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Vietnam Today

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Vietnam means different things to different people—some of these perceptions change every day, every year, or every visit and some of them remain frozen in time.

Tradition. An untapped opportunity. A glorious past. Increasing competition. The Fatherland. Independence. Echoes of war. A bright future. A rising dragon. The party. People of the sea. Resilience. Freedom. Children of the mountains. Liberalization. Home. Happiness.

So, what is Vietnam today? This post attempts to encapsulate daily life in Vietnam as a snapshot of some of the most common sights, sounds, and experiences in the country today. Some items on this list are not exclusive to Vietnam (or even Asia) but they are still noticeable in daily life in a major city like Ho Chi Minh City or Hanoi.

Vietnam is the land of…

1. “Selfies”

If you go out one night in either Hanoi or Ho Chi Minh City, you’ll probably find people taking selfies or self-captured photos. There are certain requirements for where and when one should take a selfie, including being with a significant other, before eating, being with friends, and generally anywhere and everywhere in between. The ubiquity of smart phones in Vietnam allows for the endless flow of media experiences to be captured, shared, and commented on to form an constant feedback loop.

2. Cafes

The cafe is an important part of life for Vietnamese. They are used for a bunch of core activities including meetings, relaxing, literally sitting around, playing games (multiplayer and single player), and to communicate status. Some common drinks are cafe sua da (also known as cafe no da in the north), xinh to xoai, and tra da. The cafe culture here is strong, rich, and all-encompassing but still very different in parts of the country.

3. iPhones

Not just smartphones, but Apple iPhones. These devices are seemingly everywhere and can be seen used by celebrities as well as (some) shopkeepers and street vendors. One way that the number of iOS devices increase in the country is through family: as people upgrade their handsets to the latest models, they pass on their older models to family members. There are millions of iOS devices in Vietnam but the app marketplace is largely fragmented with third party app portals.

4.Honking

A sea of traffic, clouds of exhaust, and incessant honking. Many Vietnamese drivers seem to use the horn simply because it is there. Another large portion seem to use the horn as if were sonar by sending out “pings.” The horns here seem to be at least 30% louder than US models and we could see custom horns emerge here similar to how there are custom ringtones for phones.

5. Wi-Fi

There is no need to ask if a venue has WiFi since it’s more efficient to ask what the password is (usually 12345678 or some similar variation). Almost every cafe or restaurant provides free Wi-Fi (that works when an undersea cable isn’t damaged). The widespread availability of Wi-Fi could pose a cyber security risk in the future, especially if the lax attitude toward privacy continues here.

6. Motorbikes

Vietnam is the world’s fourth largest market for motorbikes. During rush hour, motorbikes form rivers, which larger vehicles attempt to ford or cut through with impatience. Trying to navigate an intersection with other motorbikes is probably akin to being in a mechanized phalanx. Companies like Yamaha Motors Vietnam need to position themselves carefully considering that the Vietnamese dream is to drive to work in a car.

7. New construction

Drive around Hanoi and you can hear and see the future of Vietnam. Fly into Ho Chi Minh City and you can see the cranes that dot the city from above. Some future projects will be added to an already large real estate inventory (with outrageous prices per square meter) while smarter developers will find ways to differentiate their projects via advanced automation, control, and integration technologies in buildings to benefit end-users (and ultimately, to increase ROI).

8. Recycling

“Reduce, Reuse, Recycle” here is “Resell, Reuse, Repurpose.” Empty water bottles are collected and sold to recyclers. Anything that is not completely broken or destroyed is used or repurposed until it falls apart. It’s one of the most efficient aspects of Vietnam—especially when contrasted to some western habits of instantly replacing or upgrading appliances.

9. Name Brands

Nouveau riche are rising in status and increasing in numbers. Of course they are flocking to luxury brands but some lack the sophistication that usually comes with style. As they say, “money doesn’t buy class” so there is opportunity for etiquette schooling and training, especially in the north.

10. Youth

Young people are everywhere and although there are far too many banking and finance majors, they are the future of Vietnam (as cliched as it may be). A segment of them are break dancing, popping, locking, and dropping their ways into adulthood while those studying STEM subjects seem to be diving headlong into startups and IT outsourcing. Right now, many young Vietnamese idolize KPOP stars and are hungry for American culture—but they will all eventually craft their own styles.

11. Touch

Personal space does not exist here. Touching, at times inappropriately (from western point of view), is a way to communicate (since much of Vietnamese language relies on context). Couples (not just romantic ones) can be seen walking together in a semi-drunken stagger while talking loudly, laughing, or sharing some inside joke.  Be prepared to “pinball” off some people in crowded public spaces as space is at a premium. Co-workers regularly and playfully slap each other; a sign of affection.

12. Drinking

Drinking and Vietnam go hand-in-hand. Beer Hanoi, Beer Saigon, Beer Truc Bach (the finest beer in Vietnam), Beer Halong, Beer Hue—you get the idea (those are all beer brands, by the way). Then there is ruou, rice alcohol which can come in a variety of flavors. Drinking is an occasion for bonding, building soft relationships with counterparts, and for social (and professional) lubrication.

13. Smoking

Cigarettes, traditional bongs, and hookah. Non-smokers are in for a rough time in Vietnam—there’s always someone smoking nearby (usually Marlboro or Thanh Long brands). Smoking is allowed indoors and is encouraged in nightlife spaces. The air quality already is not great in major cities like Ho Chi Minh City and Hanoi—the longterm health implications of these combinations are alarming. Purchases and installations of air and water filtration systems will become more common as Vietnamese seek to protect their children from harmful exposure to pollutants.

14. Music

Music is used to attract customers on the street, to drown out one’s senses in nightclubs, and just because someone is in the mood to blast it. Young people on the street break out into impromptu ballads or sing along with songs in unison. Overall, music here is dangerously loud and Vietnamese will pay the price for these unsafe audio levels in the form of fees to audiologists.

15. Stares

Everyone stares here, especially if you are an attractive woman, a foreigner, or are different in any way, shape, or form—in that case then they stare at you as if you are an alien. A simple smile or wave can break the ice but coming from a culture where staring is considered impolite, it can be jarring to some.

20 Years (+/-)

Twenty years ago this list would have been radically different except for a few items. Most vehicles on the roads were bicycles at that time. Imagine what a snapshot of Vietnam will be in the year 2035 with approximately 110 million people. Unrecognizable? Some parts Bangkok and other parts Hong Kong? Sustainable eco-tourism? A center for innovation in Southeast Asia?

In the early 20th century, the population of Vietnam was about 20 million. Today, Vietnam has over 90 million people. Vietnam is rapidly changing; some changes are positive and while others are unclear. What will be Vietnam’s role as we continue deeper into the 21st century? Only time will tell but one thing is certain—the pace of change here will surely increase.

Taking a Closer Look at the IPP

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In our last post, we outlined the IPP, explained its goals, and touched upon some of the challenges ahead for the program’s stakeholders. This week we are going to take a deeper look at the IPP and the cultural, comparative, and collaborative challenges ahead for the program in Vietnam.

Last weekend we sat down with Chris Zobrist, the Senior Innovation Partnerships Expert at the IPP, and he shared his thoughts on operating in Vietnam, the potential for entrepreneurship and innovation on a local level, and how the IPP factors into the changing landscape in Vietnam.

  • Can you share a bit about yourself? What’s your background, your role in your organization, and where are you located?

CZ: I’m currently working as Senior Innovation Partnerships Expert for IPP, which is a joint program funded by the Foreign Ministry of Finland and the Ministry of Science and Technology of Vietnam.  My background is as both an entrepreneur, having started many businesses over the last 15 years, as well as an entrepreneurship educator, spending part of my time teaching entrepreneurship and developing curriculum in several universities in Vietnam.

  • What kind of opportunities do you see in Vietnam over the next five years?

CZ: Vietnam has a lot of talent, especially in engineering and software development, and there are already a few high-growth companies as well as local start-ups planting entrepreneurial seeds here.

  • What’s the best way to establish trust with Vietnamese business counterparts?

CZ: It depends a lot on the individual with whom you are trying to build a relationship, specifically in terms of their background.  Generally, the best way to get to know someone is through someone they already know and trust, as in many cultures, Vietnamese really value social capital, and this can be transferred from one person to another through a proper introduction.  Besides introductions, sharing meals, and drinking together are also good ways of building trusting relationships which is an essential element of working together.

