How to enter the Vietnamese market

Vietnam was Australia’s twelfth largest export destination in 2024, with total exports reaching AUD 14 billion. Resources and agricultural products dominate Australia’s exports, but emerging trends are presenting opportunities for a range of sectors, including food and agribusiness, education and skills, healthcare and METS.

Market entry models for exporting goods and services

Choosing an appropriate market entry model is essential for businesses looking to export to Vietnam. Any choice should be informed by factors such as the overarching business strategy, target sector, and business size and maturity. Market entry models frequently evolve over time.

A. Direct exporting

In direct exporting, businesses sell directly to a Vietnamese customer from Australia. Exporting directly to Vietnam requires a significant level of involvement in the export process, including market research, marketing, distribution, sales, product registration and approval, import-export licensing and receivables.

Direct exporting has some advantages, including:

• Greater control of commercial processes, including sales
• Better margins, as middlemen are avoided
• More direct customer relationships

While there are advantages, direct exporting may ultimately involve higher establishment costs in Vietnam, as employing dedicated in-house staff and other resources may be necessary to manage the complexities of exporting and sales. Businesses using this model may need to consider ways to offset these costs, including employing an agent or distributor to handle local product registrations, while still maintaining control over other aspects such as marketing and supply chain.

For goods exporters, approaching retailers directly in the large consumer markets of Hanoi and Ho Chi Minh City may be a more cost-effective option. A direct approach should be supported by letters, brochures, catalogues and other product and business information.

Direct exporting will require businesses to engage with customers regularly to build awareness and understanding of the products they are selling on your behalf. In return, their understanding of the Vietnamese market can be applied to product development, pricing and marketing. Selling directly to local retailers can generally cut commissions, reduce expensive travel and create an effective conduit to market.

B. Agents and distributors

Many Australian firms doing business internationally rely on agents or distributors. The roles of agents and distributors differ, and they can vary across industry. It is therefore critical that roles and responsibilities are clearly defined early in any agreement.

Agents: Agents act as representatives of suppliers and do not take ownership of the products they sell. They are usually paid on a commission basis, which provides an incentive for them to drive sales. Being based in Vietnam, they will often represent several complementary products or services. They can be retained exclusively as the sole agent for a company’s goods or services or as one of several for the exporter.

Distributors: Unlike agents, distributors buy the goods from exporters and then resell them to local retailers or direct consumers. In some cases, a distributor may sell to other wholesalers who then on-sell to retailers or consumers. Distributors may carry complementary and competing lines and usually offer after-sales service. They earn money by adding margins to product prices. Distributor margins are generally higher than agent fees because distributors have costs associated with carrying inventory, marketing and extending credit for customers.

Choosing an agent or distributor: Whether using an agent or distributor, building a close working relationship is essential. Due diligence when selecting an agent or distributor is important – ask for trade references and seek a credit check through a professional agency. It is best to meet any potential agents or distributors in Vietnam; this will give them a chance to demonstrate knowledge of the market and provide an early opportunity to build the relationship.

Time in market is an important consideration when choosing a distributor in Vietnam. As distributors have a high rate of closure, engaging an established distribution business reduces the risk of disruption to a business relationship. On the other hand, established distributors can lack the dynamism of younger companies. A balanced assessment of pros and cons can help make an informed decision.

C. Online sales

The rapid growth of Vietnam’s internet and mobile user base offers opportunities to sell products and services online. While the volume of online sales is still modest by advanced economy standards – around 6.5 per cent of total retail sales – the e-commerce market is forecast to grow to AUD 97 billion by 2030.

Government plans to increase access to online technologies are driving a surge in connectivity. Nearly 80 per cent of the population (around 79 million people) now have access to the internet. Vietnam’s e-commerce market has become one of the fastest-growing sectors in Southeast Asia. The country’s digital economy had a gross merchandise value of AUD 54 billion in 2024 and is expected to grow between AUD 139 billion and AUD 308 billion by 2030.

Accessing digital consumers: While over 60 per cent of the Vietnamese population has purchased a product or service online, a large proportion of the country is yet to engage with e-commerce. Effective marketing is vital to establish trust and brand loyalty, particularly among those discovering online retail for the first time. 

Top product categories for online sales include electronics, fashion, toys and furniture. Mobile commerce accounted for nearly half of Vietnam’s consumer goods e-commerce spend in 2022. And with 76 million social media users in 2025, social commerce is growing in popularity, with Facebook and Instagram emerging as important online sales channels.

