Expanding into Vietnam has tremendous potential, but good research is not enough to successfully enter a new marketplace. Companies must understand how markets operate and identify favorable business partners before approaching distributors, suppliers, investors, or going into business with locals. Business delegations, coupled with market entry programs, are designed to fulfill this need.
These programs, regardless of whether they are organized by government agencies, business chambers, or private advisors, are successful in helping companies assess business opportunities via matching services, market briefings, factory visits, and providing the companies with the opportunity to interact with local stakeholders. This guide outlines the workings of different market entry programs, what companies can expect from the programs, and how they can assist companies in making informed decisions when entering Vietnam.
Importance of Business Delegations
According to business reports, the greatest challenge of expanding into Vietnam is not the identification of the opportunity, but the recognition of which opportunities should be pursued. Although online research, such as market reports and industry statistics, can provide some context, they very rarely provide answers to the practical questions which would contribute to the successful implementation of a market entry strategy.
Which distributors are really working in your market? Which manufacturers can produce to your quality standards? How do local buyers decide what to buy? Without interaction with the market, it becomes very difficult to answer these questions.
Market entry programs and business delegations help answer these questions by combining market intelligence and in-market business programs. Companies, therefore, gain the ability to interact with potential partners and local business ecosystems, instead of relying on research, prior to making a substantial investment.
The Business Challenge
Why do foreign companies find it challenging to enter new markets? One reason is their over-reliance on secondary research. Publicly available documents may help identify trends, estimate the size of the market, or provide economic indicators, but they are unlikely to help understand the actual workings of business on the ground.
For instance, a company may think a distributor has a strong market presence and may therefore be a good choice. What they do not know is that the distributor may have little to no experience working with foreign companies. Similarly, a company may look at a manufacturer’s production facility and find it impressive. What the company does not know is that the manufacturer may not have the production certifications, or the quality management systems, needed by foreign customers. Such differences can only be understood after meetings and site visits.
From a business delegation, companies can validate their assumptions before investing large amounts of time and money. Ethically, planning individual meetings with companies may take months, but with a business delegation, companies can meet a carefully selected group of potential business partners, visit production facilities, talk to industry specialists, and get insight about local practices and customs.
Using a business delegation may also improve some internal processes. Information obtained through direct discussions may be more reassuring than the research a company may do on the market themselves, and may also help the company to avoid the assumptions trap.
Vietnam has become a favored destination for trade, investment, and supply chain diversification, and this is reflected in the increasing number of international business delegations visiting Vietnam.
By 2026, government institutions, business groups, and international chambers of commerce will continue coupling Vietnamese market entry programs with overseas businesses. These programs consist of business briefings complemented with factory and networking visits, and business matches to give overseas businesses an insight into the Vietnamese market.
AmCham Vietnam, EuroCham Vietnam, and the Vietnam Chamber of Commerce and Industry (VCCI) conduct regular trade missions and business networking services for various industry sectors. South Korea’s KOTRA, Japan’s JETRO, Australia’s Austrade, and Enterprise Singapore also sponsor market visits and sector specific business missions to assist their client companies in finding opportunities in Vietnam.
The ongoing commitment to business missions from these organizations indicates that business missions have evolved from being solely networking activities and have become an integrated component of an international market entry initiative. This helps businesses build trust and validate a market’s commercial opportunities, thus significantly reducing the time gap between the initial market research and a definitive business decision.
For businesses with an interest in entering the Vietnamese market, participating in a business mission reduces both the time and the risk associated with the foreign investment.
Market Entry Programs in Vietnam
Business missions have different objectives. Some missions are based on government initiatives to introduce companies to Vietnam, while some are based on business matching and relationship-building initiatives. The right mission should be selected based on the level of market investment intention, business expansion stage, and the market entry goals.
An official trade mission can help provide initial market orientation for first time visitors to a foreign country. Companies that develop a clearer strategy for their international enterprise opportunities have the option to take advantage of more customized programs that provide industry-specific trade mission activities and an opportunity to schedule business meetings.
Government and Chamber Led Trade Missions
Government sponsored trade missions to Vietnam are often the first introduction to the country for many companies. These trade missions are sponsored by the South Korean, Japanese, Singaporean and Australian governments, among others.
A government sponsored trade mission to Vietnam often includes a briefing on the target market, meetings with specific government ministries, visits to factories and industrial parks, and a business matching meeting. Many trad e missions provide presentations on specific market sectors given by local experts, and as such offer participants a great opportunity to gain insight into the business culture and regulations of Vietnam.