  • What’s the biggest difference between American and Vietnamese mentalities?

CZ: Coming from a developed country that churns out high quality products as well as infrastructure (roads, public buildings, etc), Americans as well as people from other developed countries have a natural expectation to see and make things at a high standard of quality.  Vietnam is still a developing country, so many things are made with what little resources were available, and so the expectation for quality coming from domestically produced goods is not high.

  • What’s the hardest part about doing business in Vietnam?

CZ: Ensuring high quality standards.

  • Do you have a favorite quote?

CZ: “I’m all for progress, it’s change I object to.” – Mark Twain, I like this quote because it is the most apt description of the greatest challenge facing entrepreneurs and innovators in almost every context, and especially true in a country like Vietnam.

  • What are the biggest differences between Hanoi and Saigon in terms of doing business?

CZ: Saigonese are generally much more open to new people and ideas, as long as there’s a clear opportunity and logic in place.  Hanoians are much more conservative, so even if they are presented with an attractive opportunity, they will be reluctant to mobilize the needed resources to capitalize on it.

  • What are the necessary attributes to succeed in Vietnam?

CZ: Social networks and building trusting relationships are keys to success in Vietnam.

  • Do you have any advice for expats/locals who want to be entrepreneurs in Vietnam?

CZ: Entrepreneurship is a team effort, so if you want to be successful, you need to learn how to network and collaborate with others to get things done.

Entrepreneurship, Innovation, and the IPP

During our discussion, Mr. Zobrist made it clear that the IPP is looking for people who have the necessary motivation, connections, and capacity to scale a company globally. That means that local companies will eventually have to implement international accounting standards, utilize English as an official working language (especially if looking to raise funding from foreigner investors), and clearly communicate a company’s Unique Selling Proposition (USP) across markets and cultures (differentiation).

While it might sound challenging, what the IPP is seeking to achieve isn’t impossible because it’s already been done before in Japan. Mr. Zobrist pointed out that Japan went from a ravaged post-World War 2 economy to the world’s second largest economy in the 1990s. What enabled Japan to be successful in its economic transformation was a stark shift in the workforce mindset, which even facilitated new vocabulary to implement innovative solutions.

Before this paradigm shift in Japan, specific industry terms did not exist to describe small batch, high quality production to factory workers. The Japanese created their own processes with their own resources to drive economic growth in 20 years; Japanese engineers, managers, and leaders took innovative ideas, applied them to manufacturing and processes and the result was innovative products from brands such as Sony, Honda, and Toyota. Thus, the development of a new technical language was necessary, which involved a social level (individuals, units, company culture, etc.) of change in innovation, and ultimately led to a change in output of manufacturing (lean manufacturing).

Vietnam currently has a similar language challenge ahead of it; for example, the terms doanh nhân and doanh nghiệp can mean “entrepreneur” or “businessman” and are used interchangeably (and sometimes ambiguously) in Vietnamese. Along those same lines, sáng tạo means “creation” while đổi mới means “renovation” so combining the two (sáng tạo đổi mới) is the closest meaning to “innovation” (literally “creative renovation”) in Vietnamese. The language will have to evolve in order to reflect the high standards and creative thinking that are necessary to maintain a competitive advantage in the global marketplace.

An ecosystem like Vietnam’s needs both entrepreneurship and innovation in order to foster the creation of high growth and innovative companies with a global outlook. If a company chooses to keep the status quo then it will stagnate, or worse, die. Copying existing models can be valuable, yes, but not nearly as valuable as new ideas that lead to the creation of value for a large number of customers or stakeholders. High growth companies are innovative and innovation requires change–there is no getting around this fact.

New language can shape new segments of a culture and creating new and/or dedicated Vietnamese words for entrepreneurship and innovation will allow the exchange of new ideas more efficiently and also help to facilitate a change in mindset–goals that the IPP hopes to realize once its integrated system is fully operational (good inputs producing good outputs).

The IPP seeks to perfect the way of building innovation systems in order to turn them loose and harness the innovative and entrepreneurial resources here in Vietnam. Then, the IPP can develop iteratively by building and expanding on foundational knowledge (training individuals and teams who can then train other individuals and teams and so on). In short, the IPP is building a Minimum Viable Product (MVP), learning from the outcomes, and making the necessary changes (quickly and fully) in order to make the process of creating high growth and innovative companies more effective and efficient in the future.

When the first phase of IPP finished at the end of 2012 there were some major lessons that were learned, leading to a promotion of transparency, accountability, and momentum for IPP Phase 2 (which began in January). This public-private partnership, comprised of a core curriculum and fellowship program, will eventually fully integrate entrepreneurship and innovation–but this process will require time, talent, and commitment at the individual, community, and governmental levels if it is to succeed in its mission.

Toward the end of our conversation, Mr. Zobrist pointed out that the IPP will have its final evaluation in 2018 but for now, the short term focus is on capacity building and making grants available to suitable applicants in this “wilderness stage.” However, the first significant indicators of progress could be as early as the end of this year or in early 2016 as the Fast Track training draws to a close and the New Innovative Companies are eligible for external funding on Demo Day.

With approximately 200 Expressions of Interests submitted to the IPP for New Innovative Companies, we look forward to seeing what kinds of teams are selected for the IPP–and more importantly, what kinds of teams, trends, and lessons emerge from the other side of the Fast Track Training.

Thanks to Chris Zobrist for sharing his time with us.

The Innovation Partnership Program

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Can innovation and entrepreneurship be taught? Does Vietnam have the ability to produce innovative and high growth companies to take on global markets? Are there people here who have the time, talent, and commitment to make an impact in the Vietnamese ecosystem?

The governments, donors, and people behind the Innovation Partnership Program (IPP) certainly believe so and with good reason.

Well, what is the IPP?

According to the IPP website:

“Innovation Partnership Program (IPP) is an Official Development Assistance (ODA) program financed jointly by the Governments of Vietnam and Finland. IPP is in its second phase running through 2014-2018.

Working closely with key national and international partners the program aims to scale up innovation training in Vietnam and improve support mechanisms for new innovative companies targeting international markets. Besides providing seed funding and connections for the best teams in Vietnam, IPP builds the capacity of public and private stakeholders through entrepreneurship and innovation training programs.”

The IPP focuses on three different but related areas: developing people, developing companies, and developing the ecosystem.

The Fellowship Program will develop future business leaders and entrepreneurs in Vietnam who will then lead the Fast Track training for the New Innovative Companies.

The New Innovative Companies component will help high growth Vietnamese companies bring a product or service to the global marketplace via Fast Track training and expense reimbursement.

And finally, the IPP will work with Innovation System Development Teams by providing funding for organizations that will raise standards, develop new resources, and positively impact the entrepreneur ecosystem in Vietnam.

In short:

“IPP supports Vietnam’s overall goal of becoming an industrialized middle-income knowledge economy by the year 2020. The program objective is to boost sustainable economic growth in Vietnam through the increased production and export of innovative products and services.”

One can think of the IPP as a pilot program, leading the way for other actors in the local ecosystem to continue on and influence the course of Vietnam’s entrepreneur development from a global perspective. The IPP is currently in its second phase; the conceptual portion started in September and the implementation phase has been ongoing since December. The Fellowship program is scheduled to begin around April, 2015.

The Innovation Fellowship Program

The Fellowship Program will consist of 20 fellows who will be trained by top international and local talent. The fellows will focus on innovation entrepreneurship, and once trained (over the course of two months), they will lead the Fast Track Training (six months) for selected new innovative companies. Trainers from Silicon Valley and other startup communities will come to Vietnam and work with the 20 motivated young people.

In addition to the fellowship requirements, the fellows will be selected on the basis of two primary criteria:

  1. Can they learn how to be entrepreneurs and innovators?
  2. Can they take best practices from the fellowship program and teach others?

In other words, do they have the capacity and attitude to make an impact after graduating from the fellowship program?

