Sourcing in Vietnam Made Easy
Importers worldwide looking to manufacture their products in Asia want two things: high quality and low cost. While China is known for manufacturing virtually any type of product, increased production costs and trade disputes have caused companies to look elsewhere.
Over the years, Vietnam has developed into a potential resource for importers looking to manufacture the right product. However, it is not the best option for everyone. These are the key factors you must consider before taking your business to Vietnam.
First, not everything can be made in Vietnam. Its manufacturing industry may be on the rise, but it is still no match for its Asian counterpart China. Vietnam produces labor-intensive products and has won over major companies like Samsung and Nike in manufacturing. Here are some categories offered by many suppliers in Vietnam:
- Apparel and Textiles
- Children’s Goods
Your Supply Chain
You must consider the size of your supply chain before thinking of taking your business to Vietnam. The consensus is, the larger your supply chain, the more you will benefit from manufacturing there. Smaller companies looking to produce in Vietnam will have difficulty maneuvering around this and rely on contracted partners to fill out their supply chain.
Since Vietnamese manufacturers are less experienced than those in China, it can be difficult to find suitable suppliers. Also, rail networks and ports are not as established as China. Therefore, service options for shipping and transportation are limited. Vietnamese suppliers are also less willing to work with startups and small businesses.
Finding the right supplier
Most business done in Vietnam is through recommendations and referrals. However, if you want to research yourself, suppliers and their contact information can be easily found with a quick internet search. You can also enlist the help of the Vietnam Chamber of Commerce and Industry (VCCI) or a business advisory to find the best contact based on your procurement needs.
Communicating with your Supplier
So, you’ve decided to venture to Vietnam to source your products. It is important to understand Vietnamese culture before approaching your potential supplier. If you’ve done business with China in the past, you probably understand the major cultural differences between Asian and Western countries. When reaching out to suppliers, keep these main points in mind.
In places like China, where the manufacturing industry is huge, you don’t need a name or license to get a meeting with a supplier. Whether you’re new or experienced, they want to meet you and discuss a potential business relationship. In contrast, Vietnamese suppliers prioritize building mutual respect and comfort before sealing a business deal. You will need to establish trust before even thinking of placing orders.
Avoid putting your partner in a cornered positions and always suggest solutions or alternatives. Compromise is welcomed but be careful about being too pushy, which can come off as offensive to the Vietnamese.
The Vietnamese highly regard a hierarchical system. When addressing someone in Vietnam, always refer to their title followed by their last name. For example, “Director Trung” or “Manager Tran.” Greetings and exchanging of business cards should be done in order of rank, so start with the most senior person and then move down the line.
Giving face means to honor or to pay respect. The concept of “face” is very common in Asian countries, and you must appropriately give respect to your Vietnamese counterparts according to rank and seniority. If you are thinking of giving gifts, you should reserve more expensive gifts for your contacts of higher rank.
Depending on the type of product you’re looking to manufacture and the scope of your company, Vietnam could be a low-cost alternative for your supply chain needs. If you’re ready to take your supply-chain to Vietnam, be sure to follow these communication guidelines to build a strong business relationship with your supplier.
Dedola Global Logistics has over 40 years of experience helping importers in Vietnam. Contact us with any questions regarding freight forwarding or your supply chain.