While China purchased the lion’s share of Canadian products shipped to Asia in 2016, Vietnam, the smaller S-shaped country to its south, was responsible for almost $528M worth of trade.
With an estimated 94 million people, Vietnam is the world’s 14th-most-populous country, and the ninth most populated in Asia. And with the middle class set to double in size by 2020, the country is bursting with potential for exporters exploring new markets.
The Canada-Vietnam trade relationship is good, recently celebrating 40 years of partnership in 2013.
Both the Government of Canada and Vietnam have endeavored in November 2017 to establish a comprehensive partnership to develop bilateral trade, which they shared in a joint statement.
Positive relations are bolstered by joint participation on a number of agreements including: the Trans-Pacific Partnership (TPP) – in progress, Asia-Pacific Economic Cooperation (APEC), World trade Organization (WTO), and the Association of Southeast Asian Nations (ASEAN) Regional Forum.
Vietnam is Canada’s largest trading partner among the ASEAN countries and, according to a joint statement, the two countries will examine the potential for a Canada-ASEAN free trade agreement, and promote implementation of the Trans-Pacific Partnership.
Set in the heart of East Asia, Vietnam’s geographical location is home to a number of large and exciting economies. 60% of its population is working age, representing a huge pool of customers, hungry to consume as the emerging economy aims to attract foreign direct investment.
Extensive reforms (“Doi Moi” or renovation) began in the mid-80s and led to substantial social and economic reforms. In recent years, Vietnam has made considerable efforts to increase its engagement on the world stage, and since 1990, Vietnam’s GDP per capita growth has been among the fastest in the world, averaging 6.4% a year in the 2000s.
The Vietnamese government is committed to creating an attractive environment for foreign investors, and is constantly improving its framework related to business and investment. According to the 2011-2020 Socio-Economic Development Strategy (SEDS), the government recognizes the need for structural reforms, environmental sustainability, social equity and economic stability.
Despite global economic uncertainties, Vietnam remains resilient, with GDP expanding by 6.2% in 2016.
Over the past several years, Vietnam has been gaining popularity as China’s alternative for the manufacturing industry, and Canadian companies have found opportunities in a variety of sectors including: Agriculture and agri-food, education, aerospace, oil & gas as well as information technologies (IT).
The November 2017 Canada-Vietnam joint statement mentions that both countries will “promote and strengthen cooperation in areas such as energy, clean and sustainable technologies, and marine and environmental research, including climate change adaptation and mitigation.”
EDC representatives have developed strategic relationships with major buyers in key sectors, as well as an extensive network of local contacts in the market providing regional support to Canadian companies in Vietnam.
EDC supported $220M of business in Vietnam in 2016, representing over 30% of all Canadian exports to the country that year.
Vietnam is a burgeoning market offering plenty of opportunities for Canadian exporters, however, navigating through the processes and administration can be complex.
Developing strong partnerships with local professionals will be invaluable in developing business connections, and understanding Vietnamese business culture.
Often, building these relationships takes time, and involves getting to know each other on more personal level. Food plays a central role here as eating and drinking together is an important part of Vietnamese culture.
How to do business in Vietnam: 8 etiquette tips
Years of struggle to gain their independence have left the Vietnamese people with a strong sense of national pride. Confucianism has also seasoned Vietnamese society, placing great importance on the relationships that people have with each other. Here are 8 etiquette tips for doing business in Vietnam:
- Shaking hands in Vietnam is done with both hands, with an added light bow for respect.
- Upon greeting your Vietnamese friend say hello, or “xin chao” (pronounced: seen chow). Vietnamese is a tonal language and you would impress your new associate with proper pronunciation.
- Use both hands when receiving and giving business cards, or whenever passing an object to another person.
- Be punctual.
- The Vietnamese style of dining is rice bowls and chopsticks. Some at-home practice may be required to master the technique.
- Food is placed on dishes in the center of the table and shared.
- An offer of tea at a meeting is a ceremonial form of hospitality and should never be refused.
- For business, dress is conservative.
For more resources on doing business in Vietnam, visit the office of the Canadian Trade Commissioner Service in Vietnam. Or if you’re new to the world of exporting, download EDC’s Introduction to Exporting: How to Sell to International Markets.