Business Etiquette in Vietnam

Mastering the art of business etiquette in Vietnam is crucial for successful professional relationships. Learn the dos and don'ts, cultural nuances, and communication styles to navigate the Vietnamese business landscape effectively. Discover the importance of respect, hierarchy, and building personal connections in this dynamic market.

Basic Vietnamese Business Etiquette

Names: Honor and Respect

Names in Vietnam follow a specific structure, with the surname preceding the middle name and given name. It is considered polite to address individuals by using their respective titles, such as Mr., Mrs., or Ms., followed by their given name. When interacting with senior figures, it is advisable to include their official title, such as Director Nguyen.

Business Cards: A Gateway to Connections

While the exchange of business cards holds significant importance in Vietnamese culture, it is essential to treat each card with respect. Avoid merely pocketing the card without acknowledgment. Instead, arrange the received cards neatly in front of you during meetings to aid in remembering the names and positions of the participants.

Business Attire: Striking the Right Balance

Vietnamese business etiquette leans toward formality, particularly in the northern region. Until a more casual dress code is established, it is recommended to opt for conservative attire, especially for women. This includes wearing modest clothing that covers the shoulders, along with closed-toe shoes. While a full suit may not be necessary, it can be advantageous during the initial stages of engagement. The choice of business attire may vary depending on the location of the meeting, with Hanoi favoring a more formal environment and Ho Chi Minh City adopting a business casual approach.

Greetings: Paying Respect

When meeting senior or older individuals, it is customary to display respect through a handshake accompanied by a slight bow of the head. Unlike in Japan, deep bows or hugs are not part of Vietnamese greetings. Women generally do not initiate handshakes with men unless prompted. Although English is becoming more prevalent, the dominant language remains Vietnamese, spoken by approximately 86 percent of the population. Displaying an effort to learn basic Vietnamese phrases, such as "xin chao" meaning "hello," is greatly appreciated by locals.

Timing: Navigating Holidays and Punctuality

Before planning business trips to Vietnam, it is advisable to check for any public holidays, particularly during Tet, the Spring Festival. Many employees in Hanoi and Ho Chi Minh City return to their hometowns during this period to spend time with their extended families. With long working hours being the norm, it is crucial to respect your Vietnamese counterparts' time and provide a well-structured agenda in advance. Punctuality is generally expected, despite challenges posed by traffic or logistical issues.

Working Hours and Communication: Balancing Professional and Personal Lives

Vietnamese working hours are often long, spanning from 8:00 a.m. to 5:30 p.m., Monday to Friday, and sometimes even including Saturday mornings. A notable cultural practice is the extended lunch break of 60 to 90 minutes, allowing for a short nap. Communication outside of official working hours is not uncommon, as personal and professional boundaries can often blur. Be prepared to receive messages from your Vietnamese partners beyond regular business hours, as they devote considerable dedication to their work.

Relationship Building Skills

Building Trust for Lasting Partnerships in Vietnam

In Vietnam, relationship building is fundamental to business success. As a society influenced by Confucian values, the Vietnamese prioritize trust and personal connections over objective facts and figures. Don't be surprised when business discussions commence with tea (in the north) or coffee (in the south), as these informal settings provide opportunities to cultivate relationships. Embrace personal questions that may arise during conversations, such as age, marital status, or family background. By investing time and energy in fostering relationships, you lay a solid foundation for fruitful business endeavors. Engaging a local partner, already equipped with established relationships, can greatly facilitate market entry and enhance your prospects of success.

Drinking, Eating, Karaoke: Unveiling the Power of Social Bonding

Vietnam's vibrant business culture thrives on social interactions that extend beyond formal meeting rooms. An essential part of relationship building involves sharing meals and engaging in activities like karaoke. It is not uncommon to find groups of businessmen in Hanoi still socializing over a meal long after lunchtime, accompanied by hearty conversations and perhaps a glass or two of Heineken. Be prepared for extended meetings that seamlessly transition into extensive dining experiences. Often, significant decisions related to business propositions are made in these relaxed settings, fostering a sense of camaraderie and trust.

Hierarchy matters in Business Culture in Vietnam

Seating: Observing the Order

During meetings, it is customary to let the host guide you to your seat. Typically, guests are seated to the left, while the host's team occupies the right side of the table. If you find yourself alone in a conference room, it is best to wait for the host to indicate where you should sit. In the hierarchy of seating arrangements, the boss sits in the center, surrounded by key staff members in descending order of seniority. Being aware of these dynamics provides valuable insights into the decision-making structure of the organization.