The fellowship requires a 40 hour per week commitment and will consist of some classroom and about 80% field work. Fellows will spend most of their time figuring out what customers need and how to find/create value in fulfilling those needs. Each week, the fellows will cover a new framework and ultimately practice and reinforce the learned concepts by the end of the week. The fellows will each receive a $1,000 allowance per month for duration of the fellowship program; the goal is to focus and train a core group of people to have all the tools necessary to create successful companies in Vietnam.

The IPP is currently seeking two local trainers who, if selected, will receive two weeks of training at Stanford University in the US, in addition to a highly competitive salary for the two months of training.

New Innovative Companies

Innovation, high growth, global; these are the words used to describe the kind of companies that the IPP is looking to fund, and eventually, is looking to see created here on a consistent basis.

The New Innovative Companies to be selected will be held to milestones and operational requirements for the duration of the program. The IPP will restrict what funding is used for (which is intended to be used on salaries and training related to development) and will cover only up to 70% of total expenses incurred by the new innovative companies. If people within the new innovative company are being paid, or external consultants are used, then the fees and services must be directly related to business activities. Thus, the new innovative companies will need to show accounting records, show payroll stubs, and show that a bank transfer took place or that the fees were paid out accordingly.

Once new innovative companies are selected, they will be injected into the six-month Fast Track Program (led by the Innovation Fellows) which will culminate in a demo day with the hope that 20 or so investors will be present and ready to look at each new innovative company for potential investment. The IPP does not to take any equity share in exchange for funding (because ODA requires it). Also, there will be no corporate governance oversight by the IPP for the new innovative companies. However, the IPP will have the power to remove teams, whether it’s because of a violation or if it’s clear that a new innovative company won’t be ready to present a compelling final pitch when the fast track training is completed in December 2015 or January 2016.

Innovative System Development Team

Local or international companies that want to be involved in Vietnam’s entrepreneurship ecosystem transformation can opt to form a consortium and submit their plans for developing specific new parts or for enhancing existing parts.

According to the IPP website:

“IPP’s grants are for covering 70% of internal and external human resource costs related to the innovation project. The first phase grant is approx. €50,000 [approximately 1.2 billion VND]. The most successful teams can receive an additional grant of maximum €200,000 [approximately 4.8 billion VND].

The potential content of the projects may include, but are not limited to, development of a new incubator, creation of new services for existing incubators, planning of a new funding program in the province, adding startup services to existing technology park or initiating a regional cluster growth program.”

To that end, expansion and funding activities, and, most importantly, imagination will be critical to finding new ways to leverage the funding to provide new resources to aspiring and dedicated Vietnamese entrepreneurs.

What’s Ahead for the IPP

February 23 is the deadline to apply for the Fellowship Program, but there is no set deadline to submit an Expression of Interest for the New Innovative Company and Innovation System Developers portions. In the longterm, IPP seeks to train individual people—not just companies. The real value of IPP is in developing people–the human talent–and getting them to share their newfound knowledge with others. Building teams takes time, and even longer to reach the point of creating high-growth companies so things won’t change here overnight, but the program is a great opportunity to head in the right direction.

One huge part of the challenge ahead for all those involved with the IPP is creating a proper technical vocabulary in Vietnamese, and in the long term, a cultural shift for attitudes toward entrepreneurship and innovation within the training programs. While the IPP has a fund amount of approximately $10 million—and it will certainly go further in Vietnam than elsewhere in the west—it will be the people on the ground, in the training sessions, and taking risks to create something great who will show the world just what’s possible in Vietnam.

2015: A Milestone Year Ahead for Vietnam

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Last year saw monumental changes in geopolitics: shifting borders between Ukraine and Russia, the growing impact of ISIS in the Middle East, student protests in Hong Kong reaching new heights, and the Ebola virus wrecking havoc in West Africa.

Another development that caught most of the world by surprise was a change in official policy between Cuba and the US. On December 17 2014, President Obama and President Castro held dual press conferences to announce the establishment of full diplomatic relations between the United States and Cuba. For context, when Vietnam was unified in 1975 the US embargo against Cuba had already been in place for almost 15 years (since October, 1960). As a result of the recent announcement between the two presidents, almost every barrier to trade and free movement of peoples between the US and Cuba will be removed, with the exception of the embargo—which only the US Congress can repeal. Historically, Vietnam and Cuba have shared a special relationship because of their ideological and independence struggles in the 20th century; perhaps Havana can learn from Hanoi’s experience in transforming into a “socialist-oriented market economy” and beyond. US investors and entrepreneurs will only be too willing to help as well.

2015 is special year, in part due to the number of significant anniversaries; for one, it is the 20th anniversary of the normalization of relations between Vietnam and the US under President Clinton’s administration. This year will also be the 40th anniversary of the reunification of Vietnam, the 85th anniversary of the Vietnam Communist Party (VCP) and the 70th anniversary of Vietnam’s Independence Day. Moreover, this year will mark the beginning of the 12th National Congress of the Communist Party of Vietnam.

As we enter deeper into 2015, there are many developments, changes, and policy implementations to look forward to and to make sense of. Above all, there will be increased amounts of competition in Vietnam—both from foreign and domestic players looking to capture a piece of the steadily growing economy. However, organizations operating in Vietnam should be on the lookout for commodity price swings (notably oil), currency fluctuations (as we are seeing with the Euro and the Swiss Franc), and new signs of saturation in certain domestic industries (such as motorbikes), all of which could stymie economic growth.

A Revamped Visa System and New Laws

January 1st brought new visa rules for foreigners with a complete overhaul of the old system. Basically, the number of visa types is increasing from 10 to 20 and there are new entry and exit requirements.

The former tourist visa (C1) is now “DL” visa and the former business visa (B3) is now an “DN” visa. One of the major changes of the new rules is that visa types cannot be changed while the applicant is in Vietnam, which means that tourists desiring to become English teachers (seemingly the majority of westerners) will now have to leave Vietnam and re-enter under the correct visa scheme.

Regarding the exit requirements for foreign nationals, they are listed below.

Article 28. Cases of suspension from exit and duration of suspension

1. A foreigner may be suspended from exit in one of the following cases:

a) He/she is currently the suspect, the accused, or the person with relevant obligations in a criminal case; a defendant or a person with relevant obligations in a civil case pertaining to business, employment, administration, marriage and familial affairs;

b) He/she has to implement a judgment or decision of the Court or a Competition Settlement Council;

c) His/her tax obligation is not fulfilled;

d) He/she is obliged to implement a decision on penalties for administrative violations;

dd) For reasons of national defense and security.

2. Clause 1 of this Article is not applied to people who is serving a prison sentence and taken abroad to provide evidence as prescribed by Article 25 of the Law on Judicial assistance.

3. The duration of suspension from exit shall not exceed 03 years and may be extended.

It will be interesting to see how these exit requirements will be implemented—and if they will be pared back once they are practiced on the first few cases, which will surely receive widespread publicity.

Additionally, foreigners now have rights that are outlined in the same legislation (which wasn’t explicitly stated previously):

Chapter VII, Article 44.1. Foreigners that enter, leave, transit through, or reside in Vietnam are entitled to:

  1. Have the life, dignity, property, the lawful rights and interests protected in accordance with Vietnam’s Law while they are staying within the territory of Socialist Republic of Vietnam[.]

There are other rights and obligations, so you can view the actual legislation here if you’d like to know more about the change in visa law for foreigners.

Additionally, the are a number of other laws that will take effect in 2015 such as the Amended Property Trading Law and the Amended Housing Law which will impact foreigners; they will set new equity capital requirements for real estate businesses and property projects, and allow foreigners to own a house in several specified forms, respectively. Moreover, there are other laws that will have profound changes for foreigners seeking to invest and own businesses in Vietnam, such as the Law on Enterprises and Law on Investment.

Same Sex Marriage Unbanned

Earlier this month, Vietnam repealed a same sex marriage ban, boosting the nation to the head of the pack for gay, bisexual, and lesbian rights in the region. Both Hanoi and Ho Chi Minh City have yearly gay pride parades in the past which have been growing in popularity with each passing year.

A New American Ambassador

The change in marriage for same-sex policy couldn’t have happened at a better time, as the new American Ambassador, Ted Osius,  was officially received in Hanoi last month. Ambassador Osius and his partner, Clayton, have a son, Tabo, making theirs a truly multi-cultural family and perhaps an archetype that will be more represented in the 21st century–in Vietnam and beyond.

