Vietnam Culture of Business

By | July 24, 2022

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public Holidays

Introduction

Business culture in Vietnam is not fundamentally different from other countries in the Southeast Asian region. Emphasis is placed on direct personal ties and cultivating long-term relationships with business partners. Compared to Western culture, you need to expect slower processes when negotiating business and longer reaction times. Visit Animalerts for more information about Vietnam culture and traditions.

Addressing

Since many Vietnamese have the same last name, usually only first names are used to address people, but with Mr./Mrs. On business cards, surnames are usually printed first, then first names. As a rule, we address you by the last name shown on the business card. Titles are mainly used for medical or academic ranks (Dr., Prof., etc.). Reading the full name and function of a high-ranking person on the presented business card is a sign of respect.

Introducing and exchanging business cards is one of the aspects of social etiquette that is still given quite a lot of emphasis in Vietnam. It is appropriate to give a business card to important people with both hands, in any case it is necessary to give and accept the business card from hand to hand and not to “throw” the business card on the table. Although from the Vietnamese side we are not always offered a business card by everyone present, it is advisable to give your business card to everyone. In the case of large delegations, the exchange of business cards may initially take place only among the most senior members, others may exchange business cards after the end of the meeting. The content and arrangement of business cards is not uniform and important, but business cards are absolutely necessary.

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Business meeting

Before the very first meeting, it is essential that the Vietnamese partner has sufficient information about the Czech company and the business plan being discussed. This information must be sent in writing and well in advance of the proposed date of the meeting. Although large business firms understandably employ people who know foreign languages ​​(English is the most common), many managers and most people in the provinces speak only Vietnamese. Therefore, printed materials in English with an additional Vietnamese translation make a good impression. Only after a previous written introduction is it advisable to request a meeting, preferably again in writing, then by phone. It is ideal if a third party trusted by the partner can recommend the Czech company to the Vietnamese partner.

Due to the steady, calm work rhythm in Vietnam, it is advisable to arrange meetings in the morning from nine o’clock or from 2-3 in the afternoon, although the partner can also suggest another (later) date. In Vietnam, until recently, work was also done on Saturdays, today this time is already considered private, and therefore it is up to the Vietnamese side to propose a Saturday meeting date.

With some exceptions, the Vietnamese tend to be surprisingly punctual. This is apparently the result of respect for authority. It happens that they arrive 5-10 minutes before the agreed date, punctuality is also expected from our side and excuses about the traffic situation are not appropriate. However, when fulfilling agreements, frequent delays can be expected from the Vietnamese side due to various “objective” reasons, while strict adherence to the agreed deadlines is required from the foreign partner.

When dealing with Vietnamese partners, the Czech businessperson is usually most surprised by the Asian reticence, long-windedness and reluctance to immediately discuss specific business conditions. The Vietnamese partner will also usually not tell you a clear no during the negotiations. It is therefore necessary to ask follow-up questions to avoid possible misunderstandings.

Vietnamese partners are usually well prepared for the negotiations, above all they have a good knowledge of the competition’s prices. Exaggerating the quality of one’s own goods or slandering the quality of competitors is undesirable.

Similar to other Asian countries, the life of the Vietnamese is influenced by a number of customs, the rational core of which often cannot be “discovered”, but they are strictly observed. This applies to all areas of life: there are “lucky periods” when you can get married (or have children), another time is suitable for closing a business, and dietary habits are also governed by the lunar calendar. This superstition can also influence business dealings and it is necessary to take it into account.

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The Vietnamese have been used to “fighting” in their own way for generations, and this is also reflected in business. They must feel when they close the deal that they have gained an enormous advantage and that they have won the negotiation. Therefore, it is necessary to calculate in advance with a significant discount and not to be too obviously happy if it is possible to conclude a deal with a significant profit. It is better to behave modestly, even downright worried. It can be expressed that it is good to penetrate the Vietnamese market, but the product was offered at practically “production cost”. In many cases, if the business partner is not the end user of the product, especially if he is an employee of a state-owned firm, he is expected to be offered a personal referral commission. Corruption has not yet been eradicated in Vietnam, although the current government is trying to, or at least beginning to call a spade a spade.

Business negotiations in Vietnam are usually very long and wordy. It is therefore necessary to be patient during the meeting, even if the questions may seem unnecessarily repetitive and sometimes even stupid. In the vast majority of cases, the Vietnamese partner thus tests the objectivity and truthfulness of the argument and considers the matter from many points of view.

During negotiations, the Vietnamese are usually able to keep a stone face (rather like a smiling Buddha than a poker player), a warning sign for us should be the increased intensity of the smile, which may not always express joy, but rather embarrassment, annoyance, or even hidden anger. A calm demeanor is also expected from the other party – excited gesticulation, facial expressions and similar expressions are considered impolite.

