Singapore, May 2023 – Embarking on a new market entry journey is like venturing into an uncharted territory, where the thrill of untapped opportunities meets the complexity of navigating unfamiliar landscapes. Vietnam, with its flourishing economy and thriving consumer market, has caught the attention of many businesses seeking growth and expansion. It was amidst this backdrop that KILSA had the privilege to co-host this sharing session with Republic Polytechnic at Draper Startup House to touch on the topic “The realities of market entry into Vietnam – what are the areas to consider”.
The genesis of this collaboration between KILSA and Republic Polytechnic (RP) began in March, when RP was furnishing up their Travel & Learn Programme for Da Nang, Vietnam. RP was looking for partners to assist in activities in their itinerary and provide value to the participants, which is what brought KILSA into the picture. With an established Vietnam office and local network, KILSA was recognised by RP as a thought leader and an enabler in the domain of market entry into ASEAN markets – especially Vietnam. Needless to say, it proved to be a huge success.
The session kicked off with a keynote address and introduction of KILSA by Sean Tan, Senior Managing Partner – KILSA Global, highlighting the challenges businesses face in market entry and how KILSA has been able to provide a comprehensive and seamless process for businesses with consistent success.
Applause filled the room as the event’s key speaker Dat Pham, Partner – KILSA Vietnam, began his insightful presentation on market entry into the Vietnamese market. In his presentation, Dat addressed key questions such as:
Is it a good idea to expand internationally?
Is Vietnam a good market to expand into?
Do I have the ability and resources to start my business in Vietnam?
Do I have the means to manage my business well in Vietnam?
Dat certainly did not disappoint as he discussed the potential and key factors driving the Vietnamese economy, offering his perspectives and shedding light on the realities of market entry into Vietnam and the areas that require careful consideration. Here are some key takeaways from the session:
Market Research and Analysis
As with every market entry, there is never enough emphasis on the importance of conducting thorough market research. Whether it is to gain insights into the local consumer behaviour, market trends, and competitors, overlooking any aspect can be detrimental to the success of the market entry.
Big, Growing Market
Vietnam’s GDP is growing steadily at 6-7% annually and Vietnam has a young population of close to 100 million people, which is about 16 times that of Singapore. Online presence and savviness is also strong as internet access is high with the majority of the population owning a smartphone. On top of producing a few successful tech unicorns such as VNG and VNPay, Vietnam is also a new destination for manufacturing (Nike, Foxconn) and investments.
Optimistic Economy
Vietnam’s economy is growing fast, and growing strong. This is largely attributed to the abundance of cost-effective labour for manufacturing, coupled with strong internationally-educated young professionals. However, an important consideration is that bureaucracy is still high.
Politics and Social
Politics in Vietnam is relatively stable, which makes a conducive and favourable environment for business. However, to scale up businesses, it is important to have connections with partners in the business ecosystem. In the social aspect, Vietnam is also starting to see improvements in gender gap and quality of life as more people are entering the middle-income category.
Robust Technological Growth
In recent years, Vietnam has seen massive growth in technology and innovation, largely due to the government’s strong push to develop Vietnam as a technological hub. Yet, investment in the number of registered patents are still low and have much more potential to develop in the next few years.
Environmental Concerns
Despite Vietnam’s optimistic economic growth, environmental protection is lacking and worsening due to the high economic growth trade-off. With a global emphasis on increasing environmental responsibility, this can be a concern for businesses.
Legal and Regulatory Framework
Given Vietnam’s complicated and lengthy legal process and procedures, important considerations such as business registration, licensing, intellectual property protection, and compliance with local laws can get very tedious when entering the Vietnamese market.
Localization and Partners
Reliable local partners are essential pillars to have in your business when you enter a new market. Having local and seasoned experts who truly understand the market is paramount in shaping your business practices, product offerings and marketing strategies. The ability to fine-tune your business to cater to the cultural nuances and consumer preferences, and the ability to navigate the legal requirements, are what sets a successful market entry apart from a mere touch-and-go.
A lively Q&A session ended this exclusive event; and the evening was bookended with a networking session with the participants and other entrepreneurs who were guests from Draper Startup House.
Nevertheless, with a favourable and optimistic economic environment, Vietnam is a promising country and market for businesses to expand into. With the many opportunities present, it is important to emphasise again the crucial role of thorough preparation and strategic decision-making when entering the Vietnamese market. This stems from reliable local partners who are able to help you navigate the complexities of the market effectively. If you are not familiar with the Vietnamese market, it is always a good idea to approach a market entry specialist like KILSA for advice. Just make sure that they have an established and credible local network and resources, which KILSA has.
