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How to ensure effective intercultural communication for doing business in Vietnam

Doing business in Vietnam : develop strong intercultural communication

November 2023

Communication is the key to any project. Indeed, it enables the easy exchange of ideas, laying the foundation for strong relationships and smooth operations. Businesses have plenty of opportunities when they venture into Vietnam’s growing market. However, success mostly relies on effective cross-cultural communication.

In an interview hosted by Zach Herbors for Business Way TV, ALTIOS Vietnam’s Country Coordinator Thuy Minh Giang explores key tips and best practices for successful business interactions in Vietnam.

Overcome Communication Barriers

Communication is greatly influenced by cultural differences. Some words that have neutral meanings in one culture might mean something else in another.

For example, “ambition” or “being ambitious” is viewed differently in Vietnam and Europe. In Europe, ambition is usually positive; it is seen as a trait leading to success and personal fulfillment.

In Vietnam, however, there are two words for ambition, each ones carriying a different meaning. On the one hand, one is positive, like in Europe, while the other suggests competitiveness or even ruthlessness.

Here are some tips understand cultural differences in business:

1. Learn Vietnamese and build personal relationships from scratch

Getting to know people personally makes communication easier and shows a sincere interest in the local culture. Vietnamese partners are more likely to feel at ease and transparent when speaking to you in their mother tongue. Speaking in their native language helps build trust and stronger business relationships.

2. Show Adaptability and Cultural Sensitivity

Effective intercultural communication requires having an open mind and developing cross-cultural awareness, that is to say, being aware of cultural differences. It is important to embrace diversity and recognize that what may be customary in one culture may not hold the same significance in another. By respecting local customs and traditions, you will build credibility and trust.

3. Be clear in your statements

Misunderstandings can happen in any cross-cultural situation. However, in order to minimize it, you should always ask questions and seek clarification. By being proactive, you can prevent potential misinterpretations and develop a transparent and productive working relationship. Clear communication guarantees that everyone’s goals and expectations are in line.

4. Call on a mediator for smooth communication

Sometimes, despite best efforts, there may still be challenges. In this kind of situation, finding a trustworthy mediator can be very helpful. A mediator with expertise in both cultures can assist you in comprehension problems, and help you and your Vietnamese partner communicate effectively. By doing this, you will be sure that both understood messages correctly and that any possible disagreements or inconsistencies are resolved right away.

Three Impacts of Cultural Differences

1. Language barrier

The language barrier can be a real problem, due to the structure of the Vietnamese language. Unlike Latin languages, the Vietnamese language does not use tenses. This fundamental difference in grammar can make it hard to understand nuances.

Also, varying levels of English proficiency among Vietnamese people can also make communication harder. Thus, it requires patience.

2. Working hours

Some Vietnamese people work on weekends. Sometimes, they might send urgent requests or inquiries during this time. This is an aspect of the Vietnamese work culture that you have to take into account, in order to find mutually agreeable solutions when facing these time-sensitive issues.

3. Legal documents

Legal documents are often sent via platforms such as Whatsapp or Zello. While these methods offer convenience and speed, they may not be as secure as conventional methods. Extra precautions are needed to protect sensitive data.

Watch the full interview with Thuy Minh Giang for Business Way TV:

Want to learn more?

If you are interested in reading more articles about doing business in Vietnam, check out our article about how to choose a manufacturing site in Vietnam.

IT sector in Poland 2023: what opportunities for international companies?

poland it sector altios

August 2023

In 2023, the IT sector in Poland has been experiencing outstanding growth.

Also known as the “IT center of Europe”, the Polish market is home to the highest number of domestic IT companies in the continent. This can be confirmed by the enormous interest of international corporations in opening their branches and large centers of tech services in Poland.

In this article, ALTIOS’ experts share how foreign companies can seize great opportunities in the IT sector in Poland.

IT and software: the Polish market's driving force

The IT sector is responsible for generating 8-9% of the Polish GDP, while the share of software business is increasing.

The value of the market is around PLN 70-85 billion. Looking at the total revenue of companies (excluding micro entities), it can be estimated that the software and IT services sector alone accounts for approximately two-thirds of the entire market (about PLN 55 billion). This share is currently rising towards 70 %, which is typical for highly developed countries, where the demand for IT hardware is lower for the reason of high market saturation.

Following Clutch data, in Poland there are around 50,000 software companies. What an impressive number, considering that this economic sector is relatively new!