Search engines: Search engines are a key tool for product research in Vietnam, with over half of all internet users using them to research new brands. Google is the dominant search engine, followed by Vietnam-based provider Coc Coc, Bing and Yahoo.

Figure 1: E-commerce spending on consumer goods (2023), AUD billion

Online sellers and marketplaces: While global e-commerce sites such as Amazon and eBay are available in Vietnam, Singapore-based Shopee, TikTok Shop and Lazada dominate online selling in Vietnam. 

Business should note that online marketplaces often require trademark certification, an exclusive authorisation letter and a Vietnamese business registration document before selling online.

Social media: There were 76 million social media users in Vietnam in January 2025. These users are having a major impact on the digital economy, with one in three using social media platforms to find products to purchase. The most used social media platforms are Facebook, Zalo, TikTok, Messenger and Instagram.

Investment environment

Vietnam’s political and macroeconomic credentials make it one of the most attractive markets for foreign direct investment in Southeast Asia – FDI companies accounted for two-thirds of Vietnam’s total goods exports in 2022. At the end of 2024, total FDI stock stood at AUD 377 billion.

The government encourages investment in three priority areas: high-tech industries; priority sectors like education, vocational training, healthcare, culture, sports and environment; and large-scale manufacturing projects with a minimum invested capital of VND 6 trillion (AUD 380 million) and minimum annual revenue and employee numbers.

Investment incentives are also offered in Vietnam’s key economic regions. These regions are an entry point for foreign firms and offer easy access to ports and infrastructure, specialised labour and networks of suppliers. Most businesses that enter via a key economic region are eligible for tax holidays and a reduction of CIT.

Investment rules and regulations

First time foreign investors can either create a company or sign a Business Cooperation Contract (BCC) with a Vietnamese partner. In both cases, they need to obtain an Investment Registration Certificate and Enterprise Registration Certificate before commencing business operations. The application process depends on the location of the registered office of the company or BCC. Basic information on the registration process, including a step-by-step guide, can be found below. Detailed information can be found on the Ministry of Planning and Investment’s Foreign Investment Portal.

Investment into Vietnam is regulated by the Law on Investment (2020). It now includes a market access ‘negative list’ that prohibits foreign investment in 25 sectors and restricts it in 59 others. The full list of banned and regulated sectors can be found at lawnet.vn.

The Ministry of Planning and Investment (MPI) is responsible for promoting and facilitating foreign investment. MPI and local investment promotion offices provide information and explain regulations and policies to foreign investors. Most provinces and cities also have local equivalents.

MPI’s approval process includes an assessment of the investor’s legal status, financial strength and technological expertise. It also assesses the project’s compatibility with the government’s long and short- term economic development goals, environmental protections and land use.

Market entry models for investing

Choosing an appropriate market entry model is essential for businesses looking to invest in Vietnam.

A business’ size, sector and growth strategy will help determine which market entry model fits best. Investment models frequently evolve over time as businesses enter and expand in a market.

A. Representative office

Opening a representative office can be a useful and economical first step to explore business opportunities in Vietnam. Representative offices cannot conduct direct commercial or revenue generating activities such as the execution of contracts, receipt of funds, sale or purchase of goods, or provision of services.

However, representative offices can provide a wide range of support activities to head offices back in Australia. They are a common form of presence in Vietnam for foreign companies, particularly those in the early stages of a market entry strategy.

Establishing a representative office in Vietnam

B. Franchising

Franchising allows business owners to retain a measure of control while harnessing the energy of franchisees to drive expansion. Franchises project a company’s reputation and brand, and while it can be expensive, building a network of franchises is generally cheaper than owning and operating retail or branch offices in foreign markets.

Franchising has been growing in popularity in Vietnam, with more than 300 international brands in-market in 2023. While most franchises are global fast-food chains, the franchise model also presents opportunities in other sectors, particularly in the entertainment and lifestyle sectors.

Business Cooperation Contract (BCC)

A Business Cooperation Contract (BCC) is a flexible investment vehicle defined under Vietnam’s Investment Law 2020. It refers to an agreement between two or more investors to share profits or products without forming a new legal entity or economic organisation.

