Strategy to help Vietnamese startups reach the global market

No Vietnamese start-up has truly become a global enterprise. So what are the obstacles and strategies that help businesses conquer foreign markets effectively?

Exploring a new land is always a challenge! Many Vietnamese startups have ambitions to expand into the world market. However, no Vietnamese enterprise has truly become a global enterprise. So what are the obstacles and what strategies help enterprises conquer foreign markets effectively? To answer this question, the author had a conversation with Do Bui - CEO of Thinkzone - a famous domestic venture fund in Vietnam, with Thu Nguyen - Thinkzone's advisor in the European market, with many years of experience in the banking sector in Switzerland, and Hiep Doan - founder of Aepsy - a platform that helps customers easily find online psychologists in Switzerland.

Know who you are selling to

Each market has its own cultural characteristics, consumer behavior and business environment from capital mobilization to legal environment. The first step for Vietnamese enterprises when entering a new market is to clearly understand the characteristics of each market. For example, when it comes to American consumers, this is a market with a large consumption trend, prioritizing convenience and products that satisfy immediate user needs. Founders in the US accept high risks, prioritize expanding market share over achieving profits, with the view that "the market leader will have it all". American venture capital funds are also willing to invest large amounts of capital in potential startups. However, in recent years, American investors have become more selective due to scarce capital, Do Bui said. Therefore, startups with competitive advantages and sustainable business models will have more advantages in raising capital. Meanwhile, the European market is completely different. Thu Nguyen and Hiep Doan found that European customers are more cautious when choosing products, focusing on quality and paying attention to environmental sustainability. Customer acquisition costs are higher, but consumers are more loyal to products. European founders and investors focus on achieving profits rather than rapid expansion. The diversity of venture capital funds and exit options in Europe is also less than in the US. These examples highlight the importance of Vietnamese companies knowing who their customers are in order to make specific adjustments to their products and have appropriate fundraising methods.

How to understand new markets?

It is difficult for newcomers to know all the rules. An effective way is to find trusted local partners and connect with local networks to quickly understand the specifics of the market. These partners can be through industry groups or organizations in each country. Access to venture funds in the target market can also help Vietnamese founders leverage their resources. Partnering with Vietnamese people abroad is also a good option - these people may have networks, understand local rules and help businesses overcome language barriers.

(Illustration: Getty).

However, even with a good partner, you still need to experience the local environment firsthand to truly understand it. Going step by step instead of investing large amounts right from the start helps businesses avoid costly mistakes. In addition, managing a workforce abroad is also a challenge. That is why many successful startups in Vietnam have encountered difficulties abroad, and vice versa - successful startups abroad have failed to build a market in Vietnam, Do Bui emphasized.

Building a global company from the ground up

Another strategy that some Vietnamese startups use is to build a global company from the beginning. That is, the business will focus on serving global customers from the start, even though the product development and construction team is from Vietnam. This has become easier with the development of technology and the internet today. By adopting a global mindset from the beginning, these startups can create products that are scalable, adaptable, and appeal to a wider customer base. This strategy not only promotes innovation but also saves time for businesses to transition from the domestic market to the foreign market. However, to be successful, these startups need founders with international experience, a clear vision, and the resources to manage Vietnamese resources while handling customer service and sales abroad. In addition, understanding international laws and regulations on cross-border transactions is essential. According to Thu Nguyen, these founders often have experience running previous businesses and understand how to tailor their products and services to serve diverse customer needs.

Identify where your competitive advantage lies

To succeed in the international market, Vietnamese businesses need to identify where their competitive advantage lies. For example, for a founder like Hiep Doan, initial product testing is extremely important. With a large and young population and looser laws on information sharing than in Europe, Vietnam is an ideal place to test new ideas. This allows founders to quickly adjust their products before launching globally. Hiep Doan pointed to the story of TikTok. This business initially tested and improved the platform with Chinese users before becoming a global phenomenon. It is important for businesses to distinguish between features that are suitable for the majority and features specific to specific markets. Another competitive advantage is that Vietnam has a cheap labor force. But cheap is not enough. A foreign founder Thu Nguyen recently met affirmed that Vietnamese human resources have both factors: cheap and quality. Over the years, the skills of Vietnamese personnel in the technology industry have been improved, with a significant number participating in the software outsourcing market for large Japanese companies. The younger generation of Vietnamese is also more fluent in English. Many high-quality Vietnamese personnel abroad have chosen to return home. They have contributed to bringing new vitality to the Vietnamese business environment, stimulating innovation and bringing a global perspective to the domestic market. The Union believes that the return of many Vietnamese personnel from abroad to Vietnam in recent years is reminiscent of the story of China a decade ago. Another factor is that Vietnam is a good choice, as in recent years the technology workforce of China and India has become expensive, along with US-China trade tensions creating a trend of money flowing out of China. Thanks to that, Vietnamese startups can maintain price competitiveness with other countries in the region while still maintaining good profit margins. This is an attractive point for Vietnamese startups when calling for capital from foreign venture funds, the Association emphasized.

Find the best solution

Regardless of the strategy applied, businesses need to have a testing process to know which option is the most optimal. An approach that may work for one business may not work for another. They depend on the experience, resources and competitive advantages of each business. And the most important task of a business in the process of exploring a new market is to find a balance between selling what the market needs and selling what the business has. Source: https://dantri.com.vn/kinh-doanh/chien-luoc-giup-start-up-viet-vuon-ra-thi-truong-toan-cau-20240627131049518.htm