Stepping into a new market can be confusing as you’re dealing with a new culture, new mindset and unfamiliar way of working. What applies in your country might not be relevant to other markets and the local employees you’re going to hire. For companies that are planning to enter Vietnam or want to know this market but don’t know where to start, this article is the one for you. Here are some head-ups for multinational companies to keep in mind when venturing into Vietnam.
Mind the differences
First, brand message and business operation should adjust to the local norms and culture. With a history that dates back more than 4,000 years, Vietnam is a very high-context country with its own social norms. The local people prioritize their tradition, what they always do and feel and like. When working with local employees or pitching a product to local customers, foreign brands should be aware of these. Making a mistake or disrespect these norms might lead to discomfort, or even a large-scale boycott – which is now very easy thanks to the cancel culture and the adoption of social media.
- A Vietnamese energy drink once received backlash for its offensive TV commercial called “Mình uống đi, cho khỏe (Drink up and stay strong, honey)”. The commercial feature a few comical situations in the daily life of a Vietnamese ethnic minority couple. In the story, each time the husband would go work in the mountain or do daily household maintenance, his wife would offer him the energy drink to give him more power. The problem is the ending scene! When the couple gets ready for bed, the wife once again gives an energy drink to her husband to “boost his stamina,” implying that the couple will have sex. The commercial was broadcasted on Vietnam Television (VTV), the largest television broadcaster of the nation, in the evening golden hour. This sparked controversy as Vietnamese culture is still conservative toward these issues. Many criticized the brand for exposing young children to inappropriate content. It was also accused of disrespecting the ethnic minority in Vietnam.
Going against traditional cultural values can damage the brand severely. In the worst-case scenario, it could signal the end of your business or your career.
Second, Vietnamese people prioritize personal relationship:
- Business meetings: In the first business meeting, your Vietnamese partner might expect to build personal connections and mutual trust rather than discussing business decisions. Having a high-context culture, their business decisions can even be based on how they see you as a person outside of the business.
- Social connections: It is easier to approach Vietnamese business owners and build a relationship with them if you have a common connection. Therefore, having someone credible introduce you to local partners is a good way to kick start the partnership.
- Daily conversation: Vietnamese usually exchange their personal life and family issues and considered that this is friendly. So don’t be taken back if they ask you these private questions.
- Seniority & hierarchy: Most companies in Vietnam adopt the principle of top-down hierarchical structure. So remember to respect people according to their age, education and job position. When it comes to meeting with a Vietnamese partner, you should always introduce yourself to the eldest person or the one with the highest position.
- The concept of ‘face’: While Westerners value frank and direct qualities, Vietnamese are not quite open-minded to this approach. Direct disagreement or raising questions in public can cause a person to “lose face” in Vietnam. In other words, damaging their reputation, dignity, and prestige in the presence of others is not welcomed.
- Because of this culture, they can agree with you on the outside, but not the inside. This is what is considered polite in the local culture.
To conduct business with local stakeholders (partners, employees, government officials, etc.), be sure to learn your Vietnamese business etiquette to avoid getting on their blacklist.
Finally, while social media is on the rise, traditional media is still trusted by the public, so knowing the media landscape and how the media work could be an advantage. Reporters prefer to work with local people, so it is recommended that foreign brands have a local representative to build relationships with them.
Steps to not make a fool out of your business before the Vietnamese public
The short answer is working with a local agency!
Nevertheless, the longer answer, there are four things we recommend our clients do when they have their first idea of entering Vietnam.
- Market research: This will help identify and analyze the market’s size, demands, competition and more.
- Business match-making: Identifying relevant business opportunities and establishing connections with reliable potential companies in the local market.
- Market visit: This is the most essential step for a foreign company to build trust with a local partner, strike the right deal with the right partners depending on their unique requirements, budgets and business objectives.
- Marketing support: Most Vietnamese partners, especially importers and distributors, would need some help from the international partners to conduct some initial marketing activities, to get the brand name out there, to build awareness and to give a little boost when the business first launches.
Beyond companies’ need for market entry support, EloQ’s team of seasoned experts and creative professionals in PR, social media marketing, digital marketing and strategic planning could be of further service to the client’s progress of developing, cultivating and maintaining a strong brand image and an enhanced presence in the local market. The agency’s past successes with companies in the Fortune 500 list and multinational corporations from more than 30 cities and regions, including Viber, Intel, Grab, Lazada, Fiserv, Cargill, Booking.com, Alipay, and Duolingo, is proof of their service quality.
By Hanh Le, Assistant to Managing Director at EloQ Communications. Hanh is supporting EloQ in connecting and maintaining relationships with more than 10 partner agencies in Asia and other global PR networks to execute global projects, as well as to leverage service quality in the communications industry. The article was originally posted on EloQ’s blog.