Franchise activities are governed by the Ministry of Industry and Trade (MoIT). Businesses looking to enter a franchising agreement are required to register their proposed operation with MoIT. Since 2017, there are no State costs or fees associated with franchising registration in Vietnam. Franchise agreements are not given a maximum duration. The Vietnam International Retail Tech and Franchise Show a franchise trade event that can help prospective franchisors enter the market.

Establishing a franchise in Vietnam

C. Foreign-owned enterprise

Businesses can establish a separate, wholly-owned legal entity in Vietnam, known as a Limited Liability Company (LLC). LLCs are the most common type of foreign investment because of their reduced liability and capital requirements. Under this model, liability is limited to the initial capital contribution, there is no restriction on the scope of business and there are no minimum capital requirements. An LLC can be 100 per cent foreign owned. Including application times, an LLC can usually be established within two to three months, though this can vary.

This market entry model is suitable for a wide range of sectors, although there are still some restrictions as outlined in the Vietnamese Government’s negative investment list. Seek professional advice on the best structure for your business.

Establishing a foreign-owned enterprise in Vietnam

D. Joint venture

A joint venture (JV) is an agreement between two or more parties to work together on a short-term or long-term project. JVs can be an effective way to undertake research and development, create a new product or provide a new service. A local Vietnamese partner can provide knowledge and contacts, as well as a realistic assessment of risk. They can be established as either an LLC or a joint-stock company.

Each party is responsible for the profits, losses and costs associated with the activity, but a JV is an independent entity, separate from the parties’ other businesses.  

A JV is underpinned by a legal agreement between the parties. A typical agreement should include details on the:

• Legal basis for the agreement
• Structure, governance and obligations of the joint venture
• Division of profits and losses
• Ownership of intellectual property
• Disagreement or dispute resolution processes
• Leave or termination conditions

E. Public-Private Partnership

A Public-Private Partnership (PPP) is a contractual arrangement between the Vietnamese Government and the private sector. Under a PPP, the private sector can build, operate and maintain public infrastructure facilities and provide services traditionally delivered by government. Examples of these are roads, airports, bridges, hospitals, schools, railways, and water and sanitation projects.
Vietnam adopted a PPP model in the early 1990s.

The Public-Private Partnership Law (2021) has provided clarity to foreign investors and enhanced the commercial viability of PPP projects in Vietnam. Since 1990, 147 PPPs have been completed, accounting for AUD 42 billion. PPPs are complex to structure and implement, but present opportunities for established businesses to enter the Vietnamese market.

Establishing a PPP in Vietnam (from transaction phase)

Success in Vietnam requires businesses to tailor their product or service to the market. This should be based on detailed analysis of consumer trends, price consciousness, branding, marketing and advertising, and payment methods.

Rising disposable incomes are expected to lift more than half of the Vietnamese population into the global middle class by 2035. Understanding the characteristics, aspirations and spending habits of this emerging group of consumers is crucial for businesses looking to tap into the segment.

The Vietnamese middle-class consumer is young, tech-savvy and connected. They are increasingly well-educated, urbanised and brand conscious consuming experiences alongside merchandise and driving growth in online sales. While many are discerning in their spending habits, premium product offerings are growing in popularity.

Vietnam’s retail landscape is still dominated by traditional grocery stores and markets, but the rise of the consumer class will consolidate the growth of modern sales channels like department stores and e-commerce. Businesses entering Vietnam should

adjust their value propositions to cater to middle class consumer trends. Introducing premium product lines, focusing on emerging urban centres for distribution and tailoring products and services to increasingly health- and sustainability-conscious consumers can provide businesses with a competitive edge.

Consumer trends in 2024

Figure 3: Median disposable income per household (2016-2026f), AUD current prices

Price consciousness

Although Vietnam’s economy is growing rapidly, average incomes are still low compared to Southeast Asian counterparts. At AUD 6,806, Vietnam’s national income per capita is below that of Thailand (AUD 10,984) and Malaysia (AUD 18,001). Businesses must remember that price points designed for the middle class in one market may be out of reach for the middle class in another – slight price modifications to an already successful product can significantly boost sales.

Branding

Branding is as critical in Vietnam as in any market, and companies need to research and understand the specific tastes of consumers to achieve success. In Vietnam, as in much of Asia, prominent high- quality brands are in demand. While this can be a disadvantage for new brands, it is still possible to establish a reputation in the Vietnamese market through targeted promotion campaigns.