Your author had the opportunity to meet with Ambassador Osius during a dinner last week in Hanoi–we have both lived in HCMC and Hanoi, albeit during different eras. More importantly, we also spoke about encouraging American students to study abroad in Vietnam as a way to change the perception of Vietnam in the US, which currently has approximately 16,000 Vietnamese students studying at higher education institutions. Overall, Ambassador Osius spoke openly and candidly about his priorities for his tenure here in Vietnam, some of which you can find here. We are excited and look forward to a new chapter of relations between Vietnam and the US.

New Trade Agreements and Fulfilling Obligations

The Trans-Pacific Partnership (TPP), once finalized, will set the stage for the US to be Vietnam’s largest trading partner. Additionally, Vietnam and the Customs Union will also be finalizing their agreement later this year. Once both agreements are executed, it will deliver a big boost to Vietnam’s trade activities.

Also this year, Vietnam must fulfill its World Trade Organization (WTO) obligations of permitting the establishment of wholly foreign-owned businesses, including retailers and wholesalers. Furthermore, integration with ASEAN Economic Community (AEC) allows the free flow of goods and technical (highly skilled) personnel this year (and will slash tariff rates to zero by 2018). Vietnamese companies might be woefully unprepared to compete against new products and services from outside of Vietnam coupled with foreign businesses right in their backyard—but it’s still not too late for Vietnamese business stakeholders to change directions.

Industries, Opportunities, and Trends to Watch Out for in 2015

-New mobile game companies, new gaming models, and cyber and physical spaces merging

-Continued and extended education; for workers and students, respectively

-Improving the local tourism/customer service experience for non-Vietnamese speakers

-Vietnamese startups and local companies continuing to go global

-Agriculture and forestry restructuring; organic foods beginning to become more popular

-Developing “smart” ecosystems at city and building levels

-Social media usage by official Vietnamese organizations

"Happy New Year 2015"

“Happy New Year 2015”

Winter in Hanoi, can you believe it?

Winter in Hanoi, can you believe it?

"Thang Long-Hanoi Thousand Years of Heritage Heroic Capital The city of peace"

“Thang Long-Hanoi
Thousand Years of Heritage
Heroic Capital
The city of peace”

 

Happy New Year; we wish you a healthy and happy 2015.

 

 

The crowd at the AMX Seminar at the Hanoi Daewoo Hotel on December 3, 2014.

Building a Brand in Vietnam

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Building a successful brand in Vietnam (or anywhere) requires having a clear idea of local consumer (and by extension, social) norms, trends, and perceptions (i.e., market in general) in addition to understanding the local, regional, and national cultures for successful positioning in a country. Yes, conspicuous consumption exists here in Vietnam but for many brands, simply copying and pasting a western marketing campaign won’t work beyond luxury brands that convey a sense of status to those around the targeted consumer. Sometimes, understanding a market means a change in mindset.

This week we are taking a look at three modern scenarios: the first, a globally known brand seeking to capture market share in Vietnam; the second, a local brand growing domestically (and which could eventually lead to the third scenario); and the third, a local brand entering foreign markets (which will most likely increase in the future). We’ll also explore some potential ways forward for Vietnamese companies in the future.

Global Brand to Local Market

Earlier this month, we were invited to the first ever AMX Seminar in Hanoi, which was followed up by a similar version a few days later in Ho Chi Minh City (HCMC). The audience in Hanoi was primarily comprised of 20-30 Vietnamese Systems Integrators (SI) with less than five foreigners in the audience. After the half-day presentation, we were asked to give feedback on the potential for the AMX brand in the Vietnam market and how to improve service and support overall.

In short, the event was a solid step toward establishing the AMX brand in Vietnam but it won’t be an easy win in this market as Crestron, Savant, and Extron are all available here as well—not to mention local and/or less expensive offerings. So, there’s definitely opportunity for AMX (and any technology brand) to establish itself as a market leader and ride the growing economic wave here—but it will have to be in a personalized manner that resonates with Vietnamese stakeholders and/or expat decision makers.

These technology brands don’t have counterfeit and quality issues to deal with because their products are sold through authorized dealers and country distributors. For other industries, such as cosmetics, there exists a trust deficit: how do local consumers know the products that they are buying are authentic? Thus, consumers prefer hand-carried cosmetic items from trusted friends or associates who are traveling to Vietnam from more developed markets such as Hong Kong. After all, skin and eye products are the ones that you don’t want to be cheap on.

Local Brand to Local Market

Another company that is building a (completely) new brand here in Vietnam is Emigo, which is owned by VinFashion of Vingroup. The Emigo brand was launched earlier this year and it already has two open locations including Vincom Center Ba Trieu and Vincom Mega Mall Times City. Approximately four additional locations are slated to be opened throughout Hanoi in the near future.

The Emigo brand has the potential to make an impact on the fashion scene here since its offerings are more affordable than brand name imported clothing lines (its designs are similar to Zara or H&M) and there is always an element of national pride in buying from a Vietnamese brand. It remains to be seen how the Emigo brand will be built domestically but for sure Vietnamese shoppers will want to inspect the materials and quality of the real products for themselves before deciding whether or not to buy into the brand.

If Emigo can resonate with local consumers then it might be able to build momentum here and expand abroad—if those are indeed the plans that VinFashion has in store for the brand. Still, could we see Emigo products in western stores one day? If so, then perhaps the clothing label will read “Created in Vietnam” in addition to “Made in Vietnam.”

Local Brand to Global Market

Brands coming into Vietnam have the advantage of prestige and case studies in western markets—but what about the reverse situation? How would a Vietnamese brand fare in the global marketplace? When foreigners hear “Vietnam,” what is their impression of Vietnam, i.e., what is Vietnam to them? And, what is Vietnam known for globally? These are all questions that Vietnamese brands looking to go abroad will have to find the answers to in order to enter new markets in the most efficient way possible.

A Vietnamese client recently told us that they wanted to build a “Vietnamese iPhone” in part due to the success of Apple’s iPhone in Vietnam and the rest of the world. Instead, we suggested that they differentiate their product by creating a secure smartphone (similar to the Blackphone or Boeing Black). Given last year’s revelations by Edward Snowden and Glenn Greenwald, security conscious companies might prefer another option for secure handset communications beyond American and Chinese manufacturers, especially if the alternative price point is attractive. Or a suitable Vietnamese startup could always take a page from Xiaomi’s book (2010 wasn’t so long ago).

The growing risk for Vietnamese companies who have the technical skills to produce something for other markets is that they might create something that only Vietnamese consumers will like. For example, when Yamaha Vietnam unveiled its website redesign in a “flat design” style, the feedback they got from Vietnamese visitors was that the website had no information and was hard to navigate. Vietnamese taste and design considerations can be very unique, even in Southeast Asia. Another way to think about about going to another market is that it’s not realistic for an American company to come to Vietnam, do things the “American” way and expect to be successful. Similarly, how do you think a Vietnamese company trying to do things the “Vietnamese” way in the US (or any other country) will fare?

Choosing the Long Term

During a conversation last week with some Vietnamese/New York fashion industry insiders in Hanoi, we discussed how to create and position a future clothing brand here in Vietnam. What is Vietnam’s competitive advantage in manufacturing? Vietnam’s current advantage is its low cost of labor (in addition to other financial incentives) which has prompted giants like Samsung and Intel to setup multi-billion dollar manufacturing facilities here.

However, inexpensive labor won’t last forever nor will Vietnam’s “Golden Population Structure” remain intact. Just as investment has flowed into Vietnam from China, so too will investment flow into a location with less expensive labor costs—perhaps to another neighbor as well. So looking ahead, what product or service might Vietnam have in the future that will give it an advantage in the global marketplace?

Today, Vietnam has plenty of raw materials but they aren’t finished goods which Vietnamese manufacturers can command a premium for. Not to mention that we live in a world of limited resources, so what can Vietnam offer the world in the future? One way to answer this question is to think about the challenges that Vietnam will face in the future (and that other countries will have as well). If Vietnamese companies continue to or start working on solutions for those problems then they can be ahead of the curve. After all, there is innovation here–many Vietnamese are “professional improvisers” in their daily lives and they are quick and resilient learners, as history has shown.

