Vietnam has seen two foreign partnership deals in the digital marketing space, during the the first quarter of 2015.
Japanese communications networkDentsu Aegis took a majority stake in Ngoc Luc Bao (Emerald Consulting Co Ltd). Prior to this takeover, Emerald had already partnered one of the Dentsu’s group companies, Isobar, which had acquired 40 per cent stake in Emerald, securing a leading position in the Vietnamese market.
Emerald, with its 80-member-strong team of digital marketing specialists, is providing advertising services to brands such as Adidas, BMW, Google, Samsung, Heineken and General Motor. Vietnam is expected to provide an appropriate launch pad to the newly merged firm for its expansion to the ASEAN countries. According to the multi-national advertising firm, it will implement the integrated marketing communications strategy with digital marketing as the core business.
In another deal, earlier this year, online service providerFPT Online tied up with the NASDAQ Japan-lised (now JASDAQ)DAC Group for developing the digital marketing array. Although it is not an M&A deal (it is a technology transfer memorandum), it has proved the interest of foreign investors in Vietnam’s rising digital market space.
Hirotake Yajima, DAC chairman, said that through its three years operating in the Southeast region, the company has seen the high potential of the 90 million population market of Vietnam, given the rapidly growing Internet and communications environment.
Previously in 2013, ASEAN-focused communications companyRiverorchid had acquired Notch Digital marketing, also to broaden its presence in the ASEAN market. Other typical deals in the past include Ogilvy & Mather buying T&A Communications,Edelmanbuying AVC Communications,TBWA buying Biz Solutions.
These deals are in line with the trend that has seen numerous international communications companies entering the Vietnamese market through M&A, during the last few years, following the surge of the digital development and the increasing demand from local businesses.
Mutual benefits and rising potential
Vietnam has to open its market to foreign companies as a result of globalisation. Therefore, it is now possible for the international companies to establish 100 per cent Vietnam-based branches; but the trend shows that they prefer to have local partners. It is a shorter way to approach customers, who include both the local Vietnamese companies and the foreign investors.
The Vietnamese marketing companies, in turn, have been able to network with global customers and partners. Usually, Vietnamese communications companies have small scale and operate within the country.
According to Kantar Media Vietnam, an agency that surveys the Vietnamese advertising market, advertisements through television have the top spot of the market share. However, the growth of digital marketing is challenging the traditional forms of radio and print publications.
Researches on investment costs for online marketing are not been available for Vietnam, but Kantar Media stated that mobile advertising is on the strong rise. In terms of revenue, last year’s figure for the online advertising segment are estimated to be over $49 million, based on Vietnam’s 55 largest websites, excluding Google and Facebook, which made a combined revenue of $75 million. Thus, the total revenue increased almost 70 per cent year-on-year, according to data of iTracker.vn and TNS Vietnam.
In the top 10 companies with highest advertisement rate, there were four tech giants, both internationally and locally: Samsung, Nokia, VMS MobiFone and FPT. There were also Viettel, VNG and Sony Electronics Vietnam in the top 30.
Source: http://www.dealstreetasia.com/
Key words: Global marketing firm, Vietnam, through, M&As
