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Vietnam: The Future Is Now
Posted by Rebecca Ray on August 12, 2010  in the following blogs: Business Globalization, Translation and Localization
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A survey from the Associated Press-GfK earlier this year shows that Vietnam’s economy is on the rise. A full 85% of respondents stated that the economy is stronger than it was five years ago, and 87% said that they expect it to be even stronger in another five years. How can international businesses prepare to enter this market, and what do providers of language and globalization services need to know now in order to get ready? We spoke with one of the largest localization firms in Vietnam to learn more.

Leading global firms and their suppliers should take into account the following general issues when it comes to expanding their presence in Vietnam:
  • Spending power is steadily growing. Economic growth in Vietnam has averaged more than seven percent annually over the last decade, with a real growth rate of 5.32 percent in 2009. The top three growth sectors in Vietnam today are oil and gas, IT, and banking and financial services. The number of those living below the poverty line has officially fallen from 58 percent in 1993 to 11 percent in 2009. Per capita income has risen from US$400 in 2000 to US$1,000, with people in the two biggest cities – Hanoi and Ho Chi Minh City – earning roughly twice that amount. China is Vietnam’s most important trading partner, followed by the U.S.
  • More than a quarter of Vietnam is online. Out of 89.5 million people in Vietnam, 24 million are reported to be on the internet. Vietnam is an emerging market, and one that we believe will hold increased importance in years to come.
  • It’s becoming easier to do business. Vietnam is still a planned economy under Communist rule. However, in 1986, broad economic reforms (known as “Doi Moi” or “renovation”) were introduced, allowing foreign investment to help drive what has become a boom. Joint ventures (called “Joint Venture Enterprises” or “JVEs” in Vietnam) are still the most popular vehicle for entry overall. “Enterprise with 100% Foreign Owned Capital,” or “EFOC,” is now the most common model used in the high-tech sector. Vietnam currently ranks 93 out of 183 economies for ease of doing business, according to the International Finance Corporation.
  • Most of the population is young. More than 60 percent of Vietnam’s population was born after the war ended in 1975, which means that the majority of the population is under the age of 35. With so many older people lost as a result of the war or through immigration, Vietnam’s Gen-X has had the freedom to reinvent its culture and language.
Now, what about the language, and the language services industry? We interviewed Manh Nguyen Duc, CEO of Wise-Concetti Ltd., or Vnlocalize, as it is known on the web. His company is one of the largest language services providers (LSPs) in Vietnam. Here are a few points that we gleaned from our conversation with him:
  • The Vietnamese language is rapidly evolving. Linguistically, young people continue to be very open and motivated to adopt whatever words make the most sense to express what they want to say, regardless of linguistic origin. According to Manh, most of the young people frequent Facebook, educational sites, and entertainment sites, while businesspeople tend toward e-mail, LinkedIn, and forums during the workday.
  • A Roman script narrows the language gap. During French colonial rule, the Vietnamese language moved from a traditional Chinese script to one based on the Roman alphabet. This has helped Vietnam to achieve a high literacy rate (90 percent) and a well-educated population in general, enabling the country to be a serious contender for high tech R&D centers (e.g., Intel, Nidec, and Panasonic). It also presents fewer challenges for some parts of the localization process.
  • Dialects should be taken into account. Vietnamese is a tonal language (hence, the appearance of Roman letters with diacritic marks) with three major dialects: northern, central and southern. According to Manh, there is a fairly large difference between Northern Vietnamese and the other two. Depending on the product sector, an international company may need to take this into account, along with generational differences, as it defines its messaging for local audiences.
  • Competition is alive and well. Common Sense Advisory’s latest market sizing study identified 135 language service providers in Vietnam, with about a 50-50 split between Hanoi and Ho Chi Minh City. Pricing currently averages around US$ 0.22 for English to Vietnamese, and US$ 0.25 for Vietnamese to English, according to pricing data released in July. Manh believes that prices will remain stable over the next year or so for these language pairs, as well as for others, such as Chinese to Vietnamese and vice-versa.
  • Diaspora communities are not the best source for reviewers. Manh pointed out that one common mistake that U.S. companies make – especially when localizing high-tech content into Vietnamese – is to engage reviewers among the expatriate community in the U.S. It is impossible for external communities to keep up with local nuances among young consumers in Vietnam. There are differences in perspectives that can render text awkward or inappropriate for local audiences. The life experiences of the people who left the country and those who stayed have little in common, and this is reflected in their language.
The Associated Press-GfK  found that fifty-five percent of those polled said that the Vietnam War had not affected them directly. More than half (56%) said they rarely, if ever, think about its impact on the country. Only 13% responded that the war affected them or their family to a moderate degree. The American War, as it is called in Vietnam, is simply not much of an issue as its people look toward the future – one which they believe to be very bright. Certainly, the country holds tremendous opportunity, both for international businesses seeking to enter the market, and for language service providers with operations there.

 

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