In the future, Vietnam won’t be the only country that has a rising national power consumption (and therefore rising demand for coal if alternative sources don’t emerge), it won’t be the only country with more cars on the road (and therefore more air pollution), and when sea levels rise it won’t just affect a single city like Can Tho in the Mekong Delta—it’ll affect hundreds of cities and displace millions of people. The point here is that the challenges of the future won’t be exclusively Vietnamese, but Vietnamese-origin—and not uniquely Vietnamese—solutions can be used to solve the challenges of the future (if those problems are solved here first or at the very least knowledge can be shared abroad). However, it takes a long term mindset to truly tackle these transnational issues of our time in addition to investments in education, human capital, and financial resources for research and development.

Peter Drucker, the 20th century’s greatest management thinker advised to always choose the long term, because it always comes true. Focus on your long-term strategy, but take advantage of the short-term opportunities in the meantime–that’s how a future brand in Vietnam will be forged, and how Vietnam–the brand–can begin to take shape as well.

Perhaps an alum might be on here one day…

The Olympia Schools

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We all remember the best and worst teachers we had growing up but what makes a school great? Is it the students, the teachers, or the environment? Is it a top-down approach, organic growth, or innovative teaching methods? Or is it simply a matter of caring and going beyond preparing students for the next stage of life?

With some exceptions, primary and secondary education in Asia doesn’t have a stellar reputation to begin with: many schools are pressure cookers that are ripe with rampant student cheating, some who freely admit to doing so. In some instances parents pay teachers to “look after” their children and teachers pay the school’s principal to get a job in the first place. Traditionally, the goal of education in large parts of Asia is to absorb and repeat as much as factual knowledge as possible (rote learning) all without questioning the wisdom and authority of teachers.

The Olympia Schools aims to change the educational mindset whereby students focus on how to learn and access information so that they are able to develop the critical thinking skills which will be essential when facing new challenges in the 21st century. The school places emphasis on the process of learning, and seeks to intersect theory and practice for each of its units throughout the school year.

Simply put, the Olympia Schools are a new breed of education in Vietnam. The school started out as Dream House 11 years ago and was the creation of four Vietnamese women who weren’t satisfied with the local kindergarten offerings in the neighborhood. So naturally, they did what anyone would do: they opened their own school. Word spread about the new school and it became a popular school with parents who wanted better alternatives for their children. It was so popular that when the co-founders’ children finished kindergarten, they started an elementary school. Finally, about four years ago the school became the Olympia Schools. Today, some students are bused to the school from up to an hour away.

Christopher McDonald, a native of Michigan, is the Head of Schools. He has played an integral part in shaping the school’s atmosphere and amenities to form the current school environment. We stopped by on a recent Friday morning to speak with Mr. McDonald about what makes the Olympia Schools unique in Vietnam and how the school is preparing its students for life (the school’s motto).

A Meteoric Rise in a Decade

The Olympia Schools is located in Trung Van, Tu Liem, Hanoi. The facilities at the school include a tennis court, a football (soccer) field, an art studio, a games area, a weight room, and even an underground swimming pool. The vast majority of the students are Vietnamese and instruction is given in both English and Vietnamese. Among one of the many notable firsts, the school was the first in Vietnam to offer the PSAT last year and currently offers AP courses. During the summer, the school is host to a camp called Utopia where participants create their own society.

The campus has a distinct international feel to it and has a wide range of easing colors throughout the halls. When we arrived, the first graders were practicing for the Winter Festival, to be held later this month. There is a good feel of school spirit, from the formal uniforms (which are worn every day except on Casual Fridays) to the country flags hanging in the entrance hall to the nice green spaces surrounding most of the school (it’s sometimes hard to find quality green space in a bustling city like Hanoi). Even Martial Arts and cooking classes are offered and the students’ photos are displayed on digital signage on their birthdays, a nice way to make the students feel even more special.

Below is the school’s mission statement:

“The Olympia Schools embrace Vietnamese values while providing an integrated experience in the study of English and global issues by developing fundamental skills, fostering creativity and problem solving, and promoting ethics that allow students to adapt, to improvise, and to overcome challenges–we prepare students for life.”

Grades 1 through 12 are offered at the campus and there are plans to bring the kindergarten classes on site in the future. The school also has partnerships with educational organizations in the United States as well as Canada—something that gives it an advantage in terms of prestige but also exposes its partner schools to resources on the other side of the world–a winning formula for all.

The school also focuses on soft skills beyond the classroom to develop all aspects of a student’s character and attitude. The faculty is a mix of local and foreign teachers and we saw several classrooms that had projectors as you would find in the US. The school currently uses a four term school year where students focus on different objectives each term. For example, Term 1 revolves around project based learning (PBL); Term 2 ends in traditional formal testing; Term 3 features Creative Learning Expression which requires the student to demonstrate what s/he has learned via any medium; and Term 4 is a portfolio review/analysis which culminates in a reflective end to the school year. For more information about the terms, please see here.

Additionally, there is a summer skills component which may include an internship, e-project, or reading assignment. As a testament to how impactful the school’s efforts are, Vietnam’s Ministry of Education and Training (MOET) has followed The Olympia School’s success in regards to using integrated studies in its curriculum. The result has been Olympia Schools graduates going on to be successful in their university careers, in large part due to the emphasis on scholarship and continuing studies.

As profiled in the Forbes piece:

“It was the first Vietnamese school with a college counselor on site like an international school—normally college counseling is offered via a separate paid center—and its graduates often attend university overseas.”

The school’s alumni in recent years have gone on to study in the US, Singapore, Australia, China, and other countries. From organizing a kindergarten class to building an entire campus and sending students off to universities within a decade; an amazing feat indeed.

A Future Model

On December 20 and 21, the Winter Festival will be held at the Olympia Schools. The Winter Festival will feature performances, a fair, and games and will include participants from other schools in Hanoi as well. This year’s theme is fairy tales of Vietnam and other countries with the purpose being to raise money for the “Seasons of Care” fund which was founded four years ago. The fund aims to build a new water supply and filtration system for Na Loc Primary School, Ban Mu, Tu Xuyen, Van Quan County in Lang Son Province, close to China. Art performances and games will be held from 2:00 PM to 9:00 PM on both days as the fair provides opportunities for the community to come together to make an impact in Vietnam all while enjoying each other’s company.

So beyond this month, what’s in store for the Olympia Schools? Well, it hopes to be the new model for schooling in Vietnam by combining learning with experiences in and out of the classroom, i.e., learning by doing and by sharing with others.

In this day and age students cannot afford to be mere bystanders or observers of history because the classroom of today will be the workplace of tomorrow in terms of diversity, culture, and foundations of excellence. The successful students will be the ones who communicate effectively, who engage with different and relatively unknown cultures from their own, who think critically, who ask thoughtful questions, who reflect upon their experiences, and who can work together with anyone to accomplish synergy.

Schools like The Olympia Schools realize the new world that we all live in–this Information Age–and seek to prepare students for a rapidly changing and volatile world by enabling them to craft and assemble the tools to understand and overcome complex global challenges that they will encounter in their lives. This task is critical because one day in the near future students will have to answer a vital question: what does this change mean for me?

Thanks to Christopher McDonald, Head of Schools for sharing his time with us and answering our questions. 

 

Pieces hanging in the back of the main Devon London location in Hanoi, Vietnam.

Devon London by Devon Nguyen

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Fashion in Vietnam has come a long way from loose shirts in the 1980s and denim jeans in the 1990s. In recent years, there has been a wave of Vietnamese from overseas who have returned to Vietnam and set up fashion houses all in an effort to shape the fashion industry in Vietnam and beyond. Kelly Bui, Helene Hoai, and Devon London are just a few brands started by pioneering entrepreneurs who have faced the odds and challenges of starting up in a nascent domestic industry.

Recently, we sat down with Devon Nguyen, CEO of Devon London to find out more about the fashion scene in Hanoi and greater Vietnam. Ms. Devon grew up in Warsaw, Poland and worked in London (where she developed herself as artist and designer) before moving to Vietnam and launching her Devon London line in 2011. She is currently based in Hanoi and opened up a second store location in Saigon about a month ago on Dong Khoi street.

