Inspired by the book "One Billion Customers - Lessons from the front line of doing business in China" I want to create this thread to discuss and share knowledge and experience about doing business in Vietnam. Please be constructive when making your comment.
I highly encourage anybody here to post any meaningful article you have come across about successful or failure investment in Vietnam.
Below are experiences shared by an foreign investor Kent Sears.
http://www.vvg-vietnam.com/sears_art.htm
QUOTE
Nearly [four] years have passed since the American trade embargo against Vietnam was lifted. Today, results being posted on foreign business scoreboards, especially for Americans, are in many instances downright disappointing. Some are viewed as flat out failures
Tales of woe circulate in the watering holes frequented by foreigners, with vivid accounts of projects delayed; goals not attained, scuttled schedules and busted budgets. Clearly there are lessons to be learned from the past three years.
In mid- l997 I participated in an information gathering exercise conducted by a major American corporation which was seriously considering entering the Vietnam market. As part of this effort, the client sent an executive out from the company’s US headquarters for a short tour of Vietnam during which the Executive interviewed 11 senior expatriate managers with verifiable successful Vietnam experience.
Use Your Time Correctly.
In the interviews, it became apparent that all these managers believed that it took at least three years here before they felt they could actually make things happen with even the slightest degree of predictability. It takes three years, they said, to gain the necessary knowledge of local conditions, to build-up trust and to develop the right kind of relationships.
Those relationships are important. Foreigners tend to put a lot of emphasis on spending their precious time dealing with and negotiating the more formal legal aspects of their Vietnam business ventures instead of spending more time on the really productive aspects such as making friends, building relationships and getting to know how things actually happen.
Key Points to Remember.
Apart from that and the ubiquitous lack of reliable information in Vietnam, I would say that new foreign investors coming into Vietnam should never forget the following:
• Many foreign companies come here with little or no idea of the amount or time it takes to get into the "making-things-happen" mode, and many if not most foreign management and technical people arrive without any useful orientation on what really to expect here. As a result, ventures are generally woefully under-budgeted, and the management lamentably unprepared for the realities of Vietnam.
• Typically, foreign managers come with a plan developed elsewhere and they try to either force it to fit into local conditions in Vietnam; or otherwise attempt to alter it to fit into the situation as they imagine it, Goals and objectives are necessary But you can't simply bring an organization's policy annuals detailed business plans and standard operating procedures into Vietnam and expect them to work (at least, in your favor).
• Assigning people with experience in other Asian Countries such as China, Thailand, Indonesia or the Philippines doesn’t always work. Especially if they are convinced that they have the answers to Vietnam’s challenges, even before they know what the questions really are.
• Failing to understand the differences between doing things and getting things done can also be a problem. There are many things in Vietnam which only the Vietnamese can accomplish and it is absolutely essential that foreigners understand the difference.
The Investment Fund Experience.
Perhaps nothing illustrates foreign failings in Vietnam more than the poor performance turned in by most of the investment funds. Since the funds came in early with plenty of ready cash, they could have staked out a profitable position. In fact, some have managed to achieved just the opposite, with at least one throwing in the towel. I would argue that some of their problems were painfully predictable.
Some of the funds employed people with little or no business experience either in investment banking or other relevant fields,. and no experience in Vietnam. They were then saddled with investment criteria developed elsewhere by people who have never set foot in Vietnam. Given these circumstances, the problems are not so surprising. It would be wrong to blame Vietnam, or the Vietnamese.
The Best Use of Agents. Potential new investors should also not underestimate the importance in Vietnam of agents, advisors, consultants and other intermediaries. Many companies simply refuse to countenance the idea, relying instead on [their own in-house] representatives on the ground. But it's important to understand that intermediaries have always been valued in Vietnamese society, which traditionally stresses harmony in inter-personal relationships
The Vietnamese tend to equate directness with dis-courteousness and consider subtlety a more pleasant norm of approach Intermediaries have traditionally been used for all affairs of consequence, including arranging marriages. Vietnamese are comfortable using proxies for a variety of reasons, not the least of which is status.
The choice of a particularly astute, influential or powerful mediator reflects favorably on the principal. In addition, this method of conducting business also eliminates the possibility of someone having to risk losing face by being confronted with a question he or she is not prepared, for whatever reason, to answer
I find it astonishing that foreigners often assume they are capable or coming to the country and conducting effective face-to-face negotiations with the Vietnamese, when in fact the Vietnamese themselves do not deal directly with one another.
And for those already here, I argue that we shouldn't lose sight of the long-term objectives, and should focus on the countries three most positive assets: the people, the resources and its location.
• The people are exceptionally intelligent, disciplined, eager to lean, well-organized and extremely industrious.
• The country is well endowed with natural resources.
• In spite of the recent, substantial financial turmoil in parts of the region, Vietnam in the center of East Asia on the South China/East Sea, is still situated in the center of the fastest growing economic region on the earth.
For those people with perseverance and patience, the future looks bright.
