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Hanoi's bottled-water
war
By Sean Tucker
A typical
day at the office might include dealing with threats,
sabotage, industrial espionage, dirty rumors, scandal
and political maneuvering. Indeed, you might even dabble
in these activities yourself. But you are not a party
bigwig, drug dealer or head of a Vietnamese crime
syndicate, oh no. You are the boss of a bottled-water
company.
Many Vietnamese are brilliant business
people, with the result that competition is so fierce in
some sectors that there is a temptation to play dirty -
as epitomized by the bottled-water industry. The story
of Laska, a foreign-owned brand of bottled water, is a
case in point.
Laska was an instant success when
it hit the Vietnamese market a few years ago armed with
sharp prices, slick customer service and a shmoozy
public relations manager. The brand quickly established
itself as a big fish, but it appears that the company's
rivals decided the pond wasn't big enough.
First, the company's licensed spring, a reliable
source since before the revolution, mysteriously dried
up. Laska's owners were surprised to say the least. One
rumor was that drilling activities by the local
authority's People's Committee may have disrupted the
source. Indeed, a commercial attache in one of Hanoi's
embassies suggests that "a rival company's closeness to
the government may have influenced the location of the
drilling", although a scientific reason has never been
established.
Whether this turn of events was
natural or otherwise, it was followed just a couple of
months later by an unscheduled government inspection of
the Laska plant. The visit then led to allegations in a
newspaper that the company's real source was not a
spring at all, but rather the murky Thai Binh River, and
that Laska had been mislabeled all along. The company
denied the allegations, but customers defected in
droves. Indeed, many people within Hanoi's business
community think it highly likely that a rival company
set up the whole thing before tipping off the press.
Laska is still trying to rebuild its business, despite a
retraction that appeared in one newspaper.
Meanwhile, other bottled-water companies have
been battling other problems. Cynics in the developed
world sometimes see bottled water as the ultimate con -
but in Vietnam it really can be the ultimate con, thanks
to rampant counterfeiting. Vietnam's most imitated water
brand is the market leader, La Vie. No fewer than 50
copies of this brand have been produced; those who don't
know to look carefully for nonsense names are mainly
rural Vietnamese or foreigners. Sit back, relax and look
for floating bits in the bottom of a bottle of LoVe,
leaVe, La Venir, Larva or Le Vet (popular with war
tourists). La Vie was eventually forced to use a complex
bottle mold to deter copycats and thinner plastic so
that bottles crumple before they can be refilled. This
move has worked - at least for now.
Other bogus
products making fat profits include shampoo, cognac and
copier toner. In fact, fake goods completely control
some markets, and Vietnam is now thought to be the world
leader in piracy. Worryingly, the counterfeiters have
also moved into potentially dangerous goods - cooking
gas, motorcycle parts and prescription drugs.
In
rural areas, some counterfeiters even dress up in the
uniforms of company marketing staff and sell their fakes
for the same price as the originals, while handing out
promotional gifts for that extra touch of
"authenticity". But the manufacturers of original
products have begun to fight back. Showing that
capitalists can also enjoy the benefits of a good
old-fashioned police state, detergent manufacturers have
begun offering incentives to consumers who act as
"informers" when they come across bogus products.
Convincing consumers that there is status in
drinking a certain brand of mineral water is, of course,
the ultimate victory for capitalism. Although it might
seem ironic in a country where most people's drinking
water is collected from the stream and boiled, in the
impressionable cities brand consciousness has arrived.
La Vie is the trendiest brand, seemingly because
most Vietnamese agree that the company had one of the
best advertising campaigns. It is easy for
foreign-backed products with good ads to come across
well. As in the West, bottled water is now hip, but in
Hanoi it can even be a mark of rebellion. "It expresses
that we're young, that we're the new generation," says
Ma Khac Thanh, 24, who says he regularly drinks bottled
water. "Old people just think it's a waste of money."
There is certainly cash to be made from these
new consumers, and Vietnamese are amongst the world's
most competitive people. "When you count your money at
night, you learn fast. And people here will try anything
to succeed," comments one wealthy Vietnamese
businessman. Shrimp farmers poison each other's ponds.
Sugar companies bribe farmers to break their existing
contracts. A recent cutthroat price war among taxi
companies saw one firm allege that a rival hired drug
addicts to crash motorbikes into their cabs. Meanwhile,
another taxi company blocked a competitor's radio system
while their drivers punched each other in the streets.
Bottled water is also judged to be worth
fighting over, if you're prepared for a real scrap. It
is now almost as popular as soft drinks and fruit juice.
Ninety-three percent of Hanoi residents drink it
regularly, and estimates for volume growth are very
healthy. As a result, competition has reached boiling
point this year, with several big players expanding
their operations.
Despite some industry's
cutthroat tactics, water brands from both Coca-Cola and
Pepsi have also entered the market this year. Are the
Americans about to get out of their depths in Vietnam
again? They should certainly be prepared for their
rivals' strong-arm tactics. If not, this time next year
you may well see a photo of the last Coca-Cola water
salesman, clutching the company flag as he is
helicoptered off the office roof.
(©2002 Asia
Times Online Co, Ltd. All rights reserved. Please
contact content@atimes.com
for information on our sales and syndication policies.)
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