For Ms. Devon, her brand’s style is different from domestic and international brands and it is geared toward people who know what they want from fashion. Ms. Devon describes the brand as stylish, sophisticated, modern, and minimalist because for her customers, they can get a Devon London outfit that they can wear beautifully. The Devon London line is designed at her studio in Hanoi and the clothes are produced in a factory in Hanoi employing some laser cutting techniques (hers was one of the first brands to utilize this technology in Vietnam for clothing).

To Ms. Devon, her brand is more than just a business. Ms. Devon is family oriented but she is also a self-described workaholic—the key for her is balance. She has a Vietnamese husband who lived London; an architect and a fellow artist. Both of their families are from northern Vietnam and she also has a brother and sister: twins who are 10 years old.

Fashion From the Start to Starting in Vietnam

Ms. Devon always knew that she wanted to be a fashion designer from an early age. In part, she had early influences from her parents as they had fashion backgrounds. However, it wasn’t until she was 15 years old that her parents treated her interest in fashion as something serious. Despite her interest in fashion at a young age, she wasn’t enrolled in creative courses as she grew up. In fact, she was self-taught and through research she learned how to draw and to sketch.

Ms. Devon has been living abroad her entire life so when she came to Hanoi, it took her a year to get adjusted to life here even though she grew up on Vietnamese values abroad since she was three years old. Even today she is still learning new things about Vietnam compared to her past. During tough times, she thought about going back to Europe but she ultimately decided to stay and persevere.

In some cities it can be easier to create than in others due to inspiring surroundings, a robust art community, and collaborative talent. When Ms. Devon arrived in Vietnam, she needed to get used to a lot of different and new things. Designing is art form so her role as a designer is to create art. At first, she was surprised that she couldn’t get inspiration—it was so hard compared to her time in London. For Ms. Devon, the hardest part of operating in Hanoi is challenging herself—not with the environment but with design technique, i.e., keeping the creativity flowing in Vietnam. Not being able to find inspiration means that the risk increases of “becoming more commercial,” which can result in an unclear picture of where to stand and brand. Thus, the real danger is being a copy of other people and losing what you were fighting for in the first place.

Suffice to say, Ms. Devon does a little bit of everything. Not only does she design the line, but she is actively involved in the PR, marketing, sourcing, and almost every other aspect of the business in Hanoi. Ms. Devon is passionate about what she does because for her, fashion is not a job—it’s part of her but it doesn’t mean that it’s always easy. Daily operational challenges include finding quality people and drawing out the most of her creativity.

The people Devon London hires have the potential to be someone in the future. Ms. Devon sees herself in them, as a version when she was just starting out; they need experience from someone they admire in a good environment and Ms. Devon provides that. In her recently opened larger location in Saigon, it was important to select the right store manager to represent the brand. As she put it, “opening a shop is easy but expanding is difficult.”

With the opening of her second store, Ms. Devon has to be more precise in training employees and she begins to scale the brand. When employing people, it requires finding experienced employees and using what you have. In the end, “we choose what’s best for us, what gives us peace of mind under a lot of stress.”

Changing Trends

Like many things in Vietnam, the fashion industry has developed a lot in recent years. In fact, the fashion scene here has been changing every year; for example, last year the fashion industry was not as developed as it is today. Two years ago there was a huge gap in the industry and three years ago no one cared about fashion shows. People were simply not interested in fashion the way they are today and as with anything new, people need some time to get used to new fashions.

Since a large part of the time for “first movers” is spent educating consumers, Vietnamese designers struggle daily. People tend to comment without knowing the real substance so they make up a story; it’s a hard path to expand to be someone and to get a brand to be where you want it to be. And if you are original then get ready to be copied because so many designers go for the “easy job.” However, customers know what is what—they are very smart. For other stores who copy Ms. Devon’s style, it’s something that she can joke about because it’s not something serious when her customers tell her, “I saw your design in another store’s window but it looked horrible.”

Still, being in the fashion community in Vietnam can be tough since there is jealousy and it’s a competitive business all the time. However, healthy competition is always good; there are new designers so it pushes Ms. Devon to be good all the time as she needs to try to be better every collection. The London Devon brand primarily competes on quality and pricing. For global super brands the design looks great, but the average income in Vietnam does not make it affordable. Devon London is a unique design which can expand consumer tastes and habits. But Ms. Devon warns, “if you want to be original then you have to be ready to be copied.”

Advice for Entrepreneurs

For other expats who come to Vietnam and settle down here, Ms. Devon recommends that they know the local language because Vietnamese people don’t speak much English. If you want to establish things then you will need to work with a lot of people which means that you will need to coordinate with local workers. Learn about the culture, how people operate and spend time to get to know where to buy things, who to speak to, and gain a bit of connections. Remember, it’s not what you know but who know.

For sure, the beginning of any journey is the hardest part. Ms. Devon advises that, “when you think of giving up then think of why you started. Nothing comes easy.” For her, when things don’t go as planned, she finds peace with her family and divides between work and home life. For example, she hasn’t worked on a Sunday in the past two years.

Also, it depends where you start in Vietnam. In Hanoi, the customer market is different compared to Saigon; there is more culture in Hanoi whereas Saigon is more commercial and more open. There, they appreciate a more unique style but in Hanoi the people appreciate something more stable and prefer to blend in in Hanoi, where people can be more judgmental.

Devon London, Present and Future

For future plans, Ms. Devon would like the collection and brand showcased in a major fashion city like London or New York but it’s a long term objective. For now, she ships orders outside of Vietnam for customers who buy online.

Ms. Devon describes her life as busy all the time but for her, busy means that she’s doing good so she doesn’t complain about it; she strives to find the right balance. Each collection she designs is different. In London she found inspiration by going to the park and relaxing or by going to an art gallery exhibition but it’s not so easy in Hanoi. Ms. Devon reads a lot of books and has learned how to be creative in Hanoi, how to train her creativity, and how to find inspiration in Hanoi. In her downtime, she travels to Thailand and Hong Kong.

In terms of future prospects overall, the Vietnamese fashion industry will grow very fast. A lot of designers like Ms. Devon are coming back to Vietnam. Furthermore, a lot of creative people are seeing that the fashion space in Vietnam hasn’t been used to the fullest, but what they do about it is the defining portion. For those that see the gaps in the fashion community, they can’t sit and complain—in other words, don’t say “we don’t have anything” instead of finding it or creating it.

Ms. Devon sees Vietnam as a source for prototyping for up-and-coming fashion designers outside of Asia due to costs of manufacturing. Furthermore, she is confident in the Devon London brand; it’s on the way and doing well. For Ms. Devon, everything is possible—nothing is impossible as long as you put your heart into it. At the end of a journey, you can say “we used the best we could and did with what we had.”

It seems like that fashion journey is just getting started for Vietnam; this month the first Vietnam International Fashion Week was held in Ho Chi Minh City (HCMC) with about half of the showcases being local designers. For some of the designers, they might be living their dream, and for others the show might be a stepping stone to something greater. Only time will tell but if you have trouble figuring out what to do, as Ms. Devon says, ask yourself, “what really makes me happy?”

First Impressions of Vietnam

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Trying to explain Hanoi, and Vietnam in general to someone who has never been here can be quite challenging. For many expats in Southeast Asia, the region and its cultures can be difficult to understand and navigate let alone effectively explain to family and friends at home. And research, while helpful to understand settings, is not a substitute for direct experience.

This week we have a guest contributor who is with us here in Hanoi. Zdravko Tumbovski is an international businessman who has done business in Turkey, Bulgaria, his native Macedonia, and other countries. He arrived in Hanoi for the first time on Tuesday, November 18 in order to take a firsthand look at the Vietnamese market and to gauge its potential for his interest in trading with Vietnam and in Southeast Asia.

His professional experience includes an internship at an insurance company in Macedonia; a Business Analyst position at a family owned company, Info Group Ltd, which made investments in the Macedonian Stock Exchange and the Macedonian Real Estate market. Currently, Mr. Tumbovski is the founder and director of Z&Z Capital Ltd based in Bulgaria, which specializes in transport and logistics services in the European Union (EU).

Additionally, in conjunction with partners in Turkey, he is involved in import-export transactions, mainly in cooking oil, but they are also expanding to other commodities for the Turkish bazaar. His primary role is to find a suitable supplier and to negotiate the payment methods and transportation of the goods.

