This is a case study contributed by Mike Kim, graduate student of the McDonough School of Business at Georgetown University. It was originally published in the book International Marketing by Professor Michael R. Czinkota and Professor Ilkka A. Ronkainen in Georgetown University 2010.
Vietnam is currently one of Southeast Asia’s fastest growing economies. But that has not always been the case. When it unified in 1975, it struggled to find its feet. But when elements of market forces and enterprise were introduced and the stock exchange was opened, the country began to find its feet. Since then, foreign investment has grown. The United States is now one of Vietnam’s main trading partners.
More recently, the popularity of the Internet has brought about many changes. Vietnam’s Internet penetration is one of the highest in Southeast Asia at 44% of the country’s 90 million population. Much of the growth is attributed to smartphones, which are used by more than a third of the population. With very affordable mobile data rates at just $3 a gigabyte, Vietnam has now joined the Internet bandwagon. The impact is huge. Active social media accounts rose 41% this year. Vietnam’s active Facebook users are now at 30 million, an increase of 8.5 million since 2012. It is the most popular site being used by 21% of the population according to a survey conducted by We Are Social. Google+ has 13% and Twitter 8%.
There had been initial attempts to limit Internet freedom by the government. A few years ago, Vietnam’s government launched its own social media site to compete with Facebook. Dubbed Go.vn, it required users to use their real names and register with their government-issued numbers. Not many “friended” the government. Vietnam also used to block Facebook but Prime Minister Nguyen Tan Dung has decided to hit the “like” button saying that it can help small businesses to find new customers. Since then, several cabinet members have created their own pages and state-run broadcasters have begun uploading videos on Youtube. Despite a growing list of regulations, the government’s more open attitude towards the Internet has been quite effective. Online sales by business to consumers in Vietnam totaled an estimated $2.2 billion in 2013. They are estimated to reach $4 billion in 2015.
E-commerce and online trade have especially benefitted from the government’s efforts to promote Internet usage. Shopping websites such as Lazada and Sendo are mushrooming. Thegioididong, a leading IT retailer posted sales of $47.6 million in the first half of 2014. That was a growth of 300 percent. A recent survey by the Ministry of Industry and Trade’s E-commerce and Information Technology Department found that 58 percent of the Internet population shop online and spend an average of $145.
With the Internet boom and a growing middle class, there are a lot of business opportunities especially for foreign companies. Big global players such as Alibaba and Amazon have begun to build their presence in the country. Internet companies that want to expand to Asia should definitely not overlook Vietnam.
Proverbs can be an important indicator of cultural values as they often reflect the underlying attitudes and beliefs translated into the culture’s members, such as attitudes towards business ventures and business relationships. Making sincere attempts to understand and appreciate our own as well as other cultures’ proverbs can help us improve in our cultural interaction. Consider the following:
The bigger the hat, the smaller the property. (Australian)
Turn your face to the sun and the shadows fall behind you. (New Zealand – Maori)
Venture all; see what fate brings. (Vietnamese)
Where there are no tigers, a wildcat is very self-important. (Korean)
Call on God, but row away from the rocks. (Indian)
Don’t worry yourself about the fever before it arrives. (Thai)
Loyalty is more valuable than diamonds. (Filipino)
A crisis is an opportunity riding the dangerous wind. (Chinese)
If you enter a goat stable, bleat. if you enter a water buffalo stable, bellow. (Indonesian)
After victory, tighten your helmet cord. (Japanese)
Do you know more proverbs that reflect cultural values in business? Share them with us in the comment section below.
The 14th Trans-Pacific Partnership has taken place in Leesburg, Virginia, on September 6th – 15th. Leaders of Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam have gathered there to deepen comprehensive market access, regional agreement, cross-cutting trade issues, and new trade issues.
Trans-Pacific Partnership (TTP) has been engaged in high-standard economic integration process with comprehensive duty-free access to members’ markets and new trade and investment rules. Currently with nine team members, the Partnership has drawn strong attention and interests from other countries in Asia and Pacific region, in particular, Mexico and Canada. The Partnership Negotiation has also actively attempted to address new issues in the trade arena, such as information technology, green growth and new technologies. TTP derived from Trans-Pacific Strategic Economic Partnership Agreement in 2007 with four members originally.
U.S. Trade Representative Ron Kirk visited Vietnam on September 2, after visiting Cambodia 1at the first U.S.-ASEAN Business Summit on August 3. His visits were to deepen and strengthen trade and investment between the United States and Southeast Asian nations.
Ambassador Kirk and Cambodian Minister of Commerce Cham Prasidh announced that the U.S. and Cambodia have started to explore a potential bilateral investment treaty (BIT). During Kirk’s visit in Vietnam, he also seeks to strengthen bilateral ties, advance Trans-Pacific Partnership (TPP) and regional economic integration. The visits set the stage for the fourteenth round of Trans-Pacific Partnership negotiations, which will take place in Leesburg, Virginia, September 6 – 15.