Australian businesses in some sectors enjoy a branding advantage simply by virtue of their products being made in Australia. Generally, Australian products have a strong reputation in Vietnam. An emphasis

on Australian origin can be a marketing tool for businesses expanding into Vietnam, particularly in the food and beverage and agricultural sectors. Austrade’s Nation Brand toolkit provides a range of free branding assets for businesses looking to export.

Marketing

Trade marketing to distributors and retailers is a popular and effective way for businesses to gain traction in the Vietnamese market. A trade show can be a useful starting point. These are productive ways to reach out to new consumer bases and potential clients, while also offering insights into the operations of competitors.

Sales promotions may also help to establish your brand with high-impact campaigns. Providing special discounts and events centred on your brand can

be an effective way to build consumer loyalty and product awareness – particularly in sectors that are crowded with incumbents.

Digital marketing methods are gaining popularity as smartphone penetration increases. Email, text, search engine optimisation and social media are now integral parts of a comprehensive marketing campaign.

Marketing and promotional efforts – at trade shows, sales promotions or anywhere else – should translate information into Vietnamese to ensure the greatest reach.

Advertising and media

Vietnam’s young population is driving the uptake of mobile technologies and increasing the reach of digital advertising (Figure 4). Facebook advertisements reached 76 million Vietnamese users in 2024 and TikTok advertisements reached 69 per cent of all adults aged 18 and above. While television and print advertisements remain a trusted marketing source across Southeast Asia, a digital strategy is now an essential part of any advertising campaign.

In 2025, Vietnam passed a law amending the 2012 Advertising Law, set to take effect in January 2026. The amendments expand the definition of online advertising to include social media and apps, impose stricter rules on influencer disclosures and cross-border ads, and require clearer ad identification and faster removal of illegal content. The law strengthens consumer protection, transparency, and accountability, with violators facing both administrative and potential criminal liability.

Foreign businesses should consider advertising in both English and Vietnamese – particularly with the growing use of English in Vietnam. When translating from English, however, care should be taken to ensure cultural and linguistic sensitivities – Google Translate is not sophisticated enough to pick up Vietnamese nuances. Local interpreters can aid in ensuring the suitability of your campaign.

Advertising is heavily regulated in Vietnam. The Advertising Law (2013) details restrictions on marketing certain products and registration is required for firms seeking to advertise in the pharmaceutical, agricultural and cosmetics sectors. Limits on advertising expenditure also exist and should be taken into consideration.

Australian businesses looking to promote their products or services in Vietnam can seek professional help from a number of local and international advertising and media companies. There are more than 1000 domestic advertising companies, and 30 offices of major international media brands to choose from.

Figure 4: Digital advertising audiences in Vietnam (2024)

Digital payments

While cash on delivery remains a popular form of payment for online purchases, the use of digital payments is growing rapidly (Figure 5). Domestic fintech companies are expanding their digital portfolios, the State Bank of Vietnam is piloting the use of virtual money and the growing popularity of QR codes is driving digital commerce. The use of digital payments is expected to grow alongside government support for cashless payment systems, increased banking penetration and product sophistication rollout.

Digital payments can make financial transactions safer, cheaper and more convenient. As digital payment options continue to expand and evolve in the Vietnamese market, businesses should consider integrating them into their business model.

Figure 5: Payment methods for B2C e-commerce (2024), %

A well-considered market entry strategy should take a systematic approach that supports long-term success. This section distils the factors businesses should consider when formulating an approach to the Vietnam market into a series of key questions.

Asialink Business provides advisory services and capability training programs to help organisations understand and access opportunities in Asian markets. Should you have questions about any aspect of your Vietnam market entry strategy, please contact us.

Austrade’s Vietnam office also provides services and support to Australian businesses with an interest in Vietnam (details can be found in Section 5.2).

Calibrating Ambition

• What is your company’s aspiration for the market?
• What are the challenges and risks you will need to mitigate?

Consumers

• What is the current or potential demand for your product or service in Vietnam?
• Who are the primary customers / consumers for your product or service in the market?
• How will you tailor your product or service to local preferences?

Competitors

• Who are your competitors in the market, and what is their offering?
• How does your product or service compare to competitors on price?

Delivery Partners

• Does your team have the right mix of skills and expertise to support your market entry?
• What partnerships will contribute to your business’ success in the market?
• What external advice do you need to commission?

Operating Model

• What changes do you need to make to your business across areas such as operations, HR, finance and IT?

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