Different sized companies make up this market – from micro entities to branches of global corporation.

In 2022, Google has announced a huge investment coming in Warsaw. The company’s purchase of office buildings in the capital is a sign of team development, and engineering recruitment in Cracow.

Other big brands like Samsung and Intel have decided to locate their R&D centers in Poland.

Except for large players, Poland is home to many local, competitive software houses and game developers.

What’s interesting, there are two potential tech unicorns in Poland: Brainly and Booksy, which prove the entrepreneurial spirit of the country.

Investing in the IT sector in Poland: what are the advantages?

The main success factor for the industry is having highly skilled people. Poland appears at the top of all rankings that have the most talented programmers.

The COVID-19 pandemic has accelerated global digitalization process, which rebuild the plans for future – many so far traditional businesses were forced to start thinking about digital transformation or new digital channels.

In Poland, according to the 2021 DESI (Digital Economy and Society Index), Poland is still below the EU average in all categories. It is currently ranked as 24 out of 27 EU countries, while performing better in connectivity (21st position) and digital public services (22nd position).

IT sector poland altios

The low DESI ranking is due to the insufficient integration of technologies in companies. While companies understand the importance of digital transformation in their organizations, most of them do not plan to increase investments in this area, in the coming months. In the future, country market development will be driven by the digitization strategies of the public, business sectors, and the need to invest in labor-saving or productivity maximizing solutions.

What challenges when exploring the Polish IT industry?

Among the barriers to the industry’s development, following issues could be pointed:

  • rising labor costs and talent draining, still moderately advantageous structure of the economy (relatively high share of simple processes and less advanced industries);
  • low awareness of the benefits resulting from IT investments in the SME sector (what could be changed by pandemic situation);
  • companies’ capital shortages.

In 2021, the number of M&A transactions in Poland hit a record high of 329, and a big part of them was in IT/tech sector (around 30%).

In 2022, despite Ukraine War and economic situation, other acquisitions on the tech market could take place, like French group Hardis’s acquisition of Polish Cloudity. On the other hand, Polish tech companies were also active in foreign acquisitions – like Blik’s choice to acquire Viamo, or Vercom’s acquisition of American MailerLite.

There is also visible growing interest in acquisition of cybers security companies.

More opportunities

The IT sector in Poland offer countless opportunitied for international companies looking to invest or expand. In fact, Poland is the:

  • 1st country in CEE (13th globally) by smartphone penetration
  • Cheapest mobile data in CEE (USD 0.7 per 1GB)
  • 2nd fastest growing European market for Revolut
  • 90% of card payments in Poland are contactless

Our teams in Warsaw and Cracow can enlighten you further on this attractive sector, and support you through all the steps of your expansion. Book an appointment with one of our experts to discover our personalized offer.

Want to learn more?

If you’re looking for more insights on the Polish marker, read our most recent article on the subject: What to know about Poland in 2023

China’s MedTech Market

china medtech market

December 2022

The MedTech sector in China is quickly becoming the most attractive industry for investors.

With a 70% importing ratio, China is one of the world’s largest medical device manufacturing hubs, as well as a market dominated by foreign multinational companies. In this dynamic context, what will be the potential challenges, and keys to success for foreign players in the coming years?

Key Market Data

The Chinese MedTech market has grown at a consistently rapid rate in the past five years, and in 2019, the market reached RMB 7.82 trillion (US$1.1 trillion), an increase of 10 percent when compared to that from the previous year.

For companies that plan on investing in this promising sector, it is crucial to have an understanding of the Chinese MedTech industry’s statistics:

  • In 2020, China’s GDP saw a slower 2.3 percent growth, but its healthcare spending still rose from RMB 6584.14 billion (US$1,033.1 billion) in 2019, and to RMB 7230.64 billion (US$1,134.5 billion) the following year. However, it is still the 2nd fastest growing industry in the world.
  • China’s revenue in the Medical Technology market is projected to reach US$40.96bn in 2022.
  • The market’s largest segment is Medical Devices with a projected market volume of US$29.07bn in 2022.
  • By 2027, revenue is expected to show an annual growth rate (CAGR 2022-2027) of 8.12%, resulting in a market volume of US$60.51bn.
  • In global comparison, most revenue will be generated in the United States (US$200.20bn in 2022).

MedTech Market Trends

Medical Technology grows steadily due to China’s aging population: the elderly are predicted to reach 300 million by 2025 and 400 million by 2035. Due to a strong rebound of revenue structuring in 2022 and a steady rise in 2023, stable and consistent growth in the industry are anticipated as seen before Covid-19.

