Cover art | Stills from "The Richest Man in Xihong"
Wen | Feng Ma Niu (WeChat public number: Feng Lun Feng Ma Niu)
01
The dream of Vietnam's richest man to build a car
Why do entrepreneurs love to build cars across the line? This is perhaps the number one mystery in the business world in the early 21st century.
Onlookers with the overall situation have a view on this: new energy vehicles will inevitably subvert the traditional automotive industry pattern, coupled with the general trend of the Internet of Things, if you do not build a car, you will miss this new outlet. Another group cheered: this is a great opportunity to achieve "cornering overtaking" in the global automotive sector.
Counting the new domestic car-making forces, Evergrande Automobile was once a popular fried chicken: burning money fiercely, loud slogans, from the main business of real estate to the automotive industry, but also successfully listed on the Hong Kong Stock Exchange, the market value even once exceeded BYD, topped the list of Chinese car companies. However, on January 12 this year, Evergrande Automobile's first mass-produced model Hengchi 5 first car rolled off the production line, and no one cheered.
Looking around, there is more than one company like Evergrande that crosses the line to make cars from the real estate field. Just a month before Evergrande Automobile's first car rolled off the production line, Vietnam's first domestic new energy vehicle was also successfully rolled off the production line, and unlike the domestic controversy over new energy vehicles, this car was regarded as a national pride by Vietnamese, and the whole country was praised. On April 7, VinFast, the company that built the car, announced that it had submitted a listing application to the U.S. Securities and Exchange Commission. At a public event, VinFast's CEO also said that it has hired veteran Tesla employee Jeremy Snyder as its U.S. growth officer to oversee VinFast's growth business in North America, where they will provide more spacious and cost-effective electric vehicles than Tesla and help the American people reduce greenhouse gas emissions and obtain a healthier environment.
According to Reuters, if the application is approved, VinFast can raise $2 billion, which will be the largest IPO ever for a Vietnamese company.
$2 billion, VND 45.75 trillion, equivalent to 0.5% of vietnam's entire GDP in 2021. Regarding this figure, Pham Nhat Vuong, founder and chairman of Vingroup, Vinfast's parent company, said: "We don't value money, but the introduction of Vietnamese cars to the world."
Fan Riwang
Vingroup is the largest real estate group in Vietnam, accounting for 1.5% of Vietnam's national GDP in 2021. With 63 provinces, Vingroup employs 41,500 people in 62 provinces and claims to have more than $32 billion in market capital.
It is such a company that has an iron heart to build new energy vehicles and benchmarks itself against Tesla at the beginning.
Where does Fan Riwang's confidence come from? Is Vietnam already a powerful automobile power?
I'm afraid not. Vietnam's first domestically produced car was produced in 1958, but for decades, Vietnam has not developed a sizable car manufacturing brand, once the largest automobile company Thaco's most important performance, from the agent sales of foreign brand cars, the real self-production of only buses and trucks.
Vietnam's automobile industry base is very weak, until now, only Toyota, Mitsubishi, Kia and other foreign car companies have opened CKD factories (full bulk assembly plants), most of the auto parts rely on imports, the localization rate is only 5%-10%. Even vietnam has fewer than 400 enterprises engaged in the automobile supporting industry, of which more than 80% are foreign-funded enterprises.
In 2017, under the expectations of many Vietnamese, Pham Ri Vong established VinFast. The company started entirely from scratch, and even so, there were still a lot of local Vietnamese media reporting excitedly: "The real 'Made in Vietnam' car dream has never been so close!" This year, Tesla released the Model 3, which became the world's best-selling plug-in electric vehicle, the star enterprise was in the limelight, and VinFast, as a newly established company, actually issued a bold statement to be the Vietnamese's own car brand and catch up with Tesla.
In 2018, VinFast released its first product: the Klara electric car, the two-wheeled one. This electric car has smooth lines, good endurance, and is also loaded with 3G and Bluetooth modes, which is convenient for locking and tracking with mobile phones, and it is all over Vietnam at once.
Unlike most of the new car-making forces that shout new energy slogans, VinFast shouted slogans and did not forget to fill up the purse.
At the same time, VinFast launched the construction project of the automobile plant complex, signed cooperation treaties with BMW, Bosch, Siemens, AVL, EDAG and other automotive companies, and reached a strategic cooperation with General Motors, becoming the exclusive distributor of Chevrolet in Vietnam. In the next two years, with the help of many overseas car partners, VinFast launched 4 fuel vehicles, and the affordable two-wheeled electric vehicle has launched 7 series in succession. "Look up at the stars and be down-to-earth" is a true portrayal of VinFast's development.
