Here are five things to look out for if you are doing business with a Vietnamese partner:
- Whether on business cards or in a signature, the surname is always placed before the given name. When one addresses a Vietnamese person however, the given name must be used, preceded by Mr or Mrs or their title of preference. For example, Nguyen Van Tuan, the director of a company should be called Director Tuan or Mr. Director but never Director Nguyen (as in many other Asian countries). The same rule applies when speaking of someone.
- It is advisable to engage in written correspondence prior to meeting a partner. Correspondence should be written in a very formal style. Moreover, the younger the relationship, the bigger the emphasis must be on the format instead of the content. They should always end with an exchange of civilities and formal greetings.
- Your Vietnamese partners will expect to receive gifts during the first meeting. There should be enough so that each of the participants can have one. They can be small and not very expensive, something with a company logo for example. If the gifts are of different values, then the most expensive should be given to the most senior participant.
- The society has a collectivist nature and thus a Vietnamese could be embarrassed if he receives public praise because it alienates him from his colleagues. It is thus preferable to do it in private, in a diplomatic way and in the presence of an intermediary.
- The personal and social distance at which Vietnamese feel comfortable is much larger than in North America. In addition, they don’t appreciate physical contact.
Throughout Vietnam, recent economic growth has benefited a certain portion of the population who has actually seen their purchasing power increase. Indeed consumers are becoming more open to novelties and diversity, especially those under the age of 30 who represent more than 50% of the population. Foreign brands, perceived to be of better quality, are warmly welcomed by wealthier people. In order to benefit from these opportunities, it is important to take into consideration certain idiosyncrasies of the Vietnamese market.
Also, recent economic growth has contributed to the emergence of a bigger class of wealthy people. This wealth is concentrated in urban areas: the GDP there is six to eight times higher than in rural areas. More than a third of the urban population (Hanoi / Ho Chi Minh) are now a part of the upper-middle class.
Furthermore, it is necessary to geographically divide the market into parts according to the product or service that is to be offered. It is in Ho Chi Minh that consumers are most fond of foreign brands. In fact, more than half of foreign consumer goods are bought there. On the other hand, foreign companies specialized in infrastructure development (energy, environment, aviation, telecoms, etc.) should be looking more towards Hanoi, as it is where the majority of state company’s headquarters are located, which are responsible for a significant proportion of total imports.
Attitudes towards brands differ from man to woman. Women shall choose products based on efficiency (perceived), whereas men choose certain brands in order to project an image of success and social achievement.
In all cases, it is important to remember that although brands influence the decision-making process of the Vietnamese consumer, he remains very sensitive to the price. It is still the number one criteria when it comes to making a purchase decision.
Source:U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2008.Read More
Canada-Vietnam trade has increased significantly in the last decade. In fact, trade value vastly surpassed $1 billion in 2008: Canada imported $953 million while exports reached almost $317 million. In that same year, Canada was the sixth largest investor in Vietnam. Agriculture, agri-food, education, training, the forestry industry, IT and communications are the sectors that offer the best opportunities for Canada.Read More
In 1986, the Vietnamese communist party undertook a reform process (renovation policy “Doi Moi”) aimed at progressive market liberalisation to favour an increase in productivity and the growth of exports. Since then, Vietnam has developed itself in a phenomenal fashion and has achieved enormous progress in the eradication of poverty. The country has switched from survival agriculture to export agriculture. 52% of the active population works in this sector. Its economy has also become more diversified. The part of GDP generated by the agricultural sector has reduced from 42% in 1989 to less than 20% in 2008. Although the private sector is expanding, state companies still oversee the majority of industrial production, which represents over 40% of GDP.
There is still a lot of progress left to be made before Vietnam catches up with the more developed ASEAN countries. Nevertheless, its membership of the ASEAN free-trade agreement (AFTA) since 1995 and more recently of the WTO shows the willingness of the authorities to stabilise its economy.
Source: Economist Intelligence UnitRead More
Composed of more than 54 official ethnic groups, the country takes its name from the majority group, the Viet. The official language, Vietnamese, is their mother tongue. Until the 18th Century, the writing system used Chinese characters. The system was romanised following the arrival of Western missionaries and is still used today. Although Vietnam is part of the French-speaking world, French is only spoken as a second language by about 100,000 people and one very small French community. English dominates over French in terms of languages learnt.Read More