The paradoxical situation of businesses moving from the South to the North.

While many Saigon tycoons have found considerable success expanding their businesses to the North, the Hanoi giants, on the other hand, have struggled to enter the South.

Pho 24, Nguyen Kim, or Saigon Co.op... these major Southern brands are now familiar to Northern consumers, and their revenue and profits are increasing year after year.

Established in 2003, Pho 24 quickly gained a reputation in Ho Chi Minh City with a chain of several dozen stores. In contrast to the image of traditional pho restaurants with their simple decor and casual dining style, Pho 24 opts for a polite, professional, air-conditioned restaurant-style service.

In a conversation, Mr. Ly Qui Trung, the founder of the Pho 24 chain, spoke enthusiastically about the risky journey of bringing the brand to Hanoi, where traditional pho almost dominates every corner.

Mr. Trung recounted that when Pho 24 had become successful in Saigon, he began planning to expand to the North. Initially, many people discouraged him because Hanoi is a long-standing traditional pho restaurant. However, in Mr. Trung's eyes, that wasn't that important. "On several occasions when I went out for lunch with business partners, they really wanted to treat me to traditional pho, but they were hesitant because they were worried about the restaurant not being polite. Just imagine sitting there sweating profusely in the middle of a hot midday – what would that look like?" Mr. Trung said. Therefore, he realized that his business model and service were completely different, both in terms of facilities and service.

Pho 24 is a successful branding story when expanding into Northern Vietnam.

He analyzed that Hanoi pho vendors were less welcoming, didn't focus on the restaurant's appearance, and used a lot of MSG in the broth. Regarding location, he noticed that Hanoi eateries didn't prioritize major streets or central areas, so he took advantage of this loophole by finding the best locations to do business, and it was quite successful with his first pho restaurant, which opened at the end of 2004.

According to Mr. Trung, customers were initially unhappy with the price of the pho because it was quite high. However, after only a few months, the number of customers visiting the restaurant increased significantly. This was because, according to customer reviews, the restaurant was close to their workplaces, the service was good, and although it was slightly more expensive, it was convenient and safe. As a result, after 5 months, Pho 24 opened its second branch in Hanoi.

As for electronics giant Nguyen Kim, on the opening day of its branch in Hoan Kiem District, Hanoi, the entire road leading to the store was packed with people. "The appearance of this Saigon electronics brand was very new to us. Besides the diverse range of products and big promotions, their service style was also completely different," recalled Ms. Lan, a customer in Hoan Kiem District. To date, despite the difficult economic conditions and competition from some major Northern brands like Tran Anh and Pico, this giant still maintains good growth, fluctuating between 10-30%. Currently, Nguyen Kim has three supermarkets located in the capital city.

In the consumer retail segment, Saigon Co.op is practically the "king" in the Southern market. By 2010, this giant began expanding into the Hanoi market. Mr. Nguyen Tien Dung, Director of Co.opmart in the Northern region, said that initially, when entering the North, there were many difficulties in reaching consumers and market pressure, but Co.opmart proactively adjusted its product structure, shopping space, and staff, so the number of customers increased steadily. The average purchasing power at supermarkets in Hanoi is only slightly lower than that of the Ho Chi Minh City market.

In contrast to the successful trend of businesses expanding northward, Hanoi businesses have faced less favorable conditions in the Ho Chi Minh City market.

Hanoi Trading Corporation (Hapro) has been expanding into the South for over 20 years, but its name is little known to consumers. Hapro's products are not widely available in distribution systems or supermarkets. Increasingly overshadowed in the Ho Chi Minh City market, Hapro is almost considering withdrawing from the city and focusing solely on exports. A former manager at Hapro stated that the company's failure in the South stemmed from a family-style management structure. Meanwhile, external management personnel were not empowered, leading to declining business performance.

Despite its ambitious plans, Pico eventually had to leave the Ho Chi Minh City market.

Similarly, while the Ha Long canned food brand dominated the Southern market from 1995 to 2000, even a giant like Vissan couldn't compete, this Northern brand is now gradually declining. On the market, consumers only recognize two familiar canned products: tuna in oil and liver pâté. A long-time saleswoman at Co.opmart supermarket said that only older customers choose to buy them out of habit, while younger customers don't favor them. According to her, despite being on the market for quite some time, the design and packaging of these products remain unchanged, leading to boredom.

Not only established brands, but even young businesses from Hanoi are struggling when entering the Southern market. A prime example is the Korean men's fashion franchise chain (Kosman) in Hanoi. Despite its popularity with customers in the North, with four showrooms in Hanoi and six other stores in other northern provinces, it immediately faced difficulties upon entering Ho Chi Minh City. The store manager stated that initially, the company invested heavily in renting prime locations in the city center. However, gradually, the stores moved further and further away, and now only one location remains on the inconvenient one-way Nguyen Dinh Chieu street (District 3).

A survey by VnExpress.net at this store revealed very few customers. Staff explained that this is due to the limited supply of new products imported from Hanoi, and they even display old, long-standing items. Previously, there were several sales staff, but due to difficult business conditions, only one person remains, also acting as a parking attendant for customers. Furthermore, the prices of these products are quite high, ranging from 500,000 to 1,000,000 VND, comparable to other brands located in the city center.

Besides Hapro, Kosman, Ha Long..., other Hanoi brands like Hai Ha confectionery, despite having a presence in Saigon very early on, are now only operating at a minimal level. Even Fivimart supermarket had to close in Ho Chi Minh City in 2012 and move back to Hanoi. As for the electronics giant Pico, after expanding south for a while, in early March of this year, the supermarket had to put up a "closed" sign and was sold to Lotte...

According to economic experts, the main reason is that the products of these companies are not unique, and sometimes lack appeal compared to products from Southern businesses. Furthermore, their services and marketing methods are poor, causing them to gradually fade into obscurity. Instead of adapting their service style, many Northern giants remain more conservative, resulting in their business models failing to thrive in the South after many years.

Speaking to VnExpress.net, a marketing expert said that it's not easy to assess whether entering the Ho Chi Minh City market is more likely to succeed than entering Hanoi, or vice versa. This is because there are businesses from Hanoi that have succeeded in the South and those that have failed in the North.

Typically, each market has its own unique characteristics and strategies. Some businesses choose new markets as their primary target, while others view them merely as expansion and neglect them, leading to failure. Businesses that know how to adapt their strengths to new markets are more likely to succeed.

Specifically, Golden Gate Company is the largest chain of Asian restaurants in Vietnam and currently owns 11 exclusive restaurant brands with 67 restaurants such as Ashima, Kichi-Kichi, SumoBBQ, Vuvuzela... Although originating from Hanoi, Golden Gate has been more successful in Ho Chi Minh City. "One of the reasons for the success of these chains in Saigon is that Golden Gate has a skilled management team in the South, especially personnel who joined from KFC. And Golden Gate also flexibly allows the Southern team to freely develop according to market trends," this expert explained.

However, from another perspective, this expert asserted that consumers in the two regions always have many differences. Most people in the South accept new products more easily, but they also quickly change their habits, making products more susceptible to rejection. Meanwhile, people in the North are more discerning, but once they become attached to and satisfied with a product, they tend to be more loyal. Therefore, when promoting and producing products for new markets, it's crucial to thoroughly research consumer psychology, competitive advantages, and market gaps to achieve faster success. Service style is also a key factor determining the success or failure of businesses, especially in the service sector. Southern businesses have successfully leveraged their service style to achieve success in the Northern market, where local businesses often fall short in terms of customer service.

According to what I read in the newspaper.