General Consulting Services for Businesses in Vietnam
We will assist in consulting firms of all forms in expanding into Vietnam. From provisional information in the local area, finding vendors and import agencies in Vietnam, we would like to help you whole heartedly. We could also extend our services further to the establishment of a local branch, company matching and legal consultations. Nhat Anh’s network will help support the transition into Vietnam with full force.
Food Sector Sales Channel Development: Test Marketing Assisstance
If your aim is to bring satisfaction to the customers through your product, please feel free to contact us as we would love to help you fulfill that vision. As a Japanese, I am not a local of this country, but with my Vietnamese wife (who is also currently our director), together we have established our confectionary business here in Vietnam, since 1996 and we have carried on with the same passion that we started out with.
Working with us would bring you many advantages. Our methods may be intriguing at times and could bring about times of difficulty, however I have been working in Vietnam for 20 years and can foresee the circumstances which may arise in the future. There may be business concepts that are incompatible with Vietnamese ethics and we would be able to guide your through those times, whether it be critical and trivial. Hopefully this business guide would help paint a better picture and help you in making your decision to work with us.
- What kind of assistance could you receive from Nhat Anh?
In order for retailers to create a trading account, manufacturers must establish a local corporation which requires building professional relationships within the retailing residence. This often requires time and money. The success of a product in its original place of distribution will not translate to foreign areas of distribution. We must get a feel for the demographic that we would be working towards and then fully delve into it. Without this process, it becomes more challenging to get the goods to the market. At Nhat Anh we would have the resources and relationships needed to ease the process, undertaking the role as the distribution agency for your products.
When Nhat Anh first started, we exercised this method, partnering with existing Vietnamese capital manufacturers as an OEM production. Since then, we have evolved into our own trading company. We understand the struggle of finding compatible partner companies. Just as our Vietnamese manufacturing partners had helped us, we, in turn would like to help you compatriots with your migration into Vietnam.
The four main benefits that could come out of our partnership are as follows:
- Firstly, Nhat Anh already has instituted relationships and connections with large local retailers. We would become your medium and leveraging these relationships to you, helping you to effortlessly set up your new branch.
- Secondly we would maximize your profit during the launch of your business, amassing a favorable sales commission for you. Specifically for new entrants, sales commissions (total sales cooperation expenses, total rewards etc) requires 15% to 30% of the commodity price. By working through our company, this would be significantly lower to undertake the distribution agency. In short it would be cheaper with us than trading directly with other local retailers.
- Thirdly, we will offer you our Stock-Keeping-Unit (SKU) service.
- Lastly, thanks to Nhat Anh’s lasting pre-existing relationships with other retailers, this could result in profitable deals as well.
With these benefits mentioned above, it would never be too late to launch a local corporation with our support. We could even help with the launching process as well. If there comes a complication in the process and requires postponing, that may be arranged as and we will gladly wait until the opportunity arises comes again. Initial investments tend to be tricky, ad hoc correspondence will be permissible.
If you would like to work independently, but want tips and pointers, we also provide consulting services. Some companies may not offer full-time consulting, but we could provide eminent support with our vast experience of 20 years in the confectionary manufacturing industry. We do not specialize in consulting but we can provide you with guidance through business ethics of Vietnam.
- What are the common concerns for Japanese firms when expanding to Vietnam?
There are stark differences in business practices between Japan and Vietnam. Oftentimes, Japanese companies find this to be a major barrier in their agenda. Even we have come across such issues. One of the biggest challenge for us was the assurance of product distribution channels. No matter how great the product may turn out, if the consumers do not demand for them, it will be meaningless. So in order to get a better picture of what is sought out in commercial distribution, here is a few examples that we have found through our experience.
1. Cutbacks in the quantity of items.
Vietnamese major retailers are not often very enthusiastic in working with or making transactions with new manufacturers (including suppliers). This is because they have is no assurance in the success of the new products and they already have their own stable product. A new product may be risky and they are content with what they already have. To gain their incentive, you must find a novel product and this regularly require topicality in the sales line up. Additionally, attention to detail is also another quality that is sought after in suppliers. As the sales increases, product management may get cumbersome and there may be faulty oversights. It will be an important factor that will be closely examined by the retailers per new product in trading performance. In the example of our company, we have managed this and are trusted, given our sufficient experience and the multiple distribution of our product on the shelves, we have no cutbacks at all.
