Foreign Businesses and the “Culture Shock” Challenge in Vietnam: When International Experience Becomes a Barrier.
In your view, Sophia, what is the biggest mistake foreign businesses make when entering Vietnam: failing to understand the market, or entering the market with the belief that they already understand it?
Objectively speaking, the biggest mistake some foreign businesses make when entering Vietnam is not that they fail to research the market, but that they believe they understand the market simply because they have access to sufficient data and reports.
I call this the “illusion of market understanding.” They may understand GDP, population, purchasing power, industry size, and other macro-level indicators. But in practice, having those numbers does not necessarily mean they understand the Vietnamese people: how they think, communicate, build trust, and make decisions.
I have seen businesses with strong products, advanced technologies, and business models that have already proven successful in their home markets, yet fail to achieve the results they expected in Vietnam. Sometimes, the issue is not the product itself, but the fact that they bring the exact same approach from their previous market into a completely different one. International experience is undoubtedly an advantage. But if a company does not know how to adapt that experience to Vietnam’s culture, lifestyle, and business practices, that very advantage can become a barrier.
Therefore, I believe that to succeed in Vietnam, foreign businesses should not only ask, “What opportunities does Vietnam offer?” They must also ask, “What do Vietnamese people actually need, and how do they conduct business and build trust?” And there is one point I consider particularly important: having a Vietnamese person by your side does not necessarily mean that you understand Vietnam.
If you want to build a long-term presence in Vietnam, you must first respect the market, understand its people, and know how to adapt your business model to the local reality. The goal is not to turn Vietnam into a version of your home country, but to find a way to align your capabilities with the realities of the Vietnamese market.
You said, “A company can bring capital, technology, products, and business models that have proven successful in China, Singapore, South Korea, or Europe into Vietnam. But at what point does ‘international experience’ become an advantage, and at what point does it become a barrier?”
In my view, the distinction lies in the ability to differentiate between core capabilities and operating practices. Capital, technology, products, management expertise, and international experience can all be brought into Vietnam. However, the way a company organizes its operations, conducts sales, builds business relationships, and makes decisions cannot necessarily be transferred wholesale.
A successful business model is always shaped by a specific context. The fact that a model has succeeded in China does not mean it will automatically succeed in Vietnam, because behind every market lies a different system of culture, consumer behavior, business relationships, regulatory frameworks, and operating practices.
Therefore, when advising a foreign business, I do not usually ask, “Where has your business model been successful?” More importantly, I ask: “Which parts of that model can remain unchanged, which parts need to be adapted, and which parts need to be rebuilt specifically for Vietnam?” That is what I consider strategic localization.
In my view, international experience becomes an advantage when it enables a business to see beyond the immediate market. But it becomes a barrier when a company uses past experience to impose its established way of thinking on a new market.
When entering Vietnam, I do not believe businesses need to abandon what has made them successful. On the contrary, they should retain the capabilities that constitute their competitive strengths, but they must place those capabilities within the right Vietnamese context.
That is also the value of a market advisor: not simply helping a business “enter” Vietnam, but helping it understand what kind of market it is entering, what needs to change, and how to build sustainable long-term growth here.
Ms. Sophia, “Many foreign businesses believe that having a good interpreter or a Vietnamese person acting as an intermediary is enough for them to understand the market. In your view, what are they missing?”
In my view, that approach is valid, but it is not entirely sufficient. What foreign businesses are lacking is not simply someone who speaks Vietnamese, but someone who understands the gap between language, people, and the market.
An interpreter may translate the words accurately, but that does not necessarily mean they understand why something is being said that way, what is being explicitly communicated, and what is being deliberately left unsaid. This is particularly important in business negotiations. If communication is limited to language translation without genuine experience in the business environment, it is very easy to be “correct in words, but not necessarily correct in meaning.”
I believe an effective business intermediary must do more than translate language; they must translate the underlying business thinking as well. There are things that a foreign business may understand very clearly internally, but when brought into Vietnam, those ideas cannot always be communicated in a way that is appropriate to the local context. At that point, the intermediary needs to connect what the business wants to communicate, what the local partner genuinely needs, and what the market is prepared to accept, and turn these three dimensions into a common ground.
