped blaze the trail
when he moved to Hanoi in the 1990s. He became the first overseas
Vietnamese to register a private company and open a chain of coffee
shops under the name Highlands Coffee. Since then, officials say
other expatriate Vietnamese have invested more than $20 billion
here, mostly in and around Ho Chi Minh City, still in many ways the
country's economic engine.
Intel Corp. appointed U.S. national Than Trang Phuc to launch a
$2 billion chip factory in Ho Chi Minh City in the early 2000s,
while other Vietnamese returned from America, France and elsewhere
to set up private businesses.
The potential payoff is significant. Frederic Neumann, co-head
of Asian economic research at HSBC views Vietnam as the best
example of a frontier economy benefiting from rising costs in
China. Thanks to multibillion-dollar investments from companies
such as Samsung Electronics Co. and Intel, exports of smartphones
and other electronics now have eclipsed old standbys such as
textiles and footwear, leaving the country comfortably higher up
the value ladder than cheaper locales such as Cambodia or
Bangladesh.
Foreign direct investment to Vietnam rose nearly fivefold
between 2005 and 2013, while inflows to China expanded 1.7 times,
according to data from the United Nations Conference on Trade and
Development. One of the three Samsung smartphone plants here is the
company's largest anywhere in the world.
Many economists regard Vietnam as the last Confucian-influenced
economy to open up to the rest of the world, following a path
already forged by Japan, South Korea, China, Taiwan and
Singapore.
" Deng Xiaoping gets a lot of credit for saying that to get rich
is glorious," Mr. Nguyen said. "But that's not a political
statement. That's a Sino-Confusion value."
Already Vietnam exports more goods to the U.S. than Thailand or
Indonesia, while demographics play in its favor, too. A third of
the country's 90 million people were born in the 1980s or 1990s,
many of them are often seen perched on the throngs of motor
scooters that weave precariously through the streets of Ho Chi Minh
City and Hanoi.
"The next decade will be incredibly interesting," Mr. Nguyen
said. "This could be what I call Vietnam's golden hour."
While Mr. Nguyen's return to the country of his birth has been
relatively smooth, other returnees have found the journey back more
difficult.
American citizen Hoan Nguyen (no relation to Henry Nguyen; many
Vietnamese share the family name Nguyen), for instance, spent 14
months, without being charged, in Hanoi's dank B14 prison after a
dispute with his Vietnamese business partners in an international
school project.
He recalled listening to state radio broadcasts booming out in
the prison's courtyard each morning exhorting overseas Vietnamese
to return to invest in the motherland. He was eventually freed
after police concluded he hadn't committed any crime.
Other returning entrepreneurs have found themselves snared in
similar disputes, caught out by a legal system ill-equipped to
handle civil disputes and where personal contacts sometimes matter
more than the rule of law.
For Henry Nguyen, the biggest problems have come from the U.S.,
where some Vietnamese-Americans have been critical of his marriage
to Nguyen Tan Phuong, the daughter of Vietnam's Prime Minister
Nguyen Tan Dung, in 2008.
Many attacked him on Internet sites, accusing him of selling out
to Vietnam's communist leaders.
"Henry Nguyen is a communist wearing a Viet Khieu mask," read
one anonymous post on a bulletin board catering to the
Vietnamese-American community.
The storm surrounding Mr. Nguyen's involvement with the prime
minister's family worsened in 2013, when he secured a franchise to
open Vietnam's first McDonald's. This time the accusation he faced
from the blogosphere was nepotism.
It was a common allegation in the years following the global
financial crisis, which hit Vietnam hard. The country's rapid
growth has seen the children and relatives of prominent Politburo
members and businessmen quickly rise through the ranks. The former
head of state-owned shipbuilder Vietnam Shipbuilding Industry
Group, for instance, appointed his son, brother and brother-in-law
to senior positions before the company's debt bubble burst in 2010
and landed him in prison.
Both McDonald's and Mr. Nguyen say the burger deal was the
result of years of lobbying on Mr. Nguyen's part. For a time Mr.
Nguyen was known inside the company's international franchising
division as "The Stalker" for the blizzard of reports on Vietnam's
progress that he used to send to McDonald's headquarters in Oak
Brook, Ill.
It has been a difficult claim to shake off. "I can see where the
narrative comes from," said Mr. Nguyen.
Henry Nguyen grew up in Virginia's Fairfax County, not far from
Washington, D.C., where his father built a new life for his family
after leaving Vietnam. He describes his upbringing as that of "a
typical suburban kid." He played football. He went on dates. In his
teens, he got a job flipping burgers at a local McDonald's, where
he says he fell in love with the brand.
At that age, he didn't have much to do with Vietnam at all, Mr.
Nguyen recalls. The country's language and customs were largely a
mystery to him despite his mother's efforts to pass them on to him
and his siblings.
But after a spell at Harvard and postgraduate studies at
Northwestern University Medical School and the Kellogg School of
Management in Chicago, Vietnam intervened: Mr. Nguyen landed a
summer job writing for the student travel guide "Let's Go" and the
publisher asked him to go to Hanoi.
He set out on the 52-hour journey from Boston via San Francisco,
Tokyo, Singapore and Ho Chi Minh City with some trepidation.
Despite his family connections, Vietnam was an unknown quantity.
The young Mr. Nguyen's knowledge of the country largely consisted
of Hollywood war films.
What he found when he arrived and walked a block or two to
Hanoi's Hoan Kiem Lake was, he says, a revelation. "These people
spoke the same language my parents spoke at home, they eat the same
food. At some level, it was home," Mr. Nguyen said.
He returned again to try his hand at business and was hired by
International Data Group's founder, Patrick McGovern, after a
chance meeting at a business-community breakfast in Hanoi. Mr.
Nguyen, then just 31, was tasked with overseeing the firm's
expansion into Vietnam.
"Let me tell you, I was something of an odd bird to be there in
Hanoi," he said. "My language skills weren't really there and it
was tough to explain to people what I was doing here."
From the beginning, he bet heavily on the Internet, positioning
IDG as a lead investor in Vietnam's emerging startup scene, funding
everything from e-commerce outfits to music-and-entertainment
websites. Early successes included funding VNG Corp., a maker of
multiplayer video games that morphed into a sprawling Internet
conglomerate running some of the country's most popular
social-media sites and messaging platforms.
Vietnam's Internet economy is still growing quickly. AT Kearney,
in a recent report, noted that Internet penetration rates are
rising faster in Vietnam than anywhere else in the region. It also
has more Internet users--more than 40 million--than anywhere else
in Southeast Asia, including Indonesia, which has a population of
more than 250 million.
In light of that growth, Mr. Nguyen is stepping up IDG's bet on
the Internet in Vietnam. The firm recently invested in local
e-commerce firm Hotdeal.vn.
Its chief executive, Nguyen Thanh Van An, said in an interview
that his company handles an average of $100,000 worth of
transactions a day, with volumes growing at about 15% a month. It
already has a team of more than 100 red-and-black-clad drivers
zipping through Ho Chi Minh City, delivering orders of women's
fashions, children's toys and discount coupons.
"Groceries could be next," Mr. An said, speculating that
Hotdeal.vn and competitors such as Lazada might develop a foothold
in the country before large supermarket chains do.
"Vietnam hasn't seen a period of peace and stability like this
for a couple of centuries," Mr. Nguyen reckons. "We're still in the
very early innings."
Nguyen Anh Thu contributed to this article.
Write to James Hookway at james.hookway@wsj.com
Access Investor Kit for Intel Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4581401001
Access Investor Kit for McDonald's Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US5801351017