The trade missions provide participants with the opportunity to gain a benefit from the credibility of official government sponsored programs. Many of the trade mission sponsored activities facilitate introductions to key major government and local business sponsors and provide market information for businesses that are considering foreign investment opportunities in Vietnam.
Most missions sponsored by government agencies, due to the broad scope and variety of participants, lack specific focus. Many business matching meetings include introductions to several potential business partners, but often lack the depth of partner qualification that other market entry programs provide.
For early-stage market explorers, government-led delegations are strong preliminary tools to test the Vietnamese market and understand the country outside of just doing market research. Delegations also help build important connections in-country.
Chamber of Commerce Programs and Business Networking
Chamber of Commerce organizations, like AmCham and EuroCham, help businesses enter the Vietnamese market through a different method. These organizations help businesses engage with local professionals and businesses through various networking opportunities.
Chamber activities include investment briefings and networking events, as well as matching services and factory tours. These activities tend to group companies with similar interests, which allows more meaningful discussions to be held regarding potential partnerships and market opportunities.
For foreign businesses, especially those looking to enter Vietnam, these programs are essential for networking and finding local partners. These programs also keep participants informed on business regulations and industry changes, and help develop relationships with the Vietnamese business community.
Due to the continuous, rather than one-time, nature of these programs, they help facilitate the building of the Vietnamese market for international companies.
Private Market Entry Programs
Private market entry programs can also be a good alternative to trade missions for companies that have specific goals, as these tend to have more focus. These programs are organized by market entry consultancies and business advisory firms, and can be tailored to the goals of specific companies that participate.
Instead of general networking, a company may have organized meetings with prequalified vendors, distributors, manufacturers, customers, investors, or business partners. The company determines its goals for the site visits and selects the relevant industry for each visit. On the site visits, company representatives evaluate the site’s operational capabilities, assess potential supply chain partners, and examine the competition.
The program typically runs 3 to 5 days and involves substantial preparatory work. Much of the preparatory work involves arranging meetings with potential partners, conducting market analyses, and developing detailed itineraries for the trip. As a result, the company’s representatives spend their time in Vietnam conducting substantive work rather than networking.
Custom programs have higher per participant costs than public trade missions, but the time and money cost savings associated with the absence of independent market research and partner assessment are significant. For many prize participants, the custom program is more useful for gleaning substantive information as the participants gear up for opening up operations, engaging with distributors, and evaluating potential acquisitions.
What to Expect from a Market Entry Program
The selection of a type of delegation or market entry program is the first step in the planning a visit. The next step is to understand what is to be expected from the visit. While there is some uniqueness to each of the market entry programs, most of the successful market entry programs have similar features, namely opportunities for creating a network, verifying the presence of a market opportunity, and providing the tools and information necessary for making critical business decisions.
There is a conscious effort to avoid the typical trade mission approach of filling the schedule with meetings. Rather, the emphasis is on providing the market entry planning and strategy framework.
Market Briefings and Industry Insights
Most programs begin with market briefings, giving participants a look at the business situations, industrial changes and legal frameworks present in Vietnam. Based on the industry, briefings may be led by government ministries, business and legal advisory associations or industry specialists.
For companies entering Vietnam for the first time, these briefings provide the opportunity to interpret the country’s macroeconomic indicators. Participants learn about the structure of different industries, the investment climate, competitors and the rules of the game. They do all this before meeting potential business partners.
This also helps companies to set their goals and develop the right questions to meetings.
Business Matching and Factory Visits
The business matching component of a market entry program helps participants achieve the program goal by matching them to appropriately selected distributors, manufacturers, suppliers, customers or service providers, unlike other programs where participants set their own meetings.
The goal of this component is to discuss the alignment of participants’ business interests to the prospect of establishing a partnership.
For sourcing and manufacturing companies, factory visits become an essential component of such a market entry program. It helps company decision makers evaluate manufacturing capability and business interests of a factory and its validation offerings, something that is very difficult to evaluate and research beforehand.
This component of a program focuses on Quality Control and offers companies the added benefit of validating why a potential partner, unlike other companies, is well equipped to support their business interests.
Strategy Sessions and Next-Step planning
The value of a well structured market entry program extends beyond having a collection of business cards.
Strategy sessions are part of many private programs. Participants analyze the data collected during the trip and determine the appropriate next steps. These next steps could include selecting a distributor, creating a manufacturing partner shortlist, performing further due diligence, or evaluating other investment options.