2. Cost of additional new products.
As a product becomes successful, you may think of additional products to the product line up. In doing business with Vietnamese retailers, the increase of product variation will increase commission. Per each item, you would have to pay 6million~20million VND (approx.. 300USD~1,000USD), according to the market price. It is a costly burden but is something that cannot be avoided.
3. Cash flow.
One of the unexpected things that arose for our company was that the initial payment of the commodity price was considered a deposit to be used to as a hold on the deal. This payment is received by the manufacturer (or supplier) after the third order is being made, once it is evident that the product is successful and proves to be stable enough. There will be a surplus in cash flow, when working with large retail companies. However there are also plenty of handling lots, there will be far more “deposits”. If the retailers are small or medium sized, there will be a depletion of product sales in funding.
For example in major mass retailers owning 20 stores, assuming the initial delivery fee as 1,000USD per store, would continue to entrust 20,000USD until the transaction ends and the contraction expires. By working with our company, since we have multiple store outlets and trading accounts with our partner retailers, it would alleviate the monetary burden in the cost of distribution.
These are the few factors that may improve product distribution. After all if there are no demands however great the product is, it would be pointless. So in this sense we could help direct you in a better path towards success. Aside from the technical issues being the barrier for distribution, such as those mentioned above, it is also important to deal with the professional interpersonal issues. Particularly the relationships you must build with the retailers. As Vietnam is a high context culture, much emphasis is placed on building trusts and establishing relationships. Without a mutual trust, you would not be able to development your company, and so, much time and attention will be needed to acquire this. Let us aid you in this process to share your product with Vietnam.
- Vietnam as a Realistic Potential Market
It is evident that the Japanese market is shrinking year by year. The population is expected to decrease as well which only foresees a poor outlook as a market. From the perspective of Japanese companies, it is unfortunate but they have to seek outside of Japan for a market. Asia would be a good starting point considering the location and the similar lifestyles and culture. In particular we believe that Vietnam may be the most promising for Japanese companies and these are the reasons why.
First of all Vietnam favours Japan a lot and are open to working with Japanese companies. Indeed, the Vietnamese market is nothing compared to the Chinese market, however the relationship between the Japan and China is very unstable as opposed to the relationship with Vietnam. Distance-wise Korea may be another target but there are also political differences that may bring instability along the way.
Vietnam also has a population of 90 million people which is the third largest in the ASEAN region. The people of Vietnam also share some cultural practices including religion as well, so the market dynamics would be similar.
Furthermore in recent years, Vietnam has become an ideal location for foreign partners to approach first. Plenty of Japanese companies look towards Vietnam upon wanting to invest overseas. Thus the facts would speak for itself in explaining how much of a major influence Vietnam can be for Japanese companies.
- Why carry out this service?
There are no hidden intentions or motives in carrying this out. My wife is Vietnamese and I have been doing business here for 20 years. I consider this country as my second home and I wanted to share the beauty of Vietnam with others and bring great foreign merchandises into this country. I have been doing the latter for the past 20 years, having established Nhat Anh and I would like to continue this even more.
Indeed, it is beneficial for Nhat Anh as well. As we help expand your network, and strengthen relationships, Nhat Anh in turn will gain relationships with our new clients.
All our knowledge have been gained through our efforts and hard work from the 20 years we have spent in Vietnam. We hope to learn more from our experiences and from you, anticipating that we become of service to you.
Upon reading this, (Not only Japanese but also foreign business institute) if there are any enquiries and concerns, do not hesitate to contact us. Your feedback is valuable to us. We are looking forward to hearing from you.
Let us enjoy the taste of success, here, in Vietnam
NhatAnh Trading Private Enterprise
Consultant: Mr. Yoshiro YASUDA