The differences in trade between North and South Vietnam are not very significant. The differences can be seen more in the general cultural differences between the north and the south. Business partners in the south tend to be more relaxed, generous and willing to make possible concessions, while partners in the north tend to be more sensitive to the price aspects of the contract.

In standard business meetings, it is usually not customary to serve alcohol. In contrast, alcohol is almost always served at business lunches and dinners. While beer is a universal “people’s” drink, at official (especially business) social lunches or dinners, the host usually offers branded French wines or brandy, which is an expensive affair, but this declares the host’s social status (or solvency). It is not clear whether Vietnamese people really like foreign wines or brandy, but it is a fashionable and prestigious matter. Flowery toasts are usually given at an official social event, but Vietnamese partners will also appreciate repeated toasts without speeches during the meal. When toasting, it is appropriate to praise the Vietnamese hardworking and hospitable people and the organization (company) of the host. The initiative to leave must always come from the guest, an attentive Vietnamese host will not allow himself to indicate the need to end lunch or dinner even when pressed for time. The rate of consumption is not limited in any way and drunkenness is not a problem.

Communication

The basis of business communication in Vietnam is personal presence. It is only exceptionally that a deal can be concluded through remote communication. A personal meeting is necessary to gain the trust of the partner and to successfully close the deal.

The standard language of communication for most large companies in Vietnam is English. However, a large number of managers in the public sector do not have a good enough command of English. For business meetings with managers of state enterprises, it is therefore advisable to always have an interpreter with you. The same applies to communication with state institutions, where you cannot do without an interpreter.

The concept of saving face applies in Vietnam as it does in the surrounding Southeast Asian countries. Saving face is extremely important to the Vietnamese. During negotiations, it is therefore necessary to be careful so that the Vietnamese counterpart does not get into an embarrassing situation and to pay attention to a certain tact, sensitivity and restraint.

Business negotiations are always conducted by the highest-ranking person. As a rule, other participants do not enter the meeting, they can only provide more detailed information at the invitation of the superior. The number of members of the negotiation team from the Czech side is flexible and depends mainly on the size of the Czech company. Ideally, it should consist of a sales director and at least one technical employee who is able to provide detailed information on the technical details of the product being offered. The age and gender composition of the team does not play a major role in Vietnam.

It is also important to choose appropriate business attire for business meetings in Vietnam. In the “winter period” (ie from December to March) the usual dress code is in Europe, i.e. a suit with a tie, for important meetings or evening occasions a dark suit, but in the “summer period” (from April to November) it is sufficient for ordinary meetings shirt with a tie. For very official meetings at a high level, a suit is appropriate even in the hot summer season, at least for the beginning of the meeting. However, due to the local hot and humid climate and the fact that many ordinary Vietnamese workplaces do not have air conditioning, Vietnamese people often come to meetings without ties, without wanting to show a lack of respect. However, shorts are still considered completely unsociable or downright offensive clothing in Vietnam.

Recommendation

Basic principles when dealing with Vietnamese partners, respecting which will help to promote the business plan:

  • Establish a personal relationship with your partner (find out his hobbies, invite him to the Czech Republic, pay attention to him properly here).
  • Criticize indirectly and avoid confrontation.
  • Always smile, be polite and pleasant.
  • Don’t complain about the little things.
  • Never show anger – there is a risk of losing your partner’s respect.
  • Don’t obviously try to gain an advantage over your partner – you need to be cooperative and work together. One battle won can sometimes lose the war.
  • Take your time. Gradually moving from general things to specific things will help the partner to better understand the proposals.
  • Allow for delays – factor them into the program.
  • Prepare the project well and be specific in your argumentation. The Vietnamese tend to have a good overview of competing projects (manufacturers) and are very pragmatic in valuing benefits.
  • Always calculate with discounts and commissions. The price factor is decisive in the local market and is often fatal for suppliers of too high-quality (and therefore expensive) goods.

Public Holidays

  • New Year (Tet Duong lich) – January 1st
  • Lunar New Year (Tet Nguyen Dan) – four days (starting from the day before the first day of the first lunar month, in the period from the end of January to mid-February of the calendar year)
  • Victory Day (Ngay Chien Thang) – 30 April (anniversary of the surrender of the government of the Republic of South Vietnam on 4/30/1975)
  • Labor Day (Ngay Quoc te Lao dong) – May 1
  • National Day (Ngay Quoc Khanh) – September 2 (Proclamation of the Declaration of Independence of the Democratic Republic of Vietnam by President Ho Chi Minh on September 2, 1945)

Vietnam Culture of Business