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When Hermes still smiles in Vietnam

Monday, October 22, 2012, 12:42 GMT+7
When Hermes still smiles in Vietnam

It should be clarified right in the beginning of this piece that the Hermes I’m going to talk about here is not one of the 12 Olympian gods in Greek mythology, the one who is believed to have invented the lyre. The Hermes I’m discussing is the Paris-based, high-fashion luxury-goods manufacturer who earlier this year was announced by the World Luxury Association as the world’s most luxurious brand, followed by Louis Vuitton, Chanel, Christian Dior, and Versace. Four years ago, the 170-year-old brand name first arrived in Vietnam with a boutique in Hanoi, and over the past week, the second arrival was marked with a new boutique in Ho Chi Minh City. Hermes chairman Patrick Thomas also arrived in the country to attend this special event. As this is the first time a top Hermes official visited the country, his presence is seen as an appreciation that Vietnam is a potential market. At first I felt little interest in the fact that a top fashion boss had come to Vietnam, but soon startled recalling a story about Hermes bags a local top model recently told me. The model said the Hanoi Hermes boutique had imported ten sets of the latest fashion bags, each of which contained four bags with different colors. Each set fetched US$140,000, or VND2.9 billion, and customers are only allowed to buy all four of them. I was shocked at the ten-figure price in Vietnam, and told her that those bags must be only for display, as who could afford such exorbitant rates? But the model just smiled and, well, shocked me the second time in minutes. “The bags were immediately sold out. Some customers also complained that the boutique manager hadn’t reserved the products for them,” she said. The model said Hermes never manufactures at large quantities, and ten sets of bags for Vietnam was a big favor to this market.Steady growth vs. gloomy economy Ten sets of bags, worth $1.4 million, or VND29 billion, were sold out in seconds! Doesn’t it sound like a joke? But it is a reliable fact, as it was the Hermes chairman who told local media that the firm has enjoyed steady annual growth of 20 to 30 percent during its four years in Vietnam. I then asked the model who the real customers of those luxuries were, and she asserted that the bags are even beyond the reach of models. “We just went to the boutique for window-shopping. Even the business tycoons dating models don’t dare to give them Hermes bags,” she said. So who bought the bags? “The ladies, and young ladies,” she answered. Dozens of thousands of local businesses have vanished from the national economy, and a huge number of realty moguls are depressed by the frozen market. Small manufacturers are struggling to survive from the exorbitant bank loan interest rates. The Ministry of Finance has even expressed concern that the state budget will not be able to increase the basic wages of civil workers, who are already suffering soaring prices. But the Hermes boss still wore a broad smile when announcing the inauguration of the second boutique in Vietnam, which he said is among the very few worldwide boutiques that sell all 16 product divisions of the company. “It’ll be very interesting to find out who really buy the Hermes bags, belts, and watches worth seven to eight-figures in Vietnam dong amid these hard economic times,” many local reporters who attended the inauguration ceremony of Hermes in HCMC told me.

Huy Tho

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