Ann Huynh, president of S3i Inc, returned to Vietnam recently to attend Industry 4.0 Summit 2023 organized by the Party Central Economics Committee with the participation of Prime Minister Pham Minh Chinh. VietNamNet interviewed her on this occasion. Here is the second part of the interview.

Many American enterprises have invested in Vietnam and have succeeded with their business. Meanwhile, the number of Vietnamese successful enterprises remains modest. What are the reasons?

The US has a federal government. In addition to federal law, the 50 US states also have their own regulations. The strict, complicated legal system could be one of the reasons Vietnamese businesses are hesitant to do business in the US.

The second reason is that in the US, everything is more expensive than in Vietnam. The minimum hourly wage in the US is higher, and the cost of living is higher.

Lego has invested $1 billion in a factory in Binh Duong and employed 4,000 workers. However, with $1 billion, it would be able to hire only 1,200 workers if it set up a factory in Virginia in the US.

The US is a country of immigrants, a melting pot, so the habits of American consumers are diverse, depending on their origin.

For example, Americans with Asian origin have habits, tastes and hobbies different from Americans with European or Latin American origin. If enterprises want to sell products in the US, they must spend time learning about the market carefully and find suitable target customers.

The US is still an attractive market that any enterprise from any country wants to enter. That is why the US has always led in attracting foreign direct investment (FDI).

It is good that some Vietnamese enterprises have overcome barriers and set up factories in the US, such as VinFast, FPT, Vietcombank, An Phat Plastics and other enterprises. More recently, Tin Thanh Group and King Coffee set up a factory for recycling tires in South Carolina.

How can Vietnamese and American enterprises be connected and have a common voice?

Most Vietnamese enterprises are small and medium sized. Therefore, we seek American enterprises with similar size and want to connect with them.

We are carrying out a project on connecting small and medium technology firms in Vietnam with American enterprises. But we won’t link them with technology giants such as Intel or Microsoft, but will choose ones with the right size to match them.

At the 4.0 industry exhibition in Hanoi, at S3i’s stall, you could see information about Vietnam’s IT firms that want to expand their business to the US. We are trying to act as the matchmaker for enterprises.

What is the biggest difference between Vietnamese and American enterprises in their way of working?

American enterprises work via email, while Vietnamese work via Zalo and Messenger. The communication method in business is one difference between the enterprises of the two countries.

While American enterprises are pragmatic and appreciate practicality and efficiency, some Vietnamese enterprises like to be more dramatic. When we organized a cooperation agreement ceremony between a Vietnamese enterprise and an organization in Massachusetts, the event was organized at a normal restaurant, while the Vietnamese enterprise expected a solemn and imposing ceremony. I thought the Vietnamese enterprise might feel a bit disappointed that day.

Vietnamese enterprises don’t have the habit of drawing up business plans and hiring consultants to prepare for business and investment, while American enterprises always do these things. Some Vietnamese enterprises don’t respect contracts they sign with partners, and some are afraid of long contracts.

Yesterday I arranged a meeting between a US partner with a Vietnamese enterprise to negotiate a contract on distributing farm produce. The US side showed an 11-page draft contract with many articles, but the Vietnamese enterprise did not want to read it. They only wanted a contract with three pages with three major points.

The US partners always require an article on information security, while Vietnamese enterprises don’t like this. They think this shows that the two sides don’t trust each other.

In some cases, after the two sides sign contracts, the Vietnamese partner changes the leadership and the new leaders asks to change the content of the previous contracts signed. This shows that Vietnamese enterprises need to respect international standards and respect the commitments.

To be continued...

Tuan Nguyen