Converting observations from the market into an actionable plan helps a company to leave Vietnam with a better understanding of the opportunities that exist, as well as the steps that can be taken to advance.
From Delegation to Market Entry
The completion of a successful business delegation is not the end goal; it marks the beginning of a market entry strategy. The knowledge gained from the meetings and site visits is only valuable if it is reflected in the decisions the company makes after it has returned to its home country. Businesses that create a direct translation of market intelligence into effective action are the most successful at entering Vietnam, unlike those that rely on presumptions or procrastinate in their decision-making.
Transforming Market Intelligence into a Market Entry Strategy
One of the larger errors that foreign companies commit is selecting a market entry structure before they determine how the market actually functions. A company may choose to create a wholly foreign-owned company, yet later find that during the delegation, the approach of going into the market with a local distributor or a local strategic partner was a better and more effective route.
The same logic applies to the selection of suppliers, the targeting of customers, and the planning of investments. Local business discussions often provide insights that are not obvious or available in secondary research, including the nature and impact of competition, the regulatory landscape, and operating in a particular sector.
Insights become part of the decision-making process and aid in determining the appropriateness of a market entry strategy toward the actual commercial situation and away from the theoretical. This will allow companies to avoid the expensive restructuring that is required after the company enters the market and offers a better basis for potential long-term growth.
Why Successful Market Entry Is Built Over Time
To most foreign companies, entering Vietnam is an iterative process, as opposed to simply a one-time event. The first overseas delegation to Vietnam often helps to orient the company to the market and recognize the first available opportunities. Subsequent trips allow the company to evaluate the potential partners, negotiate the terms, and evaluate the potential of the partners to fulfill the operational requirement.
This step-wise approach to the entry process improves the relationships and insulates the company against poor investment. The approach prevents the company from a premature appointment of a distributor or company and eliminates the need for company formation trips.
The first trip, whether a government-sponsored trade trip, or a trip organized by a chamber of commerce or a market entry service, is the most valuable when the company retains the connection with the local partners and continuously improves its market entry plan. This approach improves the potential for successful and sustainable business operations in Vietnam.
From Market Entry Programs to Long-Term Business Success
A market entry trip is the first step in what is expected to be a long journey. The trip is valuable if the company is able to successfully apply the relationships and insights gained from the trip to facilitate the company’s long-term growth.
Operation phasing for market entry methods is effective for new businesses in Vietnam. Process phasing allows a business to minimize the risk of failure, manage costs, and build a functioning and stable business.
Market Intelligence and Related Business Decisions
A market intelligence report is created to support a major business decision. Based on the information collected, the business can decide to appoint a local distributor, open a representative office, set up a wholly owned foreign subsidiary, find local partners to be engaged in manufacturing, or make a company-directed investment, based on the data collected.
In some cases, the data supports the company’s assumptions. In other cases, the collected data reveals an unmet market or a new competitive market. The company then modifies its plans to incorporate a new financial goal.
The greatest benefit of these programs is the early validation of business decisions.
Creating a Business Relationship Beyond the Initial Visit
A single visit usually means a business has not entered a new market. In Vietnam, a new business relationship is created and developed over time through repeated visits. Regular contact is made in order to engage partners and customers. The relationship is developed through an ongoing communication.
Most companies have an initial exploratory delegation visit. This is often followed by visits to negotiate contracts, perform technical evaluations, manage pilot studies, or develop an investment plan. It is a staged approach visit plan in order gain the confidence of the Vietnamese partners.
The greatest positive results of a market entry delegation visit is achieved when it is the first phase of a market entry strategy, and not an isolated or stand alone visit.
For foreign enterprises entering the Vietnamese market, a carefully considered delegation is paramount. Collaborated with local talent and sustained involvement, delegation aids in fuelling expedient market penetration, bolstering business alliances, and developing a robust basis for the sustained success of the enterprise.
Conclusion
Business delegations paired with market entry initiatives form a foundation for the reduction of risk and uncertainty when making vital business decisions. Engagement, combined with market intelligence, offers businesses the opportunity to assess local business norms and customs, evaluate potential partners, and refine their market entry tactics and plans prior to the expenditure of substantial financial resources.
As Vietnam remains an attractive locus of investment opportunity for the international business community, enterprises with a pragmatic, organized method to market penetration and entry, will gain a competitive advantage to form strong partnerships and will be able to develop their business with the security of sustained growth and success. Whether a business is contemplating initial market entry or further market expansion, appropriately designed market entry initiatives assist the enterprise in securing the foundation for success in Vietnam.