With Vietnam’s economy growing strongly, combined with a sense of unease about expanding or continuing in China, many companies see the neighbouring country as an increasingly attractive option. Do you know about business etiquette in Vietnam though?
Over the years I’ve seen many articles about business culture in China – I have one myself – but rarely about the do and don’ts in Vietnam business. Many of the points I make in my article about the cultural differences between US and Japanese sales styles also apply to Vietnam so if you are feeling frustrated about your Vietnamese partners, or if you’re Vietnamese but can’t seem to break through to sales success in the US, then maybe you might like to read that too.
Let’s Start with the Basics
As you can see at first glance, Vietnam is pretty long and thin and this also defines the culture to some extent. It’s around 1650km from the very north down to the south, whilst being just 50km wide at the narrowest point.
Historical cultural influences include from the Chinese neighbours (the country was a Chinese colony for many centuries), from the French Indochine colonial period, and the war with the US during the 60’s & 70’s which ended with Vietnam becoming a Socialist Republic.
These days communism is capitalism although the legal system & some aspects of government are clearly still more socialist in nature. Still the Vietnamese dragon is definitely on the rise and the pandemic hasn’t changed that fact.
There are considerable cultural differences between business culture in Hanoi, the capital, and Ho Chi Minh City, the economic hub in the south – & central Vietnam is different once again.
Although the differences are beginning to close between urban, provincial and rural living standards there are also still differences.
Whilst of course, you can’t generalise about a nation of almost 100 million people, there are a few characteristics which are valued in society.
Culture has been “flavoured” by Confucianism meaning that as in other countries in the region, traditional values are still important and family and relationships are in the foreground of business culture.
Humility, restraint and modesty are still seen as virtues to adhere to and most visitors would certainly observe that the Vietnamese are extremely hard working, friendly and show great national pride. Don’t poke fun at presidents (especially Ho Chi Minh) or heroes as this is perceived as highly offensive and might even land you in gaol.
The streets of the 2 largest business centres have a dynamic that can make business in Vietnam rather stressful.
The ABCs of Vietnamese Business Etiquette
Some of these points are generally applicable around the region so I’ll keep them brief:
When you see a name it will be written with the structure Surname – Middle Name – Given Name
eg. Pham Bing Anh
It’s polite to address people by Mr/Mrs + their given name – I got used to being called Ms or Mrs Kathryn – or if they are a senior person, perhaps also by their title. eg Director Nguyen
This is made much of in many cultural awareness seminars and yes it’s important, but not the be all and end all if you get it wrong. The key thing to remember is to treat a card with respect and not just shove it in your back pocket. In a meeting it’s useful to have the cards of the participants lined up in front of you anyway to help remember what may be unfamiliar names for you.
As in most countries around the world, my advice would always be to err on the side of formality until you know your hosts better. Especially in the north, business etiquette in Vietnam tends to be more conservative. That means, especially for women, a more modest form of clothing with closed toe shoes and shoulders covered. It doesn’t mean you have to wear a suit all the time, although it can be a good idea especially for the first day of an initial visit.
It’s important to give respect to more senior or older members. A handshake or short bow of the head are quite customary – no bowing like in Japan, and hugging isn’t usual. For women, you’re not usually expected to shake men’s hands so I often just wait to see if anyone makes the first move and go with that.
Check out when any public holidays are before you plan your trip. Especially around Tet – the Spring Festival – many employees from companies in Hanoi or HCM will return to their home towns to visit their extended family. Employees in Asia generally work long hours with not much time off so those visits home are really important to them.
Make sure that you make your appointments before arriving in Vietnam, and send an agenda in advance. If it’s necessary get your documentation or presentation translated too.
Be punctual! It’s not always easy in Hanoi or HCM but is a generally accepted part of business life that you should be on time.