Zdravko shares his first impressions of Vietnam below:

After constantly moving around between the US, Europe, and the Middle East in the last seven years, I spent a considerable amount of time in Los Angeles this year. About a month ago, I reconnected with director of GKTA Group, whom I have known for several years.

GKTA Group introduced me to some of the many challenges, opportunities, and conditions faced in Vietnam. I felt attracted to learning more about this dynamic market and it didn’t take long for me to decide to come here and check out Vietnam for myself.

Even though I am still in the first week of my arrival, I must admit that I am having a very smooth transition to this country so far. I was already familiar with Asian cultures due to my friendship with Asians in my network that I have known for a long period of time, and also because GKTA Group put a lot of effort to set up at least one meeting per day with a local person where I can get his/her answers to some of my questions about his/her country’s future, his/her point of view toward foreigners, and the changes that s/he has seen the past five years in Hanoi, especially.

Hanoians and Hanoi

Vietnamese people in the capital of Hanoi are generally polite and quiet. It usually requires some time until they start to feel comfortable sharing their views, and begin to realize the goal of my questions because I see that they are not very used to foreigners who are interested in their culture, and who try to understand their values.

Vietnamese people seem to be the loudest on their motorbikes. They are honking at every cross street, and from my findings they rarely show anger with words, but only with menacing stares at the perceived wrong-doer. The amount of motorbikes and the traffic frequency for me was something unseen before; in short, outrageous.

Hanoi is a city with a long history, and it is shown on every corner. Hanoi has the street-selling spirit and it is still done traditionally and mostly inexpensively for locals. However, there is luxury consumption visibility in the younger generations and newly rich populations. For me, this is probably more visible because I was raised in a former communist country, Macedonia (Former Yugoslavia).

The Wi-Fi coverage and the use of internet are quite impressive compared to the expectation of technology in a developing country. The “drinking-coffee” habit is at large range, and the number of cafes is seemingly endless but a favorite of Vietnamese people. One new thing for me is using condensed milk (“sua dac”) in almost every cup of coffee—and I find it tasty—even if it is uncommon for me as a European.

Luckily, I am fan of Asian cuisine, and have been eating it frequently. Compared to other cuisines and the tastes of some westerners, you may remain hungry here if you are very picky with the food. The traditional street foods, or the local dishes in the very basic and not-so-modern restaurants can be tasty for people who are food enthusiasts and open to new flavors; on the other hand, it can be off-putting (even though I aim to be cautious with my language here), because I certainly know many people who would not be able to eat the local food here, and who would not be willing to be seated and served in the Hanoian or Vietnamese way of small tables and children chairs. So far, I enjoy it.

Work Ethic and Exposure

My personal view is that most of people here work hard and long hours. The basic example for that is the staff at the hotel where I stay. They are here every single day of the week, for over twelve hours per day. They are very friendly and very helpful even if there is occasional miscommunication.

When talking to waiters or other people in cafes and on the streets, I have come to realize that many of them have not had a chance to travel a lot. Actually, many have never been outside of Vietnam. The reason for that is first, money and second, time since, as mentioned before, they have to work almost every day, year-round.

There is a sense of trust that permeates through the people here. I had a very unique experience that occurred to me at the border upon arriving at the airport: I had arranged for visa upon arrival and at the bureau the visa was issued and stamped more quickly than what I had estimated, but I had no cash on me to pay. The customs officer asked me if I had any currency equal to the amount of $95 (the price of the visa), but I had none. The ATM was outside the immediate area, after the passport control, so I thought that I couldn’t consider the option to withdraw some money. As a matter of fact, the officer walked me through the immigration border without any checking and without any concern, just to withdraw the necessary money for the visa, and then led me back to her desk in order to pay. That was surprising. Actually, the border control experience in general was more liberal than in many other countries.

If I am allowed a chance or could offer some suggestions to Vietnamese who want to be successful with westerners, it would be:

  • Learn more English, the number of tourists is increasing  and you need it
  • Strive to be more comfortable with foreigners
  • Be more creative for international businesses; this land is rich
  • Act more responsible to the duties and respond to requirements efficiently and faster

Business and Understanding Vietnam Now and in The Future

I haven’t experienced any business deals in Vietnam yet, but I am most worried about the changing industry regulations, the unpredictable law amendments, unfair competition, and the guarantee of quality standards.

My advice to the expats that want to do business in Vietnam is to spend as much time as possible here, but with local people. It is essential to understand the habits of the Vietnamese before starting any sort of business, in order to prevent an organizational mismatch and communication misunderstandings. It is complex and different here indeed.

I can already see that the necessary attributes required to succeed in Vietnam are patience and simple guidelines.

What I would like to learn about Vietnam or the Vietnamese is: until what extent have the ancestors shaped today’s population, and how much is the young generation willing to keep and practice the old traditions? I hope that finding this balance will help me to predict and understand their place in the world for the next decade.

This next decade will be crucial for Vietnam as the country transitions to increased trade with more global partners, the middle class continues to grow, and more foreign investment pours into the economy. Vietnam has many natural resources, a lot of talented people, and a willingness to exceed economic indicators but it will not be without some development friction, conflict between traditional and modern Vietnam, and addressing some major investor concerns. However, the long-term benefits will be far greater than what the shortcut rewards of today will provide. After all, as Jim Rohn says, “You cannot change your destination overnight, but you can change your direction overnight.”

Thanks to Zdravko Tumbovski who contributed to this week’s post.

Capturing the chaos of Hanoi.

Currents of Creativity in Hanoi

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We took off from publishing last week so we are resuming our normal schedule of Sunday posts. Keeping a schedule or routine in general helps to build structure and maintain momentum; for some that means going to the gym, for others it means traveling once a month, and for us it means writing consistently in between projects, meetings, and travels.

However, it’s good to change things up once in a while and to consume content instead of creating it—movies usually fill that role but for inspiration it’s best to turn elsewhere. While it might be hard to find unique institutions of culture in Vietnam beyond museums, a vast assortment of handicrafts, or those visible propaganda art shops in the streets, it does not mean that Vietnam is devoid of other forms of creativity and expression. Indeed, there are coursing currents of creativity in Hanoi and greater Vietnam that can be missed at first glance. This week we will take a look at some emerging sub-culture trends within the last few years.

Tuned In

Music: art for the ears. In general, many of the younger generations of Vietnamese seem to prefer western songs with romantic undertones. However, there are not many high-profile western musical acts that come through Vietnam, which is a bit surprising to consider since western culture can be heavily consumed in Vietnam at times. For example, one could make a strong case for P!nk’s Just Give Me A Reason as the 2013 unofficial theme song of Vietnam. And speaking of anthems, let’s not forget Michael Learns to Rock’s Take Me To Your Heart, which seems to be played everywhere in Vietnam (even though they are technically an Asian-branded band). Some Vietnamese children even learn the lyrics to MLTR songs while growing up—and they probably could have learned their first English words via those popular songs

Some other younger and more hip Vietnamese seem to enjoy rock music more, preferring local bands, or jazz, or rap music. Vietnamese rappers such as Su Boi and Kim (also known as Kimmese) are among two of the most popular acts. Moreover, KPOP has spread its influence to a huge numbers of followers here in Vietnam. KPOP stars have brought everything from new dance moves to novel hairstyles to nascent fashion trends in Vietnam. On a more local level, Hanoi seems to have more charm and is more music festival centric whereas Saigon experiences are more about the creativity and variety in cosmopolitan nightlife experiences in bars and clubs.

On The Move On and Off The Wall

Run, Saigon, Run! Earlier this year, the unique Color Me Run, “based on new ideas for activities” was held in Saigon for the first time. Meanwhile, in Hanoi, Viet Pride, an inclusive equality and volunteer driven parade was first held in Hanoi in 2012, and then subsequently spread to Saigon and beyond. It is interesting to see the divergence between commercial and social mission events within the host cities, especially because some of the more progressive events originate from the more traditional city.

Other than those events, street art and graffiti, in general, have been getting more popular in Vietnam. Whether it is tagging or painting intricate wall murals around West Lake, the interest in street art could bring bigger opportunities for commercial enterprises as Vietnamese youth and other thought leaders turn their attention toward alternate forms of expression beyond the traditional outlets, i.e., “rebels,” if you will.

