Communicating in Vietnam

Coming to Vietnam and doing things the way you did them back home simply won’t work. The best case scenario is that your local staff will undermine you at every opportunity, and the worst case scenario is that you will lose money, time, and an opportunity to build a relationship. Make no mistake: you will get figuratively smacked in the face if you come here with a western attitude and approach to solving problems.

Vietnam is notoriously difficult for doing business; the cards are stacked against foreigners. The laws favor locals, contracts don’t hold nearly as much value as back home, and you are a walking Euro or Dollar sign to many people here.

Many business deals in Vietnam are done in a venue: a bar, karaoke, restaurant, etc. But to get to that point any lasting relationship in Vietnam begins with a coffee meeting, usually after an introductory meeting through mutual friends in a comfortable setting.

Another route to that initial coffee meeting might be through a networking event usually run by a national Chamber of Commerce. These are relaxed settings for meeting anyone who has business interests in Vietnam. Business cards rule in Vietnam; you can get about 200 quality cards for $15 in Hanoi. You may find that at networking events people might pay more attention to your title than your company’s name. They are either sizing up decision makers as potential allies or trying to decide if you are older or younger than you look.

Vietnamese society is built on age differences and age distances. Whether someone is older or younger than you determines how you address them and how they address you. Vietnam is a patriarch-oriented society so the most revered member of every family is the grandfather.

This patriarch authority/respect is reflected in the business world by the relationship between a manager and his/her subordinates: it is a one-way downhill street. Vietnamese workers are almost wholly submissive to leaders and managers. A teacher, boss, or whoever is in a position of power is almost never challenged by their subordinates. If, as a stakeholder, you point out a potential problem don’t expect any pats on your back. The response you might get is more of an antagonistic one for pointing out problems where there were seemingly none before.

Schedules, for the most part, are guidelines unless you have a different prior experience with the schedule presenter. Furthermore, contracts don’t really mean anything either which is part of the reason why the Memorandum of Understanding (MOU) is preferred in Vietnam. A contract here is an acknowledgement of a relationship that both parties agree to put effort toward maintaining. Why? Because enforcing them is much easier said than done in this legal environment and usually, whoever is better connected wins the case if it’s brought before a judge.

For one, Vietnamese don’t like to email—they prefer texting, and in-person meetings most of all. Therefore, it can be tricky to establish a “paper trail.” Even if you get your local partner to sign off on something, it is not guaranteed because the task might not even be done. Communicate requirements via email, text, phone, in person, and demonstration and the other party will almost always say they understand. Ask if something has been done and the response will almost always be yes. But if you go and check the task’s status, then it might not have even been started yet.

The best way to spot problems is during the process not after. Don’t take deadlines or statements at face value here.  Vietnamese are generally shy—especially in groups. They won’t ask questions if they don’t understand something unless they absolutely have to—which means often things are not done correctly the first time. And no way would one Vietnamese ask another coworker for clarification of a certain process for fear of looking stupid.

Motivating local workers is a challenge: some companies try to communicate family/work life balance, reasonable hours, and opportunities for advancement (based on meeting goals) to their workers. But for the average Vietnamese company, there isn’t much training or development available other than “learn as you go,” if at all. Expect to have lots of interactions “lost in translation” unless you have an awesome interpreter or your counterpart understands your language fairly well. The challenges presented in doing business will be the culmination of differences—differences of visions, standards, expectations, languages, culture, and ultimately, opinions. At times you will be frustrated. However, it will be a learning experience and a valuable education for doing business in Vietnam. The onus will be on you to respond to misunderstandings, unreasonable requests, and perceived rudeness with grace since you are a guest in Vietnam.

Finding a trusted local partner is perhaps the biggest challenge of all in Vietnam because through him/her all things are easier. There are several circles of expats in Hanoi and Saigon: NGO, Diplomatic, English Teacher, Entrepreneur, and Startups. Find someone who has been here longer than you to help guide you toward potential trusted partners or else you may be burned on your first or second time around.

Understanding the Vietnamese mentality is a major part of making sense of the responses here. They are generally risk averse for formal businesses unless gambling is involved. If your audience has not seen something done before in Vietnam then it is not possible for that business model to exist no matter how much you try to convince them. “If it was possible then someone would have done it so since no one has done it before then it’s not possible.” That’s why there are so many copycat retail stores on the same street.

The other reason they are risk averse is because failure is shunned so much as a result of losing face. Disagree in private when possible and explain that you cannot give in on that particular position. Vietnam is not the place to point blame and determine who is rightfully responsible if you want a deal to stay on track and relations to stay positive. It will take working together to move forward for everyone’s benefit—and it needs to be a win, win, win situation or else you will lose.

Needless to say, you will save time by learning the language—although it is very hard with a western tongue. Some expats rely on their local wives or a personal assistant to translate. Try to at least be proficient with the numbers and guidebook Vietnamese.

Overall, Vietnamese are proud people—they have a long history of self-assertion and self-determination. Learning the language is one way to get a better understanding of Vietnamese. They will respect you for it and give you the benefit of the doubt more often than not if they know you took the time and effort to learn their language.

Even though Vietnam is changing and modernizing, an element of “traditional Vietnam” still exists. Keeping an open mind and keeping politics to a minimum is a pretty prudent way forward. Don’t get discouraged by setbacks or partnerships falling through—it happens everywhere. Learn from your mistakes and be better prepared for the next time in a similar situation. Above all, keep knocking on and opening doors in Vietnam to see which one fits you best—if you stay here long enough then eventually one will.