Concept of "Face" in Negotiations

In Vietnamese business culture, patience is key, and negotiations often require a longer timeframe. Avoid making empty promises, as they can undermine your credibility and cause you to lose face. If there is disagreement, you may be met with silence rather than direct contradiction, as saving face is highly valued. Vietnamese negotiators often approach discussions with a win-lose mindset, emphasizing their own interests. This can make reaching a compromise challenging and time-consuming. Decisions may not be reached immediately during the meeting itself, as internal discussions, consensus-building, or higher-level approvals may be necessary. It is not uncommon for positive decisions to emerge after social activities such as dinners, drinks, or even karaoke sessions.

Key Negotiation Points: Strategies for Success

When engaging in negotiations, it is essential to employ effective tactics:

• Avoid revealing your best price or accepting the first offer. Engage in back-and-forth discussions.

• Exercise restraint when offering compliments. Instead of excessive praise, express your interest in working together.

• Extend the negotiation process as much as possible by addressing various aspects of the offer.

• Keep in mind that decisions may not be made immediately, particularly before dinner, drinks, and social engagements.

• Cultivate patience, especially when conducting negotiations in Hanoi, where the art of negotiation is highly regarded.

• Ensure all agreements are documented in writing for clarity and future reference.

Listen to the Air: Grasping Indirect Communication

Pay close attention to what is unsaid during meetings and be attuned to indirect hints. Phrases like "That will be difficult" or "We'll check that internally and let you know" may imply a reluctance to proceed. Similarly, statements such as "We need to consult with Mr. Trieu and think of ways to change his opinion" could suggest the expectation of a bribe. Developing an understanding of these subtle linguistic cues can greatly enhance your comprehension of the Vietnamese business landscape.

Embracing Flexibility as a Key Trait

The fluidity of the business culture in Vietnam necessitates adaptability and a flexible approach. Last-minute changes are a common occurrence and are not considered rude but rather an integral part of the local business practices. While it is advisable to plan appointments in advance, do not expect fixed dates for meetings a year ahead. Agreements made in the moment may be subject to alterations at short notice.

This flexibility applies not only to meeting schedules and events but also to contractual details and project scopes. It is essential to remain open and adaptable to accommodate changes that may arise during the course of business interactions in Vietnam.

Unique Aspects of the Vietnamese Business Landscape

Pricing: Ensuring Fairness and Trust

If you are working with a distributor, it is crucial to establish a unified pricing structure across the country. Minor deviations of a few hundred Vietnamese Dong (VND) are acceptable, but significant disparities can erode trust in your brand. Running price promotions may raise suspicions among consumers, implying potential product issues or short expiration dates. Instead, consider incentive activities that reward customers for increased purchases.

Cash transactions are still prevalent, although digital wallets are gaining popularity. It is important to build trust with your distributor, as they often act as both sales representatives and debt collectors.

KPIs: Establishing Clear Performance Indicators

Set well-defined key performance indicators (KPIs) for your teams and retail partners. These KPIs should be accompanied by appropriate incentives, such as trips or gifts, to motivate and reward outstanding performance. Display competitions, where stores create visually appealing product displays, resonate well with traditional traders and small-scale retailers in Vietnam.

Investing time in understanding and supporting your sales team is crucial, as their job often involves traveling by motorbike in various weather conditions and even delivering products. By building meaningful relationships with your sales team through regional visits and events, such as New Year gatherings, you demonstrate your commitment to their well-being and foster loyalty.

Legal Points: Navigating Red Tape and Complexities

Navigating the legal landscape in Vietnam can be complex, with a substantial amount of red tape. While laws exist, enforcement may not always be consistent. Engaging in litigation can be a lengthy and challenging process. Matters related to land use are particularly intricate and require careful consideration.

Gifts: Cultivating Thoughtfulness

Small, inexpensive gifts are appreciated, especially when meeting someone for the first time. If you anticipate a long-term working relationship, it is customary to exchange New Year gifts. However, ensure that these practices align with your home governance laws and corporate policies.

Corruption & Crime: Addressing Challenges

Corruption is a concern in Vietnam, as in many countries. Stories abound of officials expecting bribes for favorable outcomes, such as progress on registrations or expedited customs clearance. It is essential to thoroughly brief your partners on your company's stance regarding corruption. While it is crucial to maintain ethical practices, be aware that some competitors may engage in corrupt practices even if you choose to operate transparently.

In terms of crime, apart from pickpocketing, it is unlikely to be a significant issue for business visitors. However, familiarize yourself with common taxi scams and use reputable taxi companies, such as Mai Linh (green) or Vinasun (green and red), to minimize the risk of encountering scams.

Vietnam's rich cultural heritage and rapid economic growth make it an enticing destination for businesses seeking expansion. By embracing the distinct customs and etiquette of the Vietnamese business landscape, entrepreneurs can unlock new opportunities and establish meaningful connections. From demonstrating respect through greetings and attentive card handling to investing in relationship building, these practices pave the way for successful collaborations in Vietnam's flourishing market.