Speaking of  rebels, Harley-Davidson, the symbol of rebels against society, finally arrived in Vietnam last year. With the opening of the first Harley-Davidson dealership in Vietnam, we can expect to see more western culture absorbed and emulated in Vietnam as more and more brands go east. With the high barrier to entry (entry-levels models like the 883 start off around $16,000), there is a premium for being a rebel leader. A complimentary first year’s membership to Saigon H.O.G. or Harley-Davidson Owner’s Group is included with each new purchase of any model. And what are bikers without tattoos? The first Tattoo Convention in Vietnam was held in Saigon last year as tattoos became even trendier and more mainstream.

Hanoi: For Local and Foreign Artists

Even on an educational level, art is becoming more popular in Vietnam. Some of the most popular majors for Vietnamese students include banking and finance. Indeed, there are institutions dedicated to a banking emphasis since it is a conventional career path option for many Vietnamese. Over the last few years, a small but growing number of Vietnamese students have opted to study abroad in an effort to pursue less “safe” subjects and have chosen to go to art schools in the US—something that would have been even more rare a few years ago.

That’s not to say that there are not any locally grown artists; for example, Nguyen Minh Son is originally from Hanoi and draws most of his inspiration from traveling throughout his home country of Vietnam. In addition to art, Mr. Son also has a passion for Kung Fu, which he has been practicing for over twenty years. Over the years, Mr. Son has experimented with various forms of expression as viewed in his gallery and on his website.

Indeed, one does not need to leave Hanoi to become an artist for there are available local art lessons for anyone to join. Knee Jerk, originally from England, came to Hanoi almost four years ago from Melbourne, Australia. Since then, he started doing graffiti in the streets of Hanoi and has been commissioned for art in retail settings. Currently, he offers classes in his studio for people of all ages; his current students include children of expats as well as adults who want to hone their artistic skills. He regularly collaborates with artists from around the world including France, Hong Kong, and Brazil.

As Knee Jerk describes in his own words:

“I am an Artist and Art teacher creating Art and also running classes from my home and studio, Not Pop Studio. My background is graphic design and illustration, which is what I studied at Salford University in England, graduating in 2003. Most of the artwork I produced before coming to Hanoi was digital based, but almost as soon as I arrived in Hanoi, I revisited an earlier love of painting using hand cut stencils and spray paint.

I quickly learned to combine my digital designs with hand cut and paint techniques and I continue to paint everyday, either working on canvas/mural commissions or more self instigated street paintings. I try to paint eye catching pieces of art that also makes people think and not to have “knee jerk reactions” regarding the subject matter of the piece.”

While these two Hanoi-based (Not Pop Studio in Tay Ho, and Minh Son Gallery in Ba Dinh district) artists have different backgrounds, styles, and inspirations, they have produced and presented art all over the world. Both artists are currently interested in having their works displayed in either New York City or San Francisco—please contact Knee Jerk or Nguyen Minh Son directly for more information. For more information on street art in Hanoi, please see here.

What will be the next step for Vietnam’s art, music, and other cultural scenes overall? It’s anyone’s guess, but if recent interest is any indication then there are exciting times for the tattoo, street art, and motorcycle communities in Vietnam. Surprisingly, to some, Vietnam is a suitable place for creation after all and Hanoi is one of its centers.

Being an Expat

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We’re a bit late with the post this week as we spent last week in Saigon. What a change it’s been since last year: massive construction on Nguyen Hue, new buildings, and new faces as some familiar ones have moved on. Saigon is definitely a city in flux–the growing pains are evident trying to navigate around District 1 or District 2–and it seems like it will be that way for awhile as the metro takes shape.

Anecdotally, if an expat in Vietnam makes it to two years in Vietnam then s/he either stays for the long haul or heads to a different place. Thus, there is a staggered mass exodus every two years—which means that the expat community that is present today was largely not around five or more years ago.

In many ways, being an expat in Vietnam is about survival: who can outlast, adapt, and add value in ways that locals and foreign companies will appreciate and are willing to pay for. At the same time, the decision to invest more into Vietnam can be difficult (especially for expat entrepreneurs). Another way to look at it is how integrated should one be in Vietnamese society?

While there are benefits (business rights, visa, and so on) that come with a local spouse anywhere, whatever costs savings by living in a developing nation are wiped out if one is sending his/her child to a quality private school. So there are other considerations for entrepreneurs attempting to integrate into Vietnam beyond learning Vietnamese and moving into a fringe/edge business—especially for older expats. Indeed, it can be hard to change over from a lifestyle business to a scalable business model.

Finding the right balance in Vietnam can be challenging for many people. For example, there is the uninhibited nightlife in Saigon, and there are the midnight curfews in Hanoi. Business meetings can last from two to three hours and even longer if the booze is flowing and the bonds are strengthening. Where does the line for business and personal relationships end? Sometimes, it can be hard to distinguish whether it’s a friend or a business associate who is picking up the check–and sometimes it’s both.

There is a small town feel here—less so than Vientiane or Phnom Penh—but it’s not uncommon to run into the same circle of people in various establishments or at least to meet people who know the same ones that you do. For expats who want to be successful here and in Southeast Asia, Vietnam should be a long term plan. There is no doubt that Saigon, Da Nang (Hoi An included) and Hanoi attract different kinds of expats. But too often, a segment of expats seem to fall into a cycle of complacency, vices, and distractions. Out of those three cities, it’s perhaps easiest to lose a sense of self in the sprawling metropolis of Saigon; the loneliness of being an expat can contribute to a less-than-healthy lifestyle as well.

For certain, mistakes will be made both in business and social settings in a new environment and setting—no one is perfect. The key is to learn from mistakes and to not repeat them again. Even when some people have reached their wits end after being here for years, other opportunities have popped up which have compelled them to stay—but it’s only because they’ve tried and failed previously that they were noticed–and had the reputation to be suitable for a new project. But what drives people to “leave Vietnam for a third time?” Or to stay in Vietnam for years and never learn the language beyond a basic level?

The real opportunity here is to create and shape markets. Vietnam is still in “tree growing” mode. Sure, one day there will be a harvest—but it takes time, money, and other resources to educate consumers, stakeholders, and to build/create a marketplace. To that end, Vietnam needs more entrepreneurial talent, more STEM (Science, Technology, Engineering, Mathematics) talent that knows what it takes to bring a product to the global market, and more people who are interested in Vietnam from a cultural point of view instead of a bia hoi/bia om focus. But, how to attract such talent?

For starters, lower the risk of coming to Vietnam and doing business here (corporate governance), lower the barriers to raising capital here for startups (beyond incorporating in Singapore and keeping a local team here), and promote finding ways to leverage local talent to create products and services that can be differentiated.

Another major pitfall for expats is to adopt local ways of thinking and doing things. It’s very easy to complain and to succumb to some of the craziness that permeates interactions in the workplace and beyond. Staying rooted, being patient, and remaining steadfast during negotiations are valuable qualities to have ample supplies of. However, also knowing when to quit due to wasting time, the expectation of charity, or unprofessional expat or local counterparts can save many headaches for everyone involved. It’s definitely easier said than done and is a skill that takes time to develop.

Above all, expats should find that their tolerance for healthy and smart risks will have increased after living/working in Asia. Whether it’s riding a motorbike to/from work in the middle of crazy traffic patterns, or dating someone from another culture, or seizing a new opportunity, each experience will help shape confidence and character in future situations.

Living and working in a new country is a risk itself—why stop there? Vietnam is not perfect—no country is. But finding the good in situations and people is more of the result of attitude instead of focusing on all the current problems. Part of the trouble is that the more things change, the more they stay the same—especially here, just with fewer expats that you know. In that sense, finding what’s right about Vietnam can be harder than usual. If you’re in a city that you don’t like, then move somewhere else. If you’ve tried a few cities and still aren’t happy then move to another country. This place isn’t for everyone and staying true to oneself and being ethical/moral seems to be a challenge for many, including westerners. Nothing worthwhile is easy.

For those that stay in this part of the world, have a strong sense of self, and see opportunities, “if a whole country is blind and you have one eye, then you can be king.”