This ensures sustained investment in research and development, a proliferation of healthcare services, and the implementation of existing technology.

Moreover, the market presents considerable opportunities for growth. This is possible since the Chinese Government has more recently laid out multiple initiatives to support long-term growth and innovation in healthcare delivery. As for this sector, it will feature more heavily in the 14th Five-Year Plan (covering 2021-25) than it did in the 13th Five-Year Plan.

China’s Market Entry Strategy for Foreign Players

International foreign companies that wish to enter China, usually operate in three ways:

  1. Direct Investing by setting up a base in China via opening a WOFE, Subsidiary, or JV.
  2. Partnership with OEMs
  3. Importing to sell in the market.

However, things are evolving. Following recent global changes, since the pandemic and the tense political restructuring, most firms have realized which is the best way to take advantage of China’s profitable market.

Now companies are focusing on monetizing by selling to local markets rather than exporting. While developing with the end market, businesses are choosing to acquire bigger market shares by localizing the supply chain, rapidly responding to customer demand, and taking advantage of tax policies favorable to investment in R&D.

By localizing, the companies have enhanced their financial incentives, including, but not limited to, lower company tax of 15% and reduced VAT.

At the business model level, MedTech majors are stepping out of their comfort zones with cross-sector partnerships with peers, pharmaceutical companies, providers, and payers alike for disease and health solutions.

Some case studies to explore would be Radiometer’s partnership with AstraZeneca for kidney diseases, Illumina & Sanofi in rare disease treatments, and more.

Conclusion

With the right strategy and partnerships, China’s MedTech industry provides significant opportunities. Medtech companies should evolve and innovate to keep pace with the healthcare system highly driven by digital data-driven trends.

Want to learn more?

If you are still interested in reading about China, you can also read our latest article: Hong Kong Bouncing Back

What can ASEAN offer the international manufacturers?

ASEAN

Is ASEAN the new global Manufacturing Hub?

The markets of the Southeast Asian countries offer very interesting prospects. 60 % of the region’s population is expected to be middle class by 2030.
ASEAN is also preparing its members for the Fourth Industrial Revolution.

To get some insights on promising trends, and how to set up manufacturing in ASEAN.

Download our article dedicated to ASEAN:

Global Business Month

Global Business Month

It's time!
Speed up your international business

Insights | Interviews | Tips

28.09.21 - 21.10.2021

Online throughout the month

Event language: English

Organizers

Participating companies

Speaker

Bruno-Mascart
Boris-Lechevallier
Klaus Maier,
Betrand-Girard
Gael-Sabbagh
Alexandre-Kaplan
Bruno Mascart
Group Managing
Partner
Southeast Asia – Singapore
MV-Altios
Boris Lechevalier
Group Managing
Partner
Europe – London
MV-Altios
Klaus Maier
Group Managing
Partner
India – New Delhi
MV-Altios
Bertrand Girard
Managing Partner North America – New York
MV-Altios
Gael Sabbagh
Partners – Global
Growth Strategy
Europe – Paris
MV-Altios
Alexandre Kaplan
Manager –
Corporate Finance
Europe – Paris
MV-Altios
Arnoul d’ARSCHOT
Isabelle-Combe
Morgane-Pinault
Francois-Lamotte
Mirko-Mottino
Didier-Koch

Arnoul d’ARSCHOT
Project Manager
Southeast Asia – Singapore
MV-Altios

Isabelle Combe
Managing Director
North America – Montreal
MV-Altios
Morgane Pinault
Manager – Global
HR Solutions
Europe – Paris
MV-Altios
François Lamotte
Managing
Director
Europe – Paris
MV-Altios
Mirko Mottino
Managing Partner
Europe – Turin & Milan
MV-Altios
Didier Koch
Managing Partner
South America – São Paulo
MV-Altios
Margaux-Loustalan
Thomas-Breitinger
Hugues-Naudet
Buehrer-rund
Margaux Loustalan
Managing Director
South America – Mexico City
MV-Altios
Thomas Breitinger
Vice President – DACH
Europe – Cologne
MV-Altios
Hugues Naudet
Director –Strategy
Europe – Paris
MV-Altios
Reinhard Bührer
Head of Marketing & Sales
Hatebur Umformmaschinen AG

Target group

Anyone who sells international products or services worldwide.

With Kind Support