Working With Vietnamese Suppliers: Common Challenges

I have lived in Vietnam for close to five years and have learned so much about language, culture, people, and the business landscape. During this time, many companies have moved their manufacturing to Vietnam - which is a great choice….and a big choice! It is a big choice because manufacturing in a new country can bring about new questions, risks, challenges, and unmet expectations. 

Below are three challenges a foreign company needs to consider in order to minimize risk:

(1) A “yes” and a head nod does not always mean you are fully understood

When you connect with local factories and third-parties, you are almost always working with someone who is using English as their second language. Many people have a high level of English, but it is important to remember that even a small misunderstanding can cost your business thousands of dollars and lost time. 

The factory you are working with may give you a head nod and a “yes” as you explain your product specifications, but that doesn’t always mean you are being fully understood. 

(2) Problems are often not raised early

The factory may run into issues such as running out of the necessary material for your product or running low on staff due to a local holiday. Your company is half way across the world, so you have no idea that the factory is spending weeks trying to overcome these issues. 

In many contexts around the world, the communication standards are different. This means you may not get a timely response about the product or timeline issues. This can end up costing your business lost time, quality, and revenue.

(3) Relationships matter more than contracts

After four years of living in Vietnam I have learned this lesson over and over again: Relationships are one of the most important factors in all aspects of society. If you are desiring your products to arrive on time and with the correct quality, a strong relationship with the factory is going to be crucial! You may feel that you have a strong relationship with the factory, but the reality is that it is a connection half way across the world that is based on video calls.

Northern Path is a consulting firm led by an American business professional based in Vietnam. We directly manage and execute your Vietnam initiatives, ensuring clear communication and reliable execution—without outsourcing your work to third-party agencies.

We would love to be your on-the-ground presence in Vietnam to make sure your needs are fully understood, learn about problems early on in the process, and help create and sustain a crucial relationship with the factory!