Opting for a local distributor presents an opportunity for an economical, minimally hazardous, and expeditious approach to penetrate the Vietnam market. Nevertheless, the process of identifying a suitable distributor might pose challenges. This is everything you need to know about distribution in Vietnam and how to find a suitable distributor to start your sales in this country.
I. DISTRIBUTION MODELS
The typical patterns of product distribution for imports in Vietnam can be categorized into one of the following four models:
- Exporters => Importers/Distributors => Big Modern Retailers
- Exporters => Importers/Distributors => Wholesalers => Retailers
- Exporters => Local Agent => Importers/Distributors/Wholesalers => Retailers
- Exporters => Big Modern Retailers
The initial two models are prevalent in Vietnam as they entail fewer intermediaries. Opting for importers/distributors offers two additional benefits for foreign exporters: they are relieved of import procedural worries, and they can leverage the network of their Vietnamese counterparts.
There are no clear criteria to define if a company is a distributor or a retailer. They can be everything at once. Therefore, cooperation terms between brands and distributors will very much depend on a case-by-case basis.
While convenience store chains predominantly depend on domestic partners for imports, supermarkets, and hypermarkets frequently leverage their scale to conduct independent import operations. The figure below depicts the procurement approach of major modern retail chains in Vietnam:
|Saigon Co-op Mart
|Predominantly sourced from local producers, importers, distributors, and wholesalers.
A minor portion comprises direct imports of food and beverages.
Notably proficient in producing private-label items.
|Is primarily supplied by local producers, importers, distributors, and wholesalers.
Direct imports of perishable food products, including fresh and frozen items.
|Big C supermarket
|The primary sourcing is from local producers, importers, distributors, and wholesalers.
There is a direct import of perishable food products, including fresh and frozen items.
Notably adept in the creation of private-label products.
|Predominantly sourced from local producers, importers, distributors, and wholesalers.
Engaging in direct imports of perishable food products, including fresh and frozen items.
|The main sources of products are local producers, importers, distributors, and wholesalers.
There is also a direct import of perishable food products, which includes fresh and frozen items.
These are only models of wholesale distribution, not all the methods for foreign companies to enter Vietnam. You can also establish a legal representative office, or through FDI…, which is out of discussion in this article.
II. HOW TO FIND A DISTRIBUTOR IN VIETNAM
1) Understand The Market And Competition – The Foundation Of Every Business Strategy
Understanding the Vietnamese market is the first and foremost step in finding distributors. This entails thorough research into the industry, trends, and customer demands. You need to know your products fall into which category (for example, mass cosmetics or derma cosmetics, luxury or low priced…)
To identify appropriate distributors, businesses need to:
- Analyze the industry: Grasp information about trends, developments, and challenges within the industry to understand opportunities and obstacles. It is easier to sell trendy products rather than unfamiliar products.
- Identify competitors: determine how they are distributed in Vietnam using which model (wholesale distribution, franchise, representative office, etc.) and through which types of distributors. Learn from competitors’ experiences and mistakes to apply to their own business strategies.
- Discover untapped market opportunities: Look beyond competitors to identify market opportunities they might have overlooked.
2) Google Search & Google Shopping
Google Search has become the go-to platform for information gathering. When searching for distributors in Vietnam, businesses can employ the following strategies:
- Keywords and Phrases: Utilizing specific keywords and phrases relevant to the industry and product can yield more accurate search results. For instance, “electronics distributors in Vietnam” or “healthcare product distributors”.
- Local Context: Employing location-based keywords such as “Vietnam” ensures that search results are tailored to the intended market, filtering out irrelevant options.
- Company Websites: Browsing through the official websites of potential distributors helps in understanding their services, clientele, and distribution methods. This aids in making informed decisions.
Google Shopping adds a visual dimension to distributor search by displaying product listings and prices. Businesses can utilize this tool effectively:
- Product-Based Search: Searching for specific products and assessing the distributors listed on Google Shopping provides insights into who is active in the market and how products are distributed.
- Comparative Analysis: Google Shopping enables a side-by-side comparison of products and prices from various distributors. This aids businesses in making cost-effective decisions.
