As Vietnam continues to develop and evolve, so too the landscape of entrepreneurship. Aspiring and established entrepreneurs in this vibrant Southeast Asian nation face unique opportunities and challenges as they navigate their way to success. To thrive in this competitive environment, business owners must equip themselves with valuable insights and strategies to make the most of the burgeoning market. In this regard, we present “10 Tips for Entrepreneurs in Vietnam,” a comprehensive guide that offers practical advice on establishing a strong foothold, fostering growth, and overcoming obstacles in this promising business ecosystem.
Vietnam a potential market for entrepreneurs worldwide
Vietnam’s nearly 100 million people have experienced huge economic changes for the last decades. The national GDP is now around $180bn – a stratospheric leap from just $6bn in 1990. As of 2017, 24 of the 28 EU nations have invested in around 2,000 projects in the country, with total registered capital reaching $21.5bn. Industry, construction, and services were the major sectors that attracted the majority of EU capital. Real GDP in Vietnam is projected to expand by 6.8 percent this year (up from 6.5 percent in the previous forecast). In addition, a PwC report published in 2017 suggested that Vietnam would be among the world’s 32 most powerful economies in 2030, ranked ahead of the Netherlands and South Africa.
1. Invest In Personal Relationships
In Vietnam, business and personal are intertwined. People who can connect on a personal level gain better deals. Before doing business, you should be friends first.
Here are a few tips to foster personal relationships with local people:
- Business meetings: During initial business meetings, Vietnamese partners prioritize establishing mutual trust rather than diving straight into business decisions. Therefore, you may want to spend some time to chat with each other, warming up the atmosphere and creating a good mood.
- Social connections: Forging relationships with Vietnamese business owners becomes easier when you share a common connection. Therefore, having a credible intermediary introduce you to local partners serves as an excellent way to initiate the partnership.
- Daily conversations: Vietnamese people commonly discuss personal matters and family issues as a friendly gesture. Don’t be surprised if they inquire about these private topics.
- Seniority & hierarchy: Most Vietnamese companies follow a top-down hierarchical structure, where age, education, and job position hold significance. It is important to demonstrate respect to individuals based on these factors. When meeting a Vietnamese partner, always introduce yourself to the eldest person or the one occupying the highest position.
- The concept of ‘face’: Unlike Western cultures that value directness and frankness, Vietnamese society tends to be less receptive to such approaches. Publicly disagreeing or asking challenging questions can cause someone to “lose face” in Vietnam. Essentially, this refers to damaging their reputation, dignity, and prestige in front of others, which is strongly discouraged. Consequently, individuals may outwardly agree but internally hold different opinions as a polite gesture in the local culture.
As local people generally prefer working with fellow locals, it is advisable for foreign brands to have a local partner who can help them expand their network.
2. Embrace Digital Transformation
By leveraging digital tools and strategies, entrepreneurs can enhance their market presence, reach a wider audience, and improve operational efficiency. In 2022, Vietnam witnessed an average of approximately 76.1 million active social media users per month, reflecting a yearly growth rate of 6.9% from 2021 to 2022. This figure accounts for around 78.1% of the total population. On average, these social media users dedicate approximately 2.47 hours of their time to engaging with social media platforms. Furthermore, each user maintains an average of 7.4 accounts across various social media platforms.
With a large and active user base, platforms like Facebook, Instagram, and YouTube offer opportunities to engage with potential customers and build brand awareness. In addition to embracing international platforms, Vietnam has also witnessed the emergence of its own successful social media applications, namely Zalo. This domestic platform, which boasts messaging functionalities similar to WhatsApp, has gained widespread usage in Vietnam in recent years.
Entrepreneurs can create compelling content, including product showcases, tutorials, and customer testimonials, to showcase their offerings and connect with their target audience.
For instance, a fashion startup in Vietnam can leverage Instagram to showcase their latest collections, collaborate with influencers, and engage with followers through visually appealing posts. By consistently sharing high-quality images, leveraging relevant hashtags, and engaging with followers’ comments, the startup can generate buzz, attract new customers, and drive traffic to their online store or physical boutique.
Furthermore, entrepreneurs can harness the power of search engine optimization (SEO) to improve their website’s visibility in search engine results. By optimizing their website’s content, incorporating relevant keywords, and building quality backlinks, entrepreneurs can increase their website’s ranking and attract organic traffic from search engines like Google. This enables them to reach customers who are actively searching for their products or services.
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3. Care Of Your Reputation, Because Trust Matters
Taking care of your reputation is of utmost importance in Vietnam, as trust is a critical element in building strong relationships with customers, partners, and stakeholders. The Vietnamese consumer market has long been plagued by a pervasive presence of copycat brands and counterfeit products, and this issue continues to persist. As a result, consumers in Vietnam have become cautious and extremely vigilant when it comes to unfamiliar or unbranded products. Establishing a strong brand presence is of utmost importance in Vietnam, as consumers heavily rely on brands to ensure authenticity and quality. It can be said that a positive reputation not only enhances your brand image but also instills confidence and credibility in the minds of those who interact with your business.
Additionally, Vietnamese consumers place great trust in reviews and feedback from their fellow buyers, valuing them more than the promotions offered by brands themselves. As a result, cultivating a robust and positive reputation on social media becomes essential for driving sales and success.
4. Capitalize On E-commerce And Online Shopping Trends
One important aspect of doing business in Vietnam is embracing e-commerce and online shopping trends. Vietnam has emerged as one of the rapidly expanding internet economies in Southeast Asia. It is projected that the value of Vietnam’s e-commerce market will reach an impressive $39 billion by 2025, positioning the country as the second-largest market in the region, surpassed only by Indonesia.
Entrepreneurs can establish an online presence through their own e-commerce website or by partnering with popular online marketplaces such as Lazada, Shopee, Tiki…. For example, a fashion boutique in Vietnam can launch an e-commerce website where customers can browse and purchase products conveniently. By offering a seamless online shopping experience, secure payment options, and fast delivery services, the boutique can cater to the growing number of consumers who prefer to shop online.
5. Take Personal Branding Seriously
Your brand needs marketing investment, so do you. A successful – looking entrepreneur always has more advantages in the business world, especially in Vietnam where trust is hard to build and easy to break. You can engage in personal PR on top business magazines such as Cafebiz.vn or Forbes; become a speaker in networking or industry events; or frequently sharing valuable insights on your social media accounts. The business circle in Ho Chi Minh city and Hanoi Capital is not too big. Building a good reputation for yourself will lead you to enlarge your circle and meet up with more prospects and potential partners.
The same principal applies for a B2C brand. Consumers will more likely try out a new product and have more trust for its quality if they know about and admire the brand owners.
For instance, a technology startup in Vietnam can collaborate with a technology-focused publication to publish articles that discuss emerging trends, offer insights into innovative solutions, or share case studies. By positioning themselves as experts in the field, the startup can build trust and attract potential customers who are seeking reliable and knowledgeable technology partners.
Conclusion
In conclusion, Vietnam’s entrepreneurial scene is ripe with potential, and those who seize the opportunities and embrace the challenges stand to achieve remarkable success. Armed with the knowledge and insights provided in this guide, aspiring and established entrepreneurs alike can embark on their entrepreneurial journey while both contributing to the economic growth and prosperity of Vietnam and achieving their own dreams and aspirations.
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