By Nguyen Nguyen
- KAUKOINTERNATIONAL IN A NUTSHELL
- Why did KaukoInternational choose South-East Asia, especially Vietnam, to be the core of the company’s business?
- Could you share any cultural gap experience and challenges when KaukoInternational first entered the market?
- What has been the greatest achievement of your company in Vietnam?
- How do you see your business in Vietnam in the next five years?
- What advice would you like to give to a Finnish company planning to enter the Vietnamese market?
- Is there an interesting fact or highlight you would like to share?
- Building Bridges
KAUKOINTERNATIONAL IN A NUTSHELL
KaukoInternational is a Finnish provider for technical and industrial equipment, processed material sales. Having an annual revenue of approximately €35 million, the company has representative offices in six countries including China, Vietnam, Russia, Poland, Kazakhstan, and Latvia with 35 people representing and three companies: KaukoInternational Central Asia, KaukoInternational Vietnam and KaukoInternational-RUS.
Niiles Airola, CEO of KaukoInternational, shared with BiziVietnam in an interview about their business success and experience to do business in Vietnam.
“Vietnam is a dynamic and emerging business environment with roughly 100 million population. There are huge potential opportunities for us to extend our business there.“
– Niiles Airola, CEO of KaukoInternational.
Why did KaukoInternational choose South-East Asia, especially Vietnam, to be the core of the company’s business?
We started our team in Vietnam around 20 years ago with the first representative office. Two years ago, we established our own company here. In South-East Asia, Vietnam is a dynamic and emerging business environment with upto 100 million population. There are huge potential opportunities for us to extend our business there.
The working culture between Vietnam and Finland is very different. For example, in Vietnam, customers can agree very fast, but they might change their minds later so nothing is set in stone before all the papers have been signed. Even having signed the contract, we need to be aware that everything can change and be interpreted in different ways. The strategy is to be flexible to figure out varied ways to deal with that. It is advisable to understand the so-called innovative business model in Vietnam, which can help you save your time and money, and you can avoid blunt business.
Business cultural differences are also reflected in how to organize meetings with Vietnamese authorities, especially in smaller cities. In those regions, people prefer face-to-face meetings, instead of remote meetings. To build trust, they want to discuss with you in person, look you in the eyes, shake your hands. Without those things, your work might not proceed smoothly.
The last thing I want to share is the difference in organizational structure between Asian and Scandinavian countries. In Europe and Scandinavia, the organization hierarchy is flat and it is difficult to tell who is the boss. Meanwhile, in Asia, the organizational hierarchy is like a pyramid where decision making is top down, meaning that the leader will make all final decisions. It is essential to know who the leader is. I wonder which model should work more effectively, the Finnish or the Vietnamese style. For example, when we need to make a decision in our company, I prefer discussing it with the team. I want all my team members to contribute to any decision made for our company. However, Vietnamese leaders or managers are expected to be the decision makers without having to get consensus from the staff. This is very important in Vietnamese business culture because it shows your capability as a leader in order to gain the trust from partners.
What has been the greatest achievement of your company in Vietnam?
We have had good discussions with potential customers with many open opportunities. We have been an outsourcing service provider of Unilever Vietnam for nearly a year. We also have many smaller deliveries to the paper industry in Vietnam. We had some valuable portfolios and projects in Vietnam as well; for example, a project with Ho Tram, Ba Ria – Vung Tau province. I can say that the most important things have come to our company.
How do you see your business in Vietnam in the next five years?
Currently, everything is ongoing great so we hope for the next five years, our business in Vietnam will start booming although there could still be challenges. However, the deeper you go, the more promising it becomes. The business going well or not depends on the mind of the people behind the process, not the business practice itself.
What advice would you like to give to a Finnish company planning to enter the Vietnamese market?
First, you need to find a good and trusted partner in Vietnam. It is also important when the partner understands your mindset. It would be great if the partner is experienced with doing business with European companies so that they are more internationally competent to work with you. It will be very helpful for your business later on. And then with that fundamental foundation, you can lead your business forward.
Second, you need to be patient with the processes of running business in Vietnam. There are many rounds and stages included. Documents are never done correctly the first time. Mistakes can come from all sides, either your side, governmental people, or authorities in charge. It could be challenging especially if you don’t know the local procedure. The same document which you used three years ago may not be good anymore after three years. It needs updating. However, it could also depend on the person you negotiate with. Different service people may raise different questions or issues. There are many people involved in the process. So to sum up, you cannot run or operate your business well without patience as well as good local knowledge.
The weather in Vietnam is very hot. 30oC in Finland right now we should call “warm” if compared to Vietnam’s temperature. However, during Christmas time, it can be hot in the south, but you can find snow in the north since the shape of Vietnam is quite long. Also, that contributes to the variety of local people in each origin, from the North, Central, South to the Mekong delta. They have different mindsets, different cultural identities. Being well aware of it will be useful for Finnish companies who are planning to enter the Vietnamese market.
At present, KaukoInternational focuses on the global distribution of Saligen, the rapid 15-minute COVID-19 Antigen Test which is being implemented in Vietnam as well.
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Interested in learning about Vietnamese business culture? Check out the Vietnamese business culture training program here.