In this article, we will outline two initial topics that are essential for any organization seeking to explore new opportunities in Vietnam to consider: The importance of a focused, localized approach, and the associated commitment required to properly understand the market and what that means for your positioning.
Regional vs. Local Approach:
Vietnam must be approached with a profound respect for the unique place that it is. Indeed, present-day Vietnam is a unique tapestry, woven from its rich history, vibrant culture, and contemporary business landscape.
For many businesses and organizations, explorations in Vietnam often begin as part of a trip to several markets in the Asia-Pacific Region.
While it’s perfectly logical to explore different markets simultaneously, especially at the early stages identifying your best-suited markets, an early-stage commitment must then be made in order to properly test and understand your likelihood of success if Vietnam is within the lens of focus.
The first pitfall to avoid is the temptation to view Vietnam as homogenous with the other nations within the region – the ill-fated “one-size-fits-all” approach.
In other words, the chances of being successful in Vietnam without dedicating the proper time and resources, or by employing a regional strategy, are slim.
From the start, it is vital to take the time to properly understand Vietnam’s:
- Unique business culture,
- Regulatory and legal environment,
- Industry trends,
- Competitive landscape,
- Regional differences and advantages,
- Purchasing patterns and production capabilities,
- Stakeholders relevant to your industry,
- Key challenges and opportunities relating to your sector,
- And much more.
Be it for business development or production and sourcing – there is an inherent requirement for patience and a willingness to dedicate moderate resources to the initial exploration process if you are to find your success in Vietnam – which leads to the next point.
Feasibility and Strategic Positioning: The Linchpins in Navigating Vietnam’s Market Terrain:
Where does a local approach begin? Success in Vietnam hinges on a well-founded understanding of your organization’s potential position within the country from the beginning.
For those considering Vietnam as a potential market for their product or service, understanding the landscape is paramount. This, of course, can take time to develop, especially for organizations who do not yet have a presence in the market, given the need to be on the ground to build this knowledge.
Examples questions to test your understanding and frame of reference for the market include:
- “Who are your competitors?”
- “Who are your customers, and how do you reach them”
- “What is the real market size?”
- “What influences purchasing decisions?”
- “What pre-existing market relationships or other structures may help or hinder your potential success?”
Without a proper, well-researched and market-tested understanding of questions like these, it is likely that a project’s wheels will spin indefinitely, or worse, fail outright.
For businesses looking at Vietnam as a supply chain solution, be it for sourcing or production, it is essential to understand Vietnam’s natural and structural advantages and challenges, and how they may be used to ensure feasibility of your project.
Frame of reference questions for these projects may include:
- “Are input materials readily available, and where do they come from?”
- “What are the associated tariff and tax implications?”
- “What level of production capabilities are required?”
- “What regions of Vietnam specialize in the desired field of manufacturing?
- “What logistical considerations are at play?”
- “How will quality control be managed?”
- “What production model(s) may or may not work, and why?”
The Bottom Line:
It is essential to dedicate the time and resources to develop a proper, localized understanding before embarking on what could otherwise become a very costly lesson in finding out information the hard way – once it’s too late.
Success in Vietnam hinges on groundwork and dedication. Patience, coupled with a meticulous understanding of the local landscape, are the starting points of the recipe.
While this can appear daunting, especially if your ability to be in-market is limited, the good news is that there are solutions available to bridge this gap and minimize costs.
The Herbers Agency is here to be your trusted partner in Vietnam from start to finish. We can save you time, money and prevent headaches through tailored solutions to help position your Vietnam journey for success. Contact us today to schedule a consultation to get started!
Curious about the next step? We look forward to sharing our next installments of the Navigating Vietnam: The First Steps Series. Stay tuned for our latest posts on The Herbers Agency Insight Page and our LinkedIn Page.
Here’s a sneak peek into the next topic: [Models, Local Insights, Cultural Considerations, and Relationships…]
