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6. Language differences

Language is also a barrier for the Vietnamese SMEs to approach the US market. Two languages are placed on the scale: English (spoken by the US) and Vietnamese (spoken by the Vietnamese). Nowadays, English is considered as the international communication tool. At Noble Network, we require that all of our employees know English quite well because we work in both Vietnamese and English at all times. But English is not the official language of Vietnam so building relationships can be challenging. According to the  English Proficiency Index 2020 of EF Education First (Switzerland), Vietnam ranked 65th in the English skills among 100 countries and regions, which means the average English skills of the Vietnamese are only at the level of low proficiency on average. As a result, we often find unintended misrepresentations and misunderstandings during conversations that could lead to serious consequences or losses if not quickly discovered. Thus, to ensure the accuracy of the information, the Vietnamese SMEs should have knowledgeable business professionals provide translations or interpretation to help them out. 

7. Lack of finance

Entering a new market, especially a foreign market like the US, is a big deal for a Vietnamese SMEs, and often demands a lot of initial investment. In order to ensure smooth operations before and after signing a contract with the US partners, it is essential for the Vietnamese business leader to collect enough financial resources such as personnel and institutional capital. In terms of finance, unlike the big corporations who have a certain reputation and financial foundation, the SMEs can find it hard to attract an investor. Their financial resources mainly come from their family, friends and their pocket, but it is sometimes not sufficient. Then, fundraising is a big difficulty for a Vietnamese SMEs when exporting to the US. Noble Network has developed a unique trade relationship model for providing financing to Vietnamese companies that minimizes barriers to US investment into Vietnamese SMEs to solve this problem.

8. Lack of knowledge and skills 

In addition to finance, knowledge and skills are what many Vietnamese SMEs are short of. The primary reason can be their academic major is different from what they are working on so that they may lack essentially basic knowledge. When the size of the company is small, the leader can rely on their experience to run the business. However, right after it gets bigger, notably when entering a foreign market, the leader is expected to improve himself with professional economic courses such as accounting, financing, entrepreneurship, etc. in order to methodically manage the whole organization. Moreover, soft skills such as presentation, communication, leadership, work-life balance, … also contribute to build up a successful leader. Noble Network has found that investors look carefully at the people behind investment opportunities before investing. We provide a holistic approach to trade deal investments, including educationally strengthening the leaders and employees we invest in when needed.

9. Lack of trust 

With a new foreign partner, how could the Vietnamese SMEs trust them? It is such a hard question because doing businesses is risky even under good circumstances. And due to the geographic distance, cultural and language challenges, many transactions between the business leaders of two countries must be conducted online rather than face to face. This approach can easily lead to a lack of comfort that ultimately can reduce a sense of the credibility needed for cooperation. Once there is not enough trust built up between two parties, the collaboration rarely happens or it happens under the suspicion of both sides. So, how can we minimize that risk and increase the successful chance of cooperation? There should be a third party who knows both the Vietnamese SME and the US potential partner well enough to safely bridge and connect them. The third party is responsible for doing research to understand them well and create engagement meetings if they are matched with each other. US government sponsored “official” channels are required by law to source SME prospects no matter what the quality company leadership. Even worse, official channels may emphasize companies who exert political power, rather than ones that make good trade partners. We believe that the risk that SMEs take in building international trade relationships must be offset by ensuring that their foreign partners are good quality, noble, business leaders.

10. COVID-19 – the global pandemic of humankind in the 21st century

COVID-19, the global pandemic of humankind in the 21st century, is the last difficulty in exporting to the US for the Vietnamese SMEs in this list. The pandemic has caused serious losses regarding people and economy all over the world and especially in the US. Until now, there are over 112 million cases worldwide, and around 2.47 million deaths; the global economy for 2020 is expected to show negative development (-5.2% to -4.4%) based on the report of IMF and WB (10/2020). The industry which is most strongly influenced is tourism, causing another consequence – making it difficult to travel, and then, hindering the international trade in the world, including Vietnam and the US. As a result, online meetings through communicating applications such as Teams and Zoom have become a perfect solution during the pandemic. However, these technologies cannot solve the issues with regard to the international trade listed above. Therefore, the Vietnamese SMEs should equip themselves with knowledge, skills and resources to succeed in exporting to the US market.      

In a nutshell, entering the US market is attractive but also challenging. The heads of Vietnamese SMEs have to face up with a diversity of difficulties before penetrating this industry, including the external burdens such as the US Protectionism and COVID-19 pandemic, and internal obstacles such as market research, exporting procedures/paperwork, export product quality standards, culture and language differences, lack of knowledge, skills, finance and trust. It takes the leaders a long time to overcome all of these issues, and the opportunities may be gone. 

As a result, Noble Network is here to support the Vietnamese SMEs with all of our available services, helping them get over the difficulties and find out the most suitable partners in Vietnam or in the US to cooperate with and to succeed.  

Learn more about our services here.

Or contact Ms. Trang Le via: trangle@noblenetwork.vn to get the best support.