Ultimately, a business must succeed through its own capabilities and its core market-response strategies and policies. But the right person to bridge the gap can help ensure that the business is properly understood, appropriately perceived, and positioned to move in the right direction from the very beginning.
And in my view, that is the true value of having the right partner alongside you when entering a new market.
Foreign Businesses and the “Culture Shock” Challenge in Vietnam: When International Experience Becomes a Barrier. What are your thoughts on this?
According to Dr. Nguyễn Thị Bích Ngọc, one of the major challenges foreign businesses face when entering Vietnam lies not in capital or technology, but in their ability to localize the way they conduct business.
Do not confuse understanding the market with understanding the people: Having data, reports, and strategies does not necessarily mean that a business understands Vietnam. Vietnamese communication styles, approaches to building trust, decision-making habits, and ways of forming business partnerships have their own distinctive characteristics. Without understanding these factors, businesses can easily apply a model that works elsewhere but is not well suited to the Vietnamese market.
Cultural differences can become operational challenges: An overly rigid management style, excessively direct communication, or the wholesale application of procedures from the parent company can create a disconnect with the local workforce. Without appropriate adaptation, cultural differences can gradually evolve into issues affecting human resources, performance, and organizational engagement.
Having a good product is not enough to create a market: A product that has succeeded overseas may not necessarily be a perfect fit for Vietnamese customers. Businesses need to adapt everything from market positioning and customer engagement to the ways in which they establish trust.
Localization does not mean abandoning your identity: Dr. Bích Ngọc believes that businesses do not need to abandon what has made them successful. What matters is clearly identifying what needs to be retained, what needs to be adapted, and what needs to be relearned from the Vietnamese market.
“Do not bring a successful business model into Vietnam and expect the entire local operation to adapt to it. Bring your capabilities, and learn how to create value that is relevant to Vietnam.”
In her view, this is precisely the spirit of “Glocalization” — thinking globally while acting in ways that are appropriate to the local context. Success in Vietnam is not simply about bringing a business into the market; it is about enabling that business to truly integrate into the market while preserving its core capabilities.
“There is a paradox: many foreign investors are extremely cautious when it comes to finance and technology, yet they can be surprisingly less rigorous when choosing a local partner in Vietnam. In your view, why can ‘choosing the right person’ sometimes be even more important than ‘having the right product’?”
There is a saying: “When you trust someone with responsibility, do not doubt them; if you doubt them, do not entrust them with responsibility.” Choosing the right person to accompany you is a make-or-break decision for foreign investors. Finance and technology are necessary conditions, but the right local partner is often the decisive factor that determines whether a foreign business succeeds or fails when entering the Vietnamese market.
The answer to this paradox — why many investors are highly cautious about capital and technology yet can be less careful when selecting a partner — lies in three key factors:
Products are static; people and markets are dynamic: A strong product that has succeeded in international markets does not automatically guarantee success in Vietnam unless it is adapted to the local market with sufficient flexibility. The right partner understands how to fine-tune the offering, position it appropriately, and bring it to the right customer segments. Conversely, choosing the wrong partner can turn an outstanding product into a commercial failure.
The right partner can bridge legal and cultural risks: Finance and technology cannot, by themselves, negotiate with regulatory authorities or resolve cultural differences within a local workforce. A knowledgeable local partner who understands Vietnamese business culture, has established credibility, and is genuinely committed to shared interests can help foreign investors navigate non-tariff barriers and mitigate risks that may not be immediately visible.
Execution speed and resource optimization: Technology can be acquired and capital can be raised, but genuine market knowledge and high-quality business relationships take years to build. Choosing the right partner can significantly shorten the cycle of trial and error, accelerate execution, and improve the efficiency of market penetration.