You might consider also investigating what are auspicious days (good for signing contracts or organising events) but also which days to avoid. eg the 7th of the month is considered unlucky by many, as is the 7th lunar month (around July/August time) which is known as the Ghost month, when the gates of hell are opened and the spirits can wander around freely…
Working Hours and Communication
Working hours are often long in Vietnam (8-5:30 Mon-Fri as well as often including Saturday morning). The lunch break may last 60-90 mins, giving time for a short nap.
Despite this, many people have few boundaries these days between work and private lives so you may feel like you are receiving messages at least 20/7 from your partners.
Business Etiquette in Vietnam Demands Relationship Building Skills
As with other countries where society is founded in Confucianism, it’s essential to take the time to build relationships. Having a good relationship with someone can make all the difference when it comes to a purchasing decision or a question of whether (or not) your product registration makes progress with a government ministry so it pays to invest time and energy here.
Business culture in Vietnam is built on trust rather than purely on objective facts or business figures, so don’t be surprised when you’re expected to sit down and drink tea (in the north) or coffee (in the south) before starting out with any kinds of business discussions. Also don’t be put off either if some of the questions are more personal than you might be used to from a relative stranger in Europe or the US. eg age, marital status, whether you have children or not… 😂
Take the time this stage needs as it will stand you in good stead later. Without a foundation of trust, your business efforts are unlikely to be successful. Many of the do and don’ts in Vietnam business are far less important than this point.
It’s also the reason I’d strongly recommend working with a local partner, who already has those key relationships, in order to ease your market entry.
Drinking, Eating, Karaoke
These are all vital parts of the relationship building process in Vietnam. If you go to a restaurant in Hanoi in the middle of the afternoon, you will usually find at least one group of businessmen still there from lunchtime – usually a little the worse for the amount of Heineken consumed, but still picking at the now cold dishes in front of them.
Be prepared for long meetings to move on into seemingly even longer meals. You’re more likely to get a positive decision for your business proposition after an evening of consumption than directly in any conference room.
Hierarchy matters in Business Culture in Vietnam
I mentioned above that seniority in a company and hierarchy matters, but remember that this also refers to perhaps seemingly small points such as seating arrangements during your meeting.
Let the host seat you when you arrive for a meeting. Usually that means the guests to the left and the host team on the right of the table – look at where the presentation screen is if you’re unsure 😉. Of course, if you press ahead and plonk yourself down, your hosts will probably be too polite to mention it, but it doesn’t make a great impression.
The boss sits in the middle, with his or her key staff to the left and right in descending order of seniority. Keep an eye out for this, to give you a clear picture of who the decision makers are.
Be Patient in Negotiations – the concept of face is also important
Without wishing to generalise, Asians are normally better than we Europeans at playing the long game.
Never make an empty promise as this will lose you credibility with your partners (as you will have lost face). If the people you are talking with disagree, you are likely to be met with silence rather than being contradicted – again for the same reason of saving everyone’s face.
The Vietnamese often see negotiations as a win-lose situation and certainly don’t want to be on the losing end. Sometimes this makes it hard to reach a compromise if they are fixated on getting the best solution for their interests (again, it can take a long time)
Negotiations are usually slow with long discussions. Be prepared to accept that a decision might not be made that day at the meeting table. It might require additional internal discussions. This could be due to internal red tape or the need for group consensus to be reached, or simply for a committee to discuss at length with a senior member of staff who then will make the decision without the pressure of having you sitting in front of him.
You might be lucky and get a decision in your favour after the dinner, drinks and perhaps karaoke round…
Key Negotiation Points
- Don’t open with your best price (or accept the first offer made)
- keep compliments restrained eg. I think we could work together, rather than “oh I absolutely love your work”
- extend the negotiations as far as possible – always pick at something in the offer made
- don’t expect decisions before dinner & drinks (& maybe karaoke)
- be PATIENT – especially in Hanoi, where negotiation is an artform
- make sure you get written agreements
Listen to the air
Be sensitive to what isn’t being said in the meeting or to indirect hints about what is really going on.
eg That will be difficult or we’ll check that internally and let you know may be ways of saying “no” indirectly.
eg. We need to consult with Mr Trieu and think of ways to change his opinion…. We probably need to give some kind of a bribe in order to get this done.
eg. You need to say thanks to him …. some kind of a gift or perhaps even cash will be expected from you in order to get things moving.
