Five Mistakes Western Companies Make When Entering Vietnam

1. Treating Vietnam Like a Cheaper Version of China

This is the most fundamental — and most common — error. Vietnam is not a smaller China. It has a distinct business culture, different regulatory frameworks, and its own commercial dynamics. Companies that enter with a “copy-paste from China” strategy consistently underperform those that invest in understanding the local context.

Vietnamese decision-making tends to be more relationship-driven and consensus-oriented than in China. Hierarchies exist, but influence often flows through informal channels. The sales approach that works in Shanghai will not automatically work in Hanoi or Ho Chi Minh City.

2. Underestimating the Importance of Local Presence

Many Western companies attempt to enter Vietnam remotely — through email campaigns, virtual meetings, and occasional visits. In a market where trust is built through face-to-face interaction and consistent presence, this approach generates interest but rarely converts to revenue.

Vietnamese business partners and clients want to know you are committed. A local office, a local team member, or a dedicated local representative signals that commitment in a way that a Zoom call from Frankfurt or New York cannot.

3. Applying Western Sales Timelines

B2B sales cycles in Vietnam are typically longer than Western companies expect. This is not inefficiency — it reflects a business culture that prioritizes relationship-building before transaction. Rushing the process signals disrespect and erodes trust.

Successful companies plan for a longer initial cycle and invest in the relationship phase. The payoff is significant: once trust is established, Vietnamese business relationships tend to be more loyal and longer-lasting than their Western equivalents.

4. Neglecting the Regulatory Landscape

Vietnam's regulatory environment is evolving rapidly. What was true two years ago may not be true today. Companies that rely on outdated information — or worse, assume that regulations mirror those in other ASEAN countries — encounter delays, compliance issues, and unexpected costs.

Key areas that require current, local expertise include: foreign ownership restrictions by sector, tax incentives and obligations, import/export licensing, and labor regulations. Working with a local partner who maintains current regulatory knowledge is not optional — it is essential.

5. Hiring Before Validating

The instinct to “hire a country manager” as the first step in market entry is understandable but often premature. Without validated market demand, a clear value proposition for the local market, and an established pipeline, a country manager has nothing to manage.

A more effective sequence: validate the market through structured outreach, build initial pipeline and relationships, and then hire permanent staff to manage proven demand. This approach reduces risk, provides better data for the hiring decision, and ensures the country manager inherits momentum rather than starting from zero.

The Common Thread

Each of these mistakes stems from the same root cause: applying assumptions from familiar markets to an unfamiliar one. Vietnam is a market that rewards patience, local knowledge, and genuine commitment. Companies that invest in understanding these dynamics before investing capital consistently outperform those that don't.

The most successful market entries we observe share three characteristics: they start with validation rather than commitment, they prioritize local presence and relationships, and they adapt their approach based on market feedback rather than headquarters assumptions.