Surviving Vietnam's business world
Unconventional business practices are often required in Vietnam.
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HANOI, Vietnam (CNN) -- With a curious combination of communism and capitalism, business in this Southeast Asian nation switches between the two all the time.
German retailer Metro is active in Vietnam, and is finding that you still need to have solid relations with national and local authorities before you can conduct business here.
"They have to believe in your concept and they have to believe that you will add value to the market," says Patrick Lego, the general manager of Metro in Vietnam.
"You have to be perceived that you are willing to invest here, not only in your business, but in the local environment and you have to be patient -- investment has to be seen as long term."
Metro gained its license to do business in Vietnam just four years ago and opened its first store in 2002. By the end of this year it will have seven stores in the country.
According to analysts, it is now easier for overseas businesses to set up operations in Vietnam, especially if they fall into certain categories such as export manufacturing or the service sector that supports the exporter.
"Some areas are restricted and regulated such as retail distribution, telecommunications and banking, but you can get a license to set up a 100 percent wholly foreign owned company in most areas of the economy now," says Fred Burke, from American law firm Baker & McKenzie.
"Getting a business license is much faster now than it used to be -- it used to take a year to get a wholly foreign owned license, now it takes a matter of weeks."
As well as understanding the political and business environment, appreciating the subtleties of Vietnamese culture is also essential to striking up deals.
Culture expert Diep Thai Ngoc says that even business introductions are governed by rules and ritual.
"Say hello, very softly, not strong like Americans. We are influenced strongly by Confucius here. We always have a distance between a man and a woman," she explains.
Understanding such cultural differences is just one challenge companies such as Metro face. To survive and thrive, adapting their business practices to the local Vietnamese environment is essential.
"We looked at our strategy for Vietnam and we saw that you cannot pre-pack all supermarket goods. The market was not ready for it, so we wanted to stick as close as possible to the traditional way of purchasing," says Lego.
"We thought that we would blend the two and keep imported products and more expensive products that people buy in smaller quantities, pre-packed. For local goods, customers can pick the products themselves, so they can feel, touch and smell them."
Unconventional business practices are often required in Vietnam, and you may need to indulge in one or two of them in order to find your feet, turn a profit or strike a deal.
CNN's Richard Quest and Shantelle Stein contributed to this report.
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