E-Commerce in Vietnam

With a population of over 90 million, there is no doubt that the middle class in Vietnam is growing; in 2012 the middle class consisted of 8 million people and consumed $46 billion[1] up from around $20 billion in 2004.[2] Today, Vietnam is the 13th most populous country in the world—and almost one million people are born here each year.[3]

The mobile phone (and smartphone) continues to rise in Vietnam. There are approximately 140 mobile cellular subscriptions for every 100 people in Vietnam.[4] Vietnam is the second-fastest growing smartphone market with approximately 13 million iOS and Android users as of 2013. 40% of those are iOS users.[5] Mobile phones will soon overtake PCs as the most common web access.[6] According to 3rd party app store Appota, “on average, mobile users consume 4.5 hours of media daily of which 35% is on mobile devices.”

In terms of social media, Vietnam is one of Facebook’s fastest growing nations. Facebook has over 70% penetration rate for internet users which equals approximately 22 million people.[7] Furthermore, Google officially entered the Vietnamese market by establishing AdWords here in early 2013.

E-commerce is growing but consumers still prefer cash on delivery (COD) payment for online orders. For the most part, consumers are simply unwilling to use their credit cards. Of the total $700 million in e-commerce sales in 2012, only 11.8 percent of online consumers used a non-cash payment method.[8] For 2013, 74% of all online consumers had used COD as a major payment method.[9]

Why? Because consumers are suspicious about the quality of the products they have ordered and want to inspect the item before paying to make sure it’s what was advertised. Even at retail stores, buying a $15 rice cooker or $10 electric kettle may result in the floor staff taking out the item from the box and plugging it in, thereby proving to the consumer that it does indeed work.

As with much of Asia, the society here on a public level revolves around the concept of “glamour” or being able to show off that one is successful (which is closely tied to “saving face,” another HUGE deal in Vietnam—that can’t be stressed enough). This theme can take shape in several forms: ostentatiously counting money when one (usually the oldest male member at the table) goes to pay the bill at a restaurant, aggressively pushing past those already queued up to show that one doesn’t need or have time to wait around, or belittling service staff in front of others. Successful Vietnamese are willing to spend big money on luxury cars as they are often twice or thrice the price of the same or comparable model in the United States. However, wealthy Vietnamese also love a good deal and some may feel entitled to not pay the same price as everyone else (looking for special price) due to their VIP status. As for the normal folks, they will have to make do with daily deals sites.

Vietnam’s Groupon (Nhom Mua) skyrocketed in recent years, reaching over $30 million in total revenue in 2011 and over two million users in 2012—but ultimately crashed. Customers and merchants are generally wary of the group buying facilitators due to a history of mismanagement of the former leader, a large number of clones, and the customers that they drive to businesses are usually one-time consumers.

Generally, Vietnam is still a largely cash-based society so due to inflation there are some large denominations ranging from 100 to 500,000 Vietnamese dong (VND), with the latter being worth about $25.

Some figures about the local market:

  • Total Advertising Spending in Vietnam is a $770+ million industry.[10]
  • Digital Advertising Spending in Vietnam is $40+ million.[11]
  • E-Commerce spending was over $300 million by 2011[12] and has the potential to be over $2.5 billion by 2015.[13] Some estimates project that e-commerce spending can top $4 billion by next year.[14]

The challenges ahead for e-commerce in Vietnam are for consumers to be more comfortable using credit cards, the negative reputation Vietnam has for fraudulent activities in payment processing, and establishing effective trust verification and logistics systems for fulfilment as volume increases. New solutions and incentives different from those in the west will have to be proposed to Vietnamese consumers in order to entice them to embrace e-commerce more efficiently and wholly. As with most things, it boils down to trust.

For more information on the state of e-commerce in Vietnam see here:

[1] OECD

[2] McKinsey & Company

[3] The World Bank

[4] The World Bank

[5] Appota

[6] Nielsen

[7] TechInAsia



[10] IMF

[11] Appota


[13] PwC


Why Vietnam?

Hanoi, Vietnam

If you’re an American, then the first thought you might associate with “Vietnam” is “war.” In the last ten years and even more recently, the memories of the Vietnam War have resurfaced in the United States as American policy makers and analysts have drawn comparisons between it and operations in Iraq since 2003. However, it’s been almost 40 years since Saigon was renamed as “Ho Chi Minh City” (and even today both names are synonymous).

A hackathon in Hanoi.

Today’s Vietnam is very different than most Americans may perceive it to be. Vietnam can surprise, frustrate, humble, and charm one to wild extremes. But, there is something enchanting about this place which can take some time to begin to understand.

Across the country, modern Vietnam is rising next to traditional Vietnam.

Since Vietnam joined the World Trade Organization in 2007, the country has changed drastically and will continue to change as the middle class rises. In a way, Vietnam’s official policy is a forward-looking one, as evidenced by recent investments in e-payment gateways (POS), entrepreneurship, and infrastructure.

Hustle-and-bustle in Saigon, the city of entrepreneurs.

There are a growing number of smart phone users, growing purchasing power, and hyper-brand conscious consumers continue to fill malls and shopping centers that are as impressive as they are large (such as Vincom Mega Mall Royal City in Hanoi and Crescent Mall in Saigon).

In major cities there’s a good chance that there will be free WiFi anywhere you go.

Overall, the shift in Vietnam continues to be toward the west—consumers crave western brands, products, and experiences. As more people move into the middle class, they will be able to afford and acquire products and services that they previously could not have. Now is the ideal time for consumer brands to position themselves so that when rising middle class takes off the choice for consumers with new spending power will be clear: to buy from trusted brands.

A trendy bar in Hanoi.

Ultimately, the technology and infrastructure for consumer-centric startups to be successful is already here; for example, the economic gap between US and Vietnam is huge but there are iOS devices, WiFi infrastructure, and mobile phones everywhere.

There is growing opportunity in Vietnam and Asia in general. That’s why we’re here—because the future is here.