Ultimately, the right product may help a business enter a market, but the right partner is what can help it establish a sustainable presence and grow over the long term. Foreign investors should exercise the same level of rigor in assessing and selecting the person leading their local partnership as they would when conducting financial due diligence — from day one,” emphasized Dr. Nguyen Thi Bich Ngoc
“If a foreign business looks at Vietnam only through figures such as GDP, population, growth rate, labor costs, and market size, what are they missing?”
I believe what they are missing is the gap between Market Data and Market Reality.
Market Data tells us how many people live in Vietnam, the size of its GDP, its growth rate, which industries are expanding, and what income levels look like. These data points are essential, but they only tell us what the market looks like on paper.
Market Reality, however, is a different story: who is actually buying, why they buy, who makes the decision, whom they trust, how different regions operate, and what a business needs to change in order to be accepted by the market.
Vietnam is not a homogeneous market: Hanoi is different from Ho Chi Minh City. Nha Trang is different from Da Nang. B2B is different from B2C. Manufacturing businesses operate differently from service businesses. Even within the same industry, different customer segments can have very different behaviors and decision-making processes.
Therefore, I do not believe that a market report alone can fully answer the question: “Will this business succeed in Vietnam?”
A report may indicate that the market is very large. But market reality may show that the product is not yet a good fit. Data may indicate strong demand. Yet market reality may reveal that customers do not have sufficient trust to make a purchase. A business model may be highly successful in another country, but when brought to Vietnam, it may require changes in the sales approach, relationship-building practices, management methods, and even product positioning.
That is why, when working with foreign businesses, I do not stop at reading market data. I want to take them one step further: to cross-check the data against how the market actually operates.
I call this the journey from Market Data → Market Reality → Market Strategy. Data helps us identify opportunities. Reality helps us determine whether those opportunities are genuinely viable and relevant.
And strategy is what turns that understanding into business results.
There is one question I often want foreign businesses to ask themselves before entering Vietnam: Are we looking at Vietnam simply as a market, or are we truly seeing how this market operates? Because ultimately, a large market does not automatically create success. It is the alignment between a business and its market that creates success.
For me, understanding a market does not mean knowing as many numbers about Vietnam as possible. It means understanding what is happening behind those numbers.
“If an international investor is preparing to enter Vietnam and you have only 30 minutes to tell them one thing, what is the first mindset you would want them to change?”
“I have spent many years drawing lessons from hands-on experience working with both large and small corporations. But perhaps I would only need five minutes to share one truth that foreign investors — particularly Chinese businesses, many of whom are partners I deeply value, respect, and have worked closely with for many years — should humbly listen to before setting foot in Vietnam (laughs).”
“They are highly capable, have strong financial resources, advanced technologies, and tremendous scale — none of that can be denied. But the most costly mistakes made by global corporations rarely come from a lack of resources. More often, they stem from ‘The Arrogance of Success.’ And there are three critical mindset shifts that I always encourage them to recognize:”
1. Shift from “Bringing the Solution” to “Coming to Learn”: Do not take a formula that has succeeded in Europe, the United States, or China and expect the local market to simply accept it. Capital and technology are advantages, but the Vietnamese market itself should determine what can be retained, what needs to be adapted, and what must be fundamentally redesigned from the ground up.
2. Understand “Local Characteristics” instead of applying standards mechanically: Vietnam has rapidly evolving consumer behavior and a particularly high degree of cultural sensitivity. Even an internationally standardized product can fail if it lacks the cultural nuance required in interpersonal conduct, communication, and the ability to build trust with local people. This applies equally to relationships with employees, business partners, and members of the organization itself.
3. Abandon the ambition to turn Vietnam into a “miniature version” of the home market: Success in Vietnam does not lie in turning the country into a dependent or secondary market. It lies in the ability to think and operate “Glocal” — learning how to succeed through the very values, standards, and market dynamics that shape Vietnam’s own identity.
In short: If you reduce your confidence in the old formula by one part and increase your humility toward understanding a new market by one part, a foreign business can truly put down roots and take flight in Vietnam only when it stops viewing Vietnam as a “market for consuming imported business models” and starts seeing it as a “partner in mutual growth.”
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