- Verified Sellers: Google Shopping often features verified sellers, providing a degree of reliability and authenticity that can influence distributor selection.
3) LinkedIn Leads You To The Decision-Making Persons
LinkedIn has evolved into a valuable arena for businesses to meet and establish relationships with potential partners. When seeking distributors in Vietnam through LinkedIn, businesses can follow these steps:
- Build a Strong Business Profile: Begin by updating and creating a professional business profile. Clearly describe your industry and the intent of finding distribution partners.
- Connect and Expand the Network: Connect with key players in your industry. Join groups and communities related to your sector to gather information and create networking opportunities.
LinkedIn offers advanced search tools that allow you to find individuals with relevant information regarding distributor searches in Vietnam. Utilize search by position (e.g., “Business Manager”, “purchasing manager”, “outsourcing manager”) and skills (e.g., “product distribution”) to identify individuals with compatible expertise. LinkedIn also enables you to filter search results based on geographical location, helping you find individuals close to or within your target area.
After identifying potential matches, you can build relationships using the following steps:
- Professional Connection: Send connection requests to individuals you wish to establish relationships with. Ensure that your connection request includes a message demonstrating your interest and objectives.
- Engage and Share Knowledge: Participate in discussions and posts within relevant groups. Share your expertise and perspectives to build credibility and attract interest from potential partners in Vietnam.
- Initiate Direct Contact: After establishing a relationship through online interactions, you can initiate direct contact via LinkedIn messages to begin discussions about potential collaborations.
4) Find Smaller Distributors Through Wholesale Websites
Wholesale websites serve as extensive platforms with well-established connections to diverse manufacturers and importers situated across various geographical locations. This expansive network acts as a gateway, providing you with access to a diverse array of distributor choices within Vietnam.
Distributors themselves utilize these platforms to effectively introduce their product portfolios to the market while simultaneously seeking out potential retail partners. This characteristic nature of wholesale websites facilitates a straightforward identification process, enabling you to readily assess distributors and their suitability for partnership with your brand.
Adding to their functionality, certain wholesale websites incorporate interactive features such as discussion systems or direct contact methods with Vietnamese distributors. This integration proves to be incredibly valuable, as it empowers you to initiate direct communication with distributors. This avenue of direct interaction facilitates inquiries related to collaboration possibilities, terms and conditions, and any other pertinent details.
5) Trade Shows & Exhibition Events
Exhibition events bring together a diverse range of industry players, which is an ideal environment to seek potential distribution partners. When seeking distribution partners in Vietnam through exhibition events, businesses can employ the following steps:
- Research and Select Relevant Exhibitions: Identifying industry-specific exhibitions in Vietnam is the first step. Researching events related to your product or service will ensure you connect with the right audience.
- Preparation is Key: Before participating, prepare an engaging booth that highlights your product’s unique value proposition. Having marketing materials, product samples, and knowledgeable staff is crucial.
Exhibition events provide a myriad of networking opportunities to connect with potential distribution partners:
- Face-to-Face Interaction: Exhibitions allow you to meet and interact directly with Vietnamese potential partners, fostering immediate connections and rapport.
- Industry Insights: Engaging in conversations with fellow exhibitors and attendees can provide valuable insights into the industry landscape, trends, and potential partners.
After the event, reach out to those who expressed interest in collaboration. Continue the conversation and explore partnership possibilities.
6) Seek Advice From Local Experts
In today’s business landscape, seeking and establishing relationships with distributors is a crucial part of business development. To accomplish this effectively, finding distributors in Vietnam through local experts has become a competent and efficient approach.
Local experts offer profound insights into the market, understanding competition, influencing factors, and consumer preferences in Vietnam.
They typically have wide-ranging connections within the local business community. Through their expertise, local experts can provide a deeper evaluation of each distributor’s capabilities. This enables businesses to make informed decisions based on accurate and detailed information.
7) Using Facebook Ads to Find Distributors in Vietnam
In the digital age, where online platforms play a pivotal role in business expansion, the utilization of Facebook ads has emerged as a powerful tool for locating distributors in Vietnam.