Most aspects of business etiquette in Vietnam are pretty straightforward, but it is easy to miss these subtle linguistic hints if you lack experience in the market.
Vietnam Business Etiquette requires you to stay flexible
I have often struggled with this point. Last minute changes are not considered to be rude but are simply a part of the business culture in Vietnam. (So whilst I’d recommend that you plan your appointments before you arrive in the country, don’t expect to pin your partners down to a concrete date for meetings a year ahead. Yes, they may agree at the time, but chances are that they’ll change their plans at short notice.
This can apply to meetings and events, but also to details of the contract you thought you’d finalised or the scope of the project you just started.
Other Important Points about Business Customs in Vietnam
These are not so much etiquette, more things about the way that the market works.
If you’re working with a distributor then make sure that they insist on fairly unified pricing across the country. A couple of hundred Dong (VND) +/- isn’t going to kill your reputation, but otherwise you will give an untrustworthy impression of your brand.
Remember that running price off promotions will be understood by consumers as a signal that something is wrong: maybe there’s a problem with the product or it’s short dated – it’s better to run incentive activities to give consumers a gift if they buy more.
There is still a lot of cash trading, although digital wallets are becoming more common – this has trust implications if your team (= at your distributor) are also effectively the debt collectors.
Set clear key performance indicators for both your teams and your retail partners. These should be backed up with incentives such as trips or gifts.
Display competitions (who can make the best one) work well in Vietnam as many stores are traditional traders/mom & pop type stores who enjoy to create beautiful displays of certain kinds of products.
Being a sales person in Vietnam can be a really tough job as it means you’re out on a motorbike in all weathers, often using that vehicle to deliver products too. So it not only makes sense to be extremely thoughtful about the way you incentivise your sales team, but also to take the time to get to know them through regional visits and events (eg company meeting & party at your distributor in the New Year).
There is a lot of red tape but laws are not always effectively enforced and any form of litigation will be a long-lasting headache.
Everything to do with land use is extremely complex.
Small inexpensive gifts are always welcomed, especially if you are meeting someone for the first time.
If you are working with a company over many years then certainly New Year gifts should be given – of course this is something you also have to align with your home governance laws too.
Corruption & Crime
As in many countries corruption is an issue in Vietnam & you will always hear stories of officials expecting to have their palms greased before your registration makes progress or your container is released from customs.
What I would say is, make sure your partners are thoroughly briefed on your standpoint on this. This is especially critical if tenders form part of your business model where bribes are often a topic. You also have to accept that at least some of the competition will employ such means, even if you work completely “cleanly”.
Crime, apart from pickpocketing, is unlikely to be a huge issue for you if you are visiting Vietnam for business. The most likely thing that may happen is one of the global taxi scams that you probably know anyway from other countries: either the meter runs at a faster rate than usual or the driver takes a roundabout route. The best companies to use are Mai Linh (green) or Vinasun (green & red) as not only always run the meter, they also have card machines – you’re never 100% safe from taking scenic routes though.
Do and Don’ts in Vietnam Business
Of course, it’s impossible to generalise about how each person or company is going to work, but by taking care to give face and always showing respect, you can go a long way to avoid any major issues with Vietnamese business etiquette. It’s not always easy to remember about not contradicting people and picking up all the subtleties requires experience as well as an increasingly deep relationship with the company or persons in question.
Many of the do and don’ts in Vietnam business are pretty much common sense for Western Europeans, but may not be so obvious if you come from different cultures. Of course, please do take the time to investigate about GENERAL politeness as well before your visit. There’s no point being able to read the unspoken subtext in the conference room if you go on to stick your chopsticks upright in your rice during dinner…
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