Made it in Vietnam
In recent years, Vietnam
has been hailed as the world's new "factory floor", shifting the
international spotlight away from China. Many multinationals as well as
smaller firms have relocated to Vietnam to take advantage of benefits
such as tax incentives and preferential interest rates, and even Chinese
companies are seeking to explore opportunities there. However, it is
limiting to only consider Vietnam's potential within the scope of
manufacturing.
Vietnam's economic growth in the past decade has been among the highest in the world, and the country's GDP is one of the highest in East Asia, second only to China.
Despite similarities, like having a large manufacturing capability and a business style that emphasizes relationship building, Vietnam is not a smaller version of China, as many companies have already found out. Comparative advantages include its motivated workforce, political stability and young population (60% of the population is under 30 years of age). All of these factors combined have made Vietnam one of the most promising places for foreign investment.
In particular there are unique opportunities in the following sectors:
- High tech manufacturing. Vietnam has emerged as the preferred electronics production base for global companies.
- Internet Technology. E-business and E-commerce are poised for serious growth as global experts indicate that 30 million Vietnamese will be online by 2010. E-business development has also been encouraged at the government level.
- Retailing international brands are increasingly appearing in Ho Chi Minh City and Hanoi as consumers are becoming increasingly wealthier and have the desire to spend money.
In addition to great possibilities there are still challenges to be faced by those who choose to do business in Vietnam. Obstacles include poor infrastructure, limited access to raw materials and understanding the factors that drive the decision making process in local Vietnamese partners, customers and suppliers.
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