With its extensive user base and precise targeting capabilities, Facebook has evolved into an invaluable advertising platform. By harnessing Facebook’s ad features, foreign businesses can precisely tailor their campaigns to reach Vietnamese distributors. Facebook in Vietnam is also business vibe as Linkedin. Therefore, it is not surprising to reach distributors on this platform.
There are two ways you can find distributors through Facebook ads:
- You set up and run ads, targeting anyone related to purchasing, buying, and sourcing. In the ad, you showcase your brand, products as well and benefits for importers/ distributors. Don’t forget to add your contact and have a call to action for people to contact you.
- In Vietnam, there are numerous small and medium distributors who have recently invested in one or two international brands. Their primary focus lies in establishing their proprietary retail networks. They utilize Facebook ads to enlist retailers and local mom-and-pop shops to collaborate in selling the products across the country. Therefore, through these ads, you can spot potential distributors. After that, search for their website and contact information.
Effective ad campaigns necessitate compelling content. Foreign businesses should employ captivating visuals, succinct text, and persuasive messaging that conveys the business’s strength and benefits.
Besides, foreign companies should engage with users who interact with your ads. By responding to comments, messages, and inquiries promptly, you will have the opportunity to initiate conversations with potential distributors in Vietnam and build an initial rapport.
IV. YOU NEED A STRONG BRANDING TO SELL IN VIETNAM
1) Invest In A Localized Website
In today’s digital age, the utilization of information technology and the internet has become an integral part of business development and market access. Particularly, having a website helps distributors learn about you quickly and it also increases trust. It shows your seriousness to invest in the Vietnam market.
With over 70% of Vietnam’s population using the internet and the increasing trend of online shopping, having a website to showcase products and services allows exporters and distributors to tap into a vast market that was previously inaccessible. Consumers can also discover your products through websites. It is like a marketing tool that works day and night for you. However, to ensure the success of this strategy, investing in a website needs to be approached carefully and meticulously:
- User-Friendly Design: The website interface should be simple, intuitive, and easy to use. Distributors in Vietnam should have no trouble finding product information, prices, and contact details. Robust search features assist customers in quickly locating desired products.
- Display Detailed Products: Provide comprehensive information about products, including high-quality images, detailed descriptions, technical specifications, and potential user reviews to build trust.
- Engaging Content Creation: Offer valuable content related to your products or industry, such as usage guides, industry news, experience-sharing articles, and product selection guides.
- Customer Care Through the Website: Integrate support channels such as live chat, contact forms, or support phone numbers. This enables distributors to reach out and receive quick assistance.
2) Make Your Website Top Of Google Search
Distributors will check out your brand on Google. If they can’t find you on Google search, your website is a waste. SEO helps optimize online presence, enhance brand visibility, and facilitate effective interaction with potential clients.
SEO not only boosts your website’s position in search results but also contributes to building your brand. When your brand consistently appears in search result pages as a reliable source, it instills trust and credibility with customers.
3) Leverage Social Media To Engage Distributors and Consumers
In Vietnam, there are two most popular social media platforms, Facebook and TikTok,
a. Facebook – Showcasing Diversity and Interaction
There are 76.95 million social media users in Vietnam. The number of social media users in Vietnam at the beginning of 2022 accounted for 78.1% of the population, with Facebook users totaling 70.4 million people
Using Facebook to showcase your products and attract distributors:
- Showcasing Product Diversity: Create business pages on Facebook to showcase the diversity of the products you are offering. Images and videos help Vietnamese users better understand the products and establish interactive connections.
- Direct Interaction: Directly engage with customers through comments, personal messages, and other Facebook features. This fosters a closer connection between distributors in Vietnam and the brand, increasing the likelihood of purchases.
- Targeted Advertising: Facebook provides an effective targeted advertising platform. Businesses can select specific customer groups based on age, gender, interests, and online behavior.
b. TikTok – Youthful and Creative Platform
TikTok has rapidly become a phenomenon, primarily among young Vietnamese people.
