Using a local distributor can be a low-cost, low-risk, very quick way to enter the Vietnam market. Finding the right distributor, however, can be tricky. Here’s what you should be aware of when embarking on a distributor-dependent market entry.
High inflation and interest rates, along with currency fluctuations are all making it expensive and risky for businesses to expand into markets overseas. Between permits, registrations, and visas, as well as hiring staff and dealing with in-country logistics, it can also be a lot of work.
In this light, using a local Vietnamese distributor may be a better option. This is not always easy and there are risks involved. That said, with the right advice and guidance this can be an effective way of testing the waters, and with the right local partner, it can be a very lucrative way to get products and services to market in Vietnam.
Vietnam’s distribution network
Overall, Vietnam’s distribution network is vast. Geographically the country is long and narrow, and its distribution infrastructure has developed accordingly—Vietnam has a long central spine from which road and rail split off to supply its outer reaches. It also has one of the longest coastlines in Southeast Asia, which is dotted from north to south with ports facilitating global trade.
This is complemented by 22 airports that play a crucial role in transporting a diverse range of commodities across the country. Notably, the air route connecting Hanoi to Ho Chi Minh City ranks among the busiest worldwide.
These networks are then used to feed supermarkets, wet markets, convenience stores, malls, and e-commerce retailers all over Vietnam.
Source: Vietnam Briefing