In December 2021, VinFast's first electric vehicle, the VF e34, rolled off the production line, which is also the first domestic new energy vehicle in Vietnam. The much-anticipated VF e34 has not yet been rolled out in Vietnam, and VinFast has announced 3 new electric models. Taking advantage of the concept's popularity at the Los Angeles Auto Show, VinFast also signed an agreement with the U.S. state of North Carolina to build an 800-hectare auto manufacturing center.
From the establishment of the company, to the first electric vehicle off the production line, and then out of Vietnam to the United States to build a factory, under the premise that Vietnam's entire national automobile industry is very weak, Vietnam's richest man Fan Rin Wang has realized the dream of cross-line car building in only 4 years. It seems that it is not only China that wants to use new energy vehicles to achieve "overtaking in curves" in the automotive industry.
02
The confidence and self-knowledge of the richest man
If it weren't for VinFast's rhetoric to challenge Tesla, Van Ri-Wan would still be the richest man on a global scale with almost no news.
In 2013, the Forbes Global Billionaires List was released. In addition to the well-known names of Bill Gates, Zong Qinghou, and Robin Li, if you patiently turn to 974th, you will find Fan Riwang, who is worth $1.5 billion. This is the first businessman in Vietnam to be listed on the global billionaire list, and as of April 10 this year, Pham Thee Van is worth about $6.4 billion, ranking 411th on the 2022 Forbes Global Billionaire List.
According to this data, Pham Ri Wang became the richest man in Vietnam for 9 years. An important reason why this hat is worn so securely is that Pham Ri Wang has steadily stepped on the wave of Vietnam's development.
In overseas media descriptions, Vietnam has always been regarded as a "little China", not only because the two are historically close and belong to the same socialist country, but also because Vietnam's development pace has always been similar to China's, including the rapid growth of GDP in the 21st century and the explosive development of the real estate industry.
In 1986, Vietnam implemented a policy of innovation and opening up, changing from a planned economy to a market economic system, and the housing system began to be reformed. The following year, the "Foreign Investment in Vietnam Law" was promulgated, Ho Chi Minh City and other frontier cities open to the outside world were affected, and a real estate boom began to appear, and many foreign companies bought houses in these cities under the guise of doing business, only hanging a company billboard, no need to actually operate, and the appreciation of houses was also very impressive. Since then, Vietnam has intervened in the situation of real estate overheating many times, but the housing market is cold and chaotic, house prices fluctuate very much, and there have been many "real estate bubbles" in the outside world.
Pham Ri Wang, the richest man in the real estate business, perfectly avoided the sharp fluctuations in vietnam's real estate market.
Pham Ri Kwan's real estate business in Vietnam was not self-made.
In 2000, Pham Ri Wang used his savings to open the first luxury resort in Nha Trang, Vietnam. Nha Trang is a coastal city in southern Vietnam with an excellent diving environment and a reputation in diving circles all over the world. Diving itself is a middle-class sport that requires a certain wealth base, and van Ri Wan, a resort called Vinpearl, quickly became the first choice for tourists from home and abroad to settle in Nha Trang. At that time, Vietnam's economy was growing rapidly, the trade agreement between Vietnam and the United States allowed foreign capital to pour into Vietnam quickly, and many people were rushing to buy housing, but Pham Rin Wang was looking at the consumer market and steadily catching the first wave of vietnamese people who achieved consumption upgrading.
Vinpearl Nha Trang Resort
The money to open a resort was saved by Van Riwang and his wife in Ukraine.
Born in 1968, Fan Riwang spent his childhood in war, his father was an Air Force soldier, and he was unable to leave home for many years, relying on his mother to sell tea on the street for a living. At the age of 19, Fan Riwang was admitted to the Hanoi University of Mining geology, and because of his excellent mathematical results, he took a full scholarship to study at the Russian University of Geological Exploration. When he graduated from college, just as the Soviet Union collapsed, Fan Riwang and his classmate and fellow villager Fan Qiuxiang had just married, and decided not to return to Vietnam to take advantage of the chaos and opportunities caused by the collapse of the Soviet Union to start a business.