- Creative Short Videos: TikTok revolves around short videos, providing foreign brands with the chance to create creative and engaging videos to advertise products. Short, captivating videos can easily go viral within the TikTok community.
- Interaction through Challenges and Trends: TikTok often features challenges and trends that gain popularity. Brands can leverage these challenges to participate and promote the products they distribute.
- Reaching the Young Generation: TikTok is a hub for many young individuals, offering businesses an opportunity to reach potential future distributors.
4) Build Trust By PR in Online Newspapers
Online newspapers have established themselves as credible sources of information in Vietnam. With an increasing number of readers turning to these platforms for news, insights, and updates, they offer an ideal avenue for reaching a wide and diverse audience.
- Native Advertising: Crafting PR content in a way that seamlessly integrates with the newspaper’s style can provide a native advertising experience. This approach makes the information more engaging and increases the likelihood of readers exploring the showcased products.
- Maintain Consistency: Continue to release PR content consistently to maintain brand visibility and engagement with your target audience.
These are trustworthy and notable newspapers for business: Cafebiz, Forbes Vietnam, Doanh Nhan Sai Gon, Tap Chi Kinh te Sai Gon, Vnexpress,…
You may wonder why you would do all of this marketing while your products are not present in Vietnam yet. Even if customers want to buy them, it is not available to ship. Please note that all of this marketing effort is to make your brand more well-known and have a good reputation. It makes it much easier to attract distributors and help them make decisions faster. Your marketing work proves that your brand and products have potential in Vietnam.
V. TIPS TO WORK WITH VIETNAMESE DISTRIBUTORS
1) Convert Materials into the Vietnamese Language
To effectively reach and engage the Vietnamese market, it’s essential to translate your materials into the Vietnamese language. This process involves transforming your existing content from its original language into Vietnamese to ensure clear communication and resonance with the local distributors.
Communication breakdowns can have substantial repercussions on business interactions, potentially leading to serious outcomes. When international companies share product information, pricing specifics, or contract terms in a language unfamiliar to Vietnamese distributors, vital details run the risk of being misunderstood or misrepresented.
2) Fast Response
When a Vietnamese distributor contacts an international counterpart with an inquiry regarding product availability, a delayed response spanning several days or even weeks might be perceived as “unresponsive.” Such a delay can prompt frustration for the Vietnamese distributor, who could construe the tardy reply as a sign of diminished enthusiasm or dedication. Moreover, this lag can disrupt operational continuity, impede decision-making procedures, and potentially lead to overlooked business prospects.
In essence, maintaining a swift response time is pivotal for nurturing effectively.
3) Provide Free Samples
In Vietnamese business customs, providing complimentary product samples is a traditional norm. This practice embodies goodwill, transparency, and a readiness to invest in the prospective collaboration. Offering free samples showcases foreign distributors’ dedication to fostering a cooperative alliance and capturing the interest of their Vietnamese counterparts.
4) Flexible On Pricing & Minimum Order Quantity
Expressing a strong commitment to fostering a successful collaboration, foreign brands emphasize your readiness to flexibly adapt and accommodate wholesale pricing and minimum order quantities, specifically tailored to match the preferences and operational needs of our esteemed Vietnamese distributors.
This approach underlines your dedication to establishing a partnership that is not only mutually beneficial but also fully responsive to the distinctive market conditions and business landscape in Vietnam. By embracing this flexibility, you aim to forge a lasting and productive alliance that aligns seamlessly with the goals and aspirations of Vietnamese distributors
5) Provide Some Of Your Sales Numbers Performance In Different Markets
Presenting your previous sales achievements in diverse markets, makes your brand look very promising to distributors.
This insight not only highlights your brand’s global reach but also instills confidence in Vietnamese distributors, that they can also sell your products successfully in Vietnam with your support.
In conclusion, the process of finding distributors in Vietnam requires a strategic and multi-faceted approach. The dynamic and competitive business landscape of Vietnam demands careful consideration and tailored strategies to identify partners who align with your business objectives. By leveraging personal networks, attending industry events, utilizing business consulting services, exploring online platforms, and employing targeted online advertising, businesses can effectively connect with potential distributors.