What it's like to... Set up shop in Vietnam
Eleven years ago recruitment specialists Harvey Nash decided to start a new business in Vietnam. Back then, all Paul Smith knew about the country was he liked the food and that it operated a communist regime
Source: Dan J Austin
HARVEY NASH FACTS AND FIGURES
- London-based company with 500 employees in the UK, 38 global offices and revenues of £422m
- Established in 1988, Harvey Nash first entered the Vietnamese market in 2000 and now has offices in Hanoi and Ho Chi Minh City
- 56 per cent of the Harvey Nash team in Vietnam is female, with many in senior management or technical roles
It was over a bowl of noodles that Paul Smith decided to explore Vietnam.
A client at the time had suggested Harvey Nash base its new software business arm in India, and it was while discussing the prospect in a Vietnamese restaurant that the waiter overheard and suggested Smith meet his brother, a software engineer in Vietnam.
That fortuitous encounter changed Harvey Nash’s direction completely.
“I’m a qualified impulsive,” explains Nash. “We didn’t make a decision on the spot - instead the comment sparked an interest. We learnt more about Vietnam and what the country was like, and what his brother and the business did”.
Smith and the team were already unsure about setting up in India. Smith wanted the firm’s new software development arm to be “different”.
Says Smith: “We wanted to supply Vietnamese developers. That’s our USP; highly intelligent Vietnamese IT grads.”
Before long Smith took the waiter, Mr Huy, up on his offer and went to Hanoi to meet his brother, Dr Binh where he soon become acquainted with his software business. They hit it off immediately. While there Smith visited the local Hanoi University. “We realised there were some pretty hot maths graduates available who didn’t have an industry to work in.”
Not part of the World Trade Organisation and a communist regime, Vietnam amazed Smith with its entrepreneurial spirit. “You’d hardly notice it was a communist country. The people are very entrepreneurial and capitalist. They’ve recognised that they must be in order to embrace the global market.”
Smith sat down with Dr Binh and they agreed a partnership deal. At his company, FTT, Dr Binh employed 25 people. Together, the men agreed a partnership deal that would lead to the creation of a whole new business supplying software, development and maintenance services an international market, FSoft Vietnam was born.
SMITH’S TOP TIPS ON DOING BUSINESS IN VIETNAM
- Be persistent – entering into the Vietnamese market is not a short-term investment
- Building relationships is crucial – focus on trust, loyalty and commitment
- Do your homework and spend as much time as you can there
- 83 per cent of all graduates have a science degree, so Vietnam is a great market for technology or science businesses
- English is widely spoken – so fewer language barriers to overcome
- Work with UK Trade & Investment. Schemes like the OMIS programme are invaluable to SMEs
What about Asia’s culture of bribery and bureaucracy? Smith admits that at times the bureaucracy has been a struggle. But he’s quick to point out that it’s better now than it was 10 years ago.
“You quickly learn the process: that trying to do something first and getting it approved after doesn’t work.”
What about protecting the company’s IP? According to Smith, Vietnam has good IP laws and is prepared to enforce them, so protecting their IP wasn’t an issue. Smith has also been highly impressed by the country’s employment laws.
“You must be very careful to ensure you’re meeting Vietnamese requirements – their rigid employment laws very close to our won. Minimum wage, notice periods, maternity period. Don’t go into Vietnam thinking you can dismiss somebody tomorrow. You can’t. And that fits very well with the Harvey Nash philosophy.”
In 2006 Vietnam joined the World Trade Organisation. As a direct result Harvey Nash was able to acquire all of the company. Harvey Nash Outsourcing is now the second largest company in Vietnam with offices in Ho Chi Minh City as well as Hanoi, where they still work with FTT.