Fan Riwang and his wife moved to Kharkiv, Ukraine, and opened a Vietnamese restaurant called Thang Long, while borrowing money from friends at an interest rate of 8% a month to start a business and produce instant noodles, under the brand name "Mivina". Crisis, there are dangers and opportunities. Mr. and Mrs. Fan Riwang made the right bet in this great crisis of history. In turbulent Ukraine, there is a large number of precarious people, and instant noodles are one of the very few foods they can afford to consume. In 1996, the production of Mivina instant noodles exceeded 1 million packs, and then The Van Ri-Wan couple expanded the brand and operated it as a fast food series. By 2004, Mivina had captured 97% of the Ukrainian market share.
Ukraine's entrepreneurial experience not only allowed Van Riwang to see opportunities in the crisis, but also allowed him to remain calm and away from the center of the whirlpool when the market was hot.
In 2003, the Vietnamese government amended the Land Law to adjust the supply of land and cool down the housing market. According to Vietnamese statistics, vietnamese real estate transaction volume fell by 23 per cent in 2003, by 56 per cent in 2004 and by 78 per cent in 2005. In 2007, the Vietnamese government introduced stimulus measures, mortgage interest rates fell, coupled with international capital inflows, Vietnamese house prices rose rapidly again. In 2008-2010, the global economic crisis caused the Vietnamese housing market to decline again. Until 2014, the Vietnamese government launched a package of home loan programs, the housing market heated up again, and the prosperity has continued to this day.
During these three ups and downs, Van Ri Wang started with the Vinpearl Resort in Nha Trang and officially planned his real estate business.
The first is the upscale villa area.
The first stop was in Van Thy Van Whon's hometown, Hanoi has a big difference from other Vietnamese cities in its architectural style, Vietnam was a long-term French colony, Hanoi is the capital of Vietnam, leaving a large number of French buildings, low floors, low density, large plants obscured. When other real estate developers have built high-rise residences, Fan Riwang chose to reproduce the French high-end villas and sell them to a group of people who most pursue the quality of life. Vietnam's land system is still a mess, the Hanoi old city is a mess of people, house demolition is difficult, and the construction of high-rise houses has to cope with a group of people who protect the urban landscape, and progress is very slow. High-end villas are built and sold quickly, and funds are quickly returned. In 2007, Vincom, a residential company owned by Fan Riwang, was officially listed.
This is followed by commercial centers.
Fan RiWang is well versed in the consumer psychology of the middle class, and after tasting enough sweetness in high-end villa projects, he opened a commercial center in the center of Ho Chi Minh City, a low-rise shopping mall, and a high-rise office building. With confidence in Vietnam's middle-class consumption, Pham Ri Wan talked about world-class luxury brands such as Dior, Hermès and Versace, which are unique in Vietnam, so when it comes to attracting investment, the commercial center sells for more than $8,000 per square meter, setting a record for commercial real estate sales in Vietnam. In 2012, the commercial center was officially opened, and Pham Rin Van once again took the lead over other vietnamese real estate companies. In 2018, Vietnam's tallest building, Landmark Tower 81, was inaugurated in Ho Chi Minh City, the second tallest building in Southeast Asia with 81 floors, making it a representative of Vingroup's commercial real estate.
Landmark Tower 81
The Sedan is a superior apartment.
After 2010, foreign capital actively poured into Vietnam, creating a group of urban residents with strong spending power. In order to make these people also become Vingroup's customers, Pham Ri Wan specially introduced the Chinese feng shui concept to develop the "Royal City" apartment in the center of Hanoi, and once the apartment building here is purchased, it provides free feng shui consulting services to the buyer to ensure the design of a satisfactory "feng shui treasure house". After the success of the apartment building in Hanoi, this model changed slightly and was promoted in other cities in Vietnam. Vingroup took the opportunity to become synonymous with quality housing in Vietnam.
It is not difficult to see that vietnam's richest man with excellent mathematical skills and living in turmoil has an unusually sensitive sense of opportunity, so there are often surprising moves at key moments. Vietnam has a large population, the vast majority of real estate companies want to eat the demographic dividend, and it is the most conventional practice to quickly promote large-scale residential buildings, but Fan Riwang will focus on the most consumable people, with small quantity and high quality. He is an atypical real estate businessman.
03
Who is supporting Fan Riwang
After 2010, it really stood firm in Vietnam's real estate leader, in 2017 it was in a hurry to build a car, and in 2022, it was ready to build a factory in the United States and challenge Tesla face to face.
In fact, car building is not the first diversified industry proposed by Fan Riwang.
