In the previous two posts of the “Navigating Vietnam: The First Steps Series,” we focused on the importance of taking a local approach, committing to understand positioning when exploring feasibility, and the need to provide early consideration towards defining your business’s model of operation when exploring new opportunities in Vietnam.
The next major consideration for businesses new to the market is to understand the local business culture and the importance of relationships to successfully overcome barriers.
Culture
Vietnam boasts a rich cultural heritage, deeply rooted thousands of years of tradition, customs, and social norms.
While developing a deep understanding of the intricacies of Vietnamese culture can take years of in-market experience for even the most seasoned international businessperson, a preliminary and contextualized understanding of business culture is essential for effective interaction with customers, partners, and stakeholders right from the start.
From business etiquette to communication styles, cultural sensitivity plays a pivotal role in building trust and relationships, and its importance cannot be overlooked.
If you are new to working in or with Vietnam, it is highly recommended that you become familiar with the basics of Vietnamese business culture as quickly as possible.
Some examples of areas to research include:
- Greetings and introductions,
- Meeting etiquette,
- General do’s and don’ts,
- Hierarchy and seniority,
- Preventing ‘loss of face, and
- Direct and indirect communication.
Relationships
Commercial success in Vietnam depends highly on the strength of relationships, which take time and genuine effort to establish through the building of trust, credibility and personal connection.
Vietnam is a high-context culture, which places an emphasis on the importance of personal relationships, and features important nuances through mechanisms such as non-direct verbal cues and non-verbal communication.
For businesses from abroad, this can be a very different experience from many Western cultures, where business is often conducted on a transactional level, based on direct communication and clear-cut arrangements.
In Vietnam, relationships, based on strong bonds and trust, take precedence. Personal connections and face-to-face interactions are highly valued, and are the foundation of successful partnerships, long-term cooperation, and mutual business growth.
Building relationships takes a genuine commitment. Visiting in-person once or twice a year is simply not enough. Significant time in-market is required if your goal is to develop these relationships from scratch.
Further, even the most simple endeavor requires many strong relationships along the way, ranging from government to supply chain stakeholders, and other involved third parties.
Barriers
Entering any new market presents inherent challenges, with language being a primary initial barrier.
Negotiating contracts and agreements requires navigating through verbal and non-verbal communication barriers, and doing business in a different legal and regulatory environment can be a challenge for any organization.
Language proficiency gaps can lead to misunderstandings, decreased business performance and financial losses, and are often a root dissuading factor for many Western businesses who come to Vietnam for the first time.
Therefore, it’s crucial not only to develop an ability to communicate in the local language – be it through a trusted translator or otherwise – but to also understand indirect and non-verbal communication cues.
Language and cultural barriers are real and tangible challenges, but are not insurmountable.
The same is true for potential barriers that pertain to the local legal and regulatory environment; the key to overcoming barriers in Vietnam is through a willingness to understand and adapt to local culture and through the development of strong in-market relationships.
The Bottom Line
For many businesses, embarking on a journey into a new market like Vietnam can be a daunting task.
Unfortunately, many become discouraged and give up, sadly oftentimes after just a single exploratory visit, due to initial barriers, resulting in missed opportunities.
If your organization is at the beginning of its Vietnam journey, The Herbers Agency is here to be your trusted partner in Vietnam from start to finish.
We are here to provide you with 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.
