Vietnam beyond the growth story: What European companies need to understand before entering the market

Vietnam’s economic figures make a compelling case for international expansion. But for European companies, the difference between spotting an attractive market and building a viable business there often comes down to something less visible in the statistics: understanding how the market actually works.

With a population of more than 100 million, strong economic growth, expanding manufacturing capacity and deepening trade links with Europe, Vietnam has become increasingly difficult for internationally minded companies to overlook. In 2025, the country recorded GDP growth of 8.02%, GDP reached approximately USD 514 billion and total goods trade stood at USD 930 billion.

Yet the headline figures tell only part of the story.

Speaking at a Leap4Growth webinar, Csaba Bundik, Founder and CEO of CETA Consulting, explored what European companies need to understand before entering the Vietnamese market. Bundik has extensive experience in the region, including as a former Executive Director of the European Chamber of Commerce in Vietnam.

His central message was simple: Vietnam offers substantial growth potential, but it should not be approached as a smaller or simpler version of a European market.

A large market that is changing quickly

Vietnam’s population reached an estimated 102.3 million in 2025 and is still growing. At the same time, the country is ageing, creating longer-term shifts in demand in areas such as healthcare, services, technology and consumer products.

Vietnam is also increasingly integrated into international trade and Asian supply chains. The country currently has 17 free trade agreements in force, while the EU-Vietnam Free Trade Agreement has further strengthened commercial links with Europe. According to figures presented during the webinar, bilateral EU-Vietnam trade since the agreement entered into force has reached USD 383.8 billion.

Lower trade barriers, however, do not eliminate the need for local market knowledge.

Vietnam is not one market

One of Bundik’s key points was the danger of treating Vietnam as a homogeneous market.

The country’s major regions differ economically and culturally, and business practices in Hanoi and northern Vietnam may not be identical to those in Ho Chi Minh City and the south. The same strategy or communication style may therefore work differently depending on where a company operates and who its partners are.

For an incoming company, this means that national-level statistics are only the starting point. Businesses need to identify where their actual customers are, where decisions are made and which local networks matter.

For smaller European companies in particular, relying on one distributor or a generic national go-to-market strategy may be a tempting shortcut, but it can hide important regional differences.

Relationships are part of the business infrastructure

European companies may also underestimate the role of relationships and networks.

Bundik placed network-building among the core elements of risk management, alongside early risk assessment and active management of brand associations.

In practice, entering the Vietnamese market is not simply about finding the person with the right job title and presenting a proposal. Companies may need to build relationships across an organisation before understanding where influence sits and how decisions are made.

This also changes the value of a local partner. A strong partner does more than translate or handle administration. They can help a foreign company understand stakeholders, reputation, decision-making dynamics and whether an apparent opportunity is genuinely viable.

Moving fast does not always mean moving effectively

Another common challenge is timing.

Growth companies often enter a new market expecting rapid meetings, negotiations and commercial progress. Vietnam can require a different balance. Responsiveness matters, but so do patience, due diligence and relationship-building.

Bundik identified speed, time and differing understandings of commitments among the areas where foreign companies frequently misjudge the market.

The lesson is not that companies should move slowly. It is that they need to understand which parts of the process can be accelerated and which cannot.

Cultural intelligence has commercial value

The concepts of “giving face” and “losing face” were another important part of the webinar.

In practical terms, they affect how disagreement, criticism and negotiation are handled. A very direct communication style that feels efficient in Northern Europe may not always produce the same result in Vietnam.

This is not simply a matter of etiquette. Cultural understanding can affect negotiations, partner management, sales processes and execution.

For companies that have already expanded successfully in Europe, this can be particularly important. A proven expansion model may still need to be adapted significantly before it works in Vietnam.

Opportunity requires risk management

Vietnam’s growth also comes with commercial risks.

In 2025, Vietnamese market-surveillance authorities conducted 27,540 inspections and identified 23,402 violations involving areas such as counterfeit goods, intellectual-property infringement, smuggling and trade fraud.

For European SMEs, this makes early risk management essential. Companies should assess partners carefully, protect intellectual property, consider how their brand will be represented locally and understand distribution arrangements before committing substantial resources.

The fastest route into the market is not always the safest or most sustainable one.

Look beyond the headline numbers

Vietnam’s population, economic growth, manufacturing base and international trade links make it an attractive market for European companies.

But market potential and market readiness are not the same thing.

Before entering, companies need to understand where demand is concentrated, who controls access to it, how decisions are made and what must be adapted locally. Those that combine ambition with preparation, strong networks and realistic expectations are far better positioned to turn Vietnam’s growth into a sustainable business opportunity.

Leap4Growth project partners: Norrköping Science Park, Business Tampere, CLEANTECH LATVIA and Tehnopol. The project is funded by the Interreg Central Baltic Programme.