In 2010, Van Ri-wan sold his Ukrainian fast food business to Nestlé for a profit of $150 million, and then devoted himself to the development of Vietnamese Vingroup. In 2014, Vingroup entered the retail industry, acquiring supermarket chains and establishing a cheap version of Vietnam's "Carrefour". In 2018, Vingroup launched the Vsmart brand mobile phone, based on the Android system, launched a customized version of the VOS system. At the mobile phone conference, the speaker said that the Vietnamese mobile phone market is monopolized by a few brands such as Samsung, OPPO and Xiaomi, and other manufacturers do not see the necessity of making mobile phones, but Vsmart wants to make Vietnamese mobile phones.
Does the rhetoric reveal some familiar flavor?
From "Vietnamese own car brand" to "Vietnamese own mobile phone brand", it is playing the "localization" card, and in the language we are more familiar with, Vingroup is committed to developing Vietnam's "domestic products".
It is worth noting that the Vsmart mobile phone is produced by the car company VinFast, and the minimum price is only $120, which is lower than the Xiaomi mobile phone, which is known as the ultimate cost performance. In Vingroup's campaign, the phones are part of an ecosystem of AI devices that the company plans to bring to market, which also includes new energy vehicles. In 2019, Vingroup acquired MonPay, an electronic payment platform, which also has companies specializing in big data, AI services, and network security services.
In addition, in order to cultivate its own talents, Vingroup, together with Cornell University and the University of Pennsylvania, opened its own university: VinUniversity. Prior to this, Vingroup had been involved in the field of education in kindergarten, elementary school, junior high school and high school. In 2021, Vingroup also imitated the Nobel Prize, awarding $4.5 million to several outstanding scientists in different fields, focusing on biology and medical fields, and attracting talents for their own medical sectors.
VinUniversity is now one of the most powerful universities in Vietnam
Finance, education, healthcare, the internet, cars, everything related to real estate... This is Vingroup's vast business landscape. What is reflected in this is not only the strong intention of Mr. and Mrs. Pham Ri Wang for diversified development, but also the rapid development speed of Vietnam in recent years.
Today, Vietnam, with a population of nearly 100 million and an average age of only 25 years old, is still a very young country full of possibilities, and such a country always gives people endless imagination in the special space economy such as cars and houses.
In a few interviews with reporters, someone asked Pham Ri Wang a question: why the Vietnamese real estate market fluctuates so much, why he is always optimistic about the market prospects. Pham Rin Wan replied: "Vietnamese people are very similar to Chinese, used to saving money, but people can't always lie down on gold bars to sleep. Now more and more people recognize the importance of investment, which is a good thing for the real estate market."
To this day, Vietnam's urbanization is still advancing rapidly. Young people going to the city to work, buy houses, marry wives and have children, and worry about medical education, these important processes that once pulled China's economy are now happening in Vietnam. No matter how much VinFast challenges Tesla, Van Il-wan always understands that the real strength that makes his Vingroup thrive comes from the land beneath his feet, the land that longs for "Made in Vietnam".
Source:
[1] Nguyen Phuong Wah: Analysis of the Impact of International Capital Flows on Vietnamese Real Estate Prices, Master's Thesis of Chongqing University of Technology
[2] Vu Quoc Phuong: Research on VinGroup Group's Measures to Deal with the Bubble in Vietnam's Real Estate Market, Master's Thesis of Hunan Normal University
[3] Nguyen Thi Thi Truong: Research on the Development and Policy of New Energy Automobile Industry in Vietnam, Master's Thesis of Northwest University
[4] Chen Jincheng: Research on the Development Status of Vietnam's Real Estate Market and Countermeasures- A Case Study of Hanoi, The Capital of Vietnam, Beijing Jiaotong University, Master's Thesis
[5] Yang Ran: Vietnam's Urban Land Resources and Real Estate Development Management Policy Analysis, ASEAN Window
[6] Annette M Kim: A Market Without Legitimate Property Ownership_ On the Emerging Private Real Estate Market in Ho Chi Minh City, Vietnam, Urban Planning Abroad
[7] Li Jingtao: Vietnamese billionaire and global figure who debuted on the Forbes list
[8] Vingroup Company: Annual Report 2021
[9] Vingroup Company: VISION, MISSIONS & CORE VALUES
[10] Ralph Jennings: Vietnamese Smartphone Brand Aims To Take Market Share Away From Chinese Rivals, Forbes
[11] Ralph Jennings: Loaded With Tesla-Like Features, Vietnam’s Vingroup Plans Rollout Of Electric SUVs, Forbes
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The author of this article | Mao Hongtao Editor-in-Chief| Wang Tao
Editor| Chen Runjiang Consultant | Wang Shuqi