Vietnam’s Cities: A Cultural and Economic Overview for Entrepreneurs

If you are an entrepreneur looking for a new market or a new challenge, Vietnam is a country that offers you a variety of options. Vietnam is a country of diverse and dynamic cities, each with its own unique history, culture, economy, and business environment.

Whether you want to tap into a large and established market, a fast-growing and innovative hub, or a gateway to the region and the world, you can find a city that suits your needs and goals in Vietnam. However, before you decide where to set up or expand your business in Vietnam cities, you need to understand the context and characteristics of each city, and how they affect the opportunities and challenges for doing business.

In this guide, we will introduce you to some of the most business-friendly cities in Vietnam and help you compare and contrast their strengths so that you can make an informed and strategic decision.

Ho Chi Minh City: The Business Powerhouse

Ho Chi Minh City, also commonly referred to as Saigon, stands as Vietnam’s largest and most vibrant city, housing a population of over 8.6 million people. It is the country’s economic and financial powerhouse, driving its growth and development forward.

Key Industries and Market Opportunities

Ho Chi Minh City has a diverse range of industries, from traditional sectors such as manufacturing, trade, and tourism to emerging sectors such as technology, creative, and green industries. Some of the key industries and market opportunities in the city are:

• Manufacturing: Ho Chi Minh City is a busy manufacturing hub, producing a variety of products such as clothing, footwear, electronics, machinery, chemicals, and food. With over 16,000 factories and 300 industrial areas, the city has a robust manufacturing infrastructure. Furthermore, it is also exploring new industries such as aerospace, biotechnology, and renewable energy.
• Services: The city offers a diverse array of services, including finance, banking, insurance, logistics, education, healthcare, and entertainment. It is a major outsourcing destination, attracting skilled and multilingual workers.
• Technology: Known as Vietnam’s innovation powerhouse, Ho Chi Minh City is home to numerous technology startups, incubators, accelerators, and coworking spaces. The city hosts both local and foreign tech giants such as Grab, Lazada, Shopee, Samsung, Intel, and Microsoft. It actively develops key technologies like artificial intelligence, blockchain, cloud computing, and the Internet of Things.
• Creative: Ho Chi Minh City is a vibrant center of creativity and culture in Vietnam. It boasts over 100 museums, theaters, cinemas, and galleries and hosts numerous festivals, concerts, and exhibitions. The city is a hub for creative industries such as design, advertising, media, and entertainment. It supports a thriving creative economy by nurturing talents, creating creative spaces, and fostering collaborations.

Ho Chi Minh City is a city of opportunities, with a vibrant and diverse economy that attracts people from all walks of life. It has a vision to become a leading city in Southeast Asia and beyond in terms of economy, culture, and innovation.

Business Culture and Infrastructure of Ho Chi Minh City

Ho Chi Minh City is a city that welcomes business with an open, dynamic, and competitive culture. It has a spirit of entrepreneurship, innovation, customer service, and a diversity of cultures, languages, and lifestyles.

Ho Chi Minh City offers a modern and comprehensive infrastructure for businesses to develop and operate. The city’s transport network is well-developed, with an international airport, a seaport, a metro system, and a bus rapid transit system. The city also ensures a reliable and affordable energy supply with a mix of hydro, thermal, and solar power. The city also provides a high-quality and accessible telecommunication system with a wide coverage of fiber optic, broadband, and mobile networks.

Ho Chi Minh City also has a large and diverse pool of human and financial resources that can support the growth and success of new businesses. Some of the main resources in the city are:

• Human resources: Ho Chi Minh City boasts a young, talented, and highly skilled workforce of over 4.5 million workers, averaging around 30 years old. With 100+ universities, colleges, and vocational schools, the city produces over 100,000 graduates each year. This bustling metropolis also attracts a substantial number of skilled professionals from various provinces and countries, particularly in the fields of information technology, finance, and management.
• Financial resources: Ho Chi Minh City has a strong and diverse financial sector, with various institutions and services, such as banks, insurance companies, securities firms, investment funds, and microfinance organizations. It holds more than 20% of the nation’s banking assets and over 50% of the stock market capitalization. With its allure for foreign direct investment, Ho Chi Minh City attracted over 40% of the total FDI inflows to Vietnam in 2022.

Hanoi: The Cultural and Administrative Capital

With a population exceeding 8 million, Hanoi holds the distinction of being Vietnam’s second-largest city and is steeped in rich historical significance. Serving as the nation’s political and cultural hub, it houses the government’s seat and the national assembly.

Key Industries and Market Opportunities

Hanoi, Vietnam’s second-largest and most historic city, is a vibrant hub of industries. With its diverse economic landscape and rich cultural heritage, Hanoi offers an array of opportunities for growth and development:

• Agriculture: With over 40% of its land dedicated to farming, Hanoi stands as Vietnam’s largest agricultural producer. The city cultivates a wide variety of crops, including rice, vegetables, fruits, and flowers. Additionally, the city is actively developing organic and high-tech agriculture, alongside promoting agro-tourism.
• Handicrafts: Hanoi serves as the birthplace of numerous traditional and modern handicrafts, such as silk, lacquer, ceramics, embroidery, and paper. The city is home to over 1,300 craft villages, where skilled artisans produce and sell their unique creations. Hanoi also thrives as a hub for creative and design industries, including fashion, jewelry, and furniture. Efforts are made to preserve and innovate these handicrafts while expanding their export capabilities and brand recognition.
• Tourism: As Vietnam’s most visited city, Hanoi welcomes over 30 million tourists annually. The city boasts a rich cultural heritage and diverse natural attractions, featuring over 6,000 historical and cultural sites such as Hoan Kiem Lake, the Temple of Literature, the Ho Chi Minh Mausoleum, and the Old Quarter. Hanoi offers a plethora of attractions and activities, including museums, theaters, festivals, and delectable cuisine. Ongoing efforts are focused on enhancing tourism infrastructure and services, such as hotels, restaurants, and transportation.
• Technology: Hanoi takes pride in being Vietnam’s leading city for technology and innovation. With over 2,000 startups, 30 incubators and accelerators, and 20 coworking spaces, the city fosters a dynamic tech ecosystem. The city is also home to numerous local and foreign tech companies, including FPT, VNG, VinGroup, Google, and Facebook. Key technology developments in Hanoi encompass areas like 5G, artificial intelligence, big data, and cloud computing.
• Finance: Ranking as Vietnam’s second-largest financial center after Ho Chi Minh City, Hanoi hosts a wide range of financial institutions and services, including banks, insurance companies, securities firms, investment funds, and microfinance organizations. The city accounts for over 15% of the nation’s total banking assets and more than 30% of the stock market capitalization. Additionally, Hanoi offers various financial support programs and incentives for small and medium enterprises, including preferential loans, tax benefits, and subsidies.
• Healthcare: Hanoi takes the lead in providing high-quality and accessible healthcare services in Vietnam. With over 1,000 hospitals, clinics, and pharmacies, the city ensures the well-being of its residents. It also houses numerous specialized and international healthcare facilities, along with medical universities, research institutes, and biotechnology companies. Continuous efforts are made to enhance healthcare infrastructure and services, such as telemedicine, e-health, and smart health solutions.

Hanoi’s vibrant industries, rich traditions, and dedication to innovation create a city teeming with opportunities and prospects for both local and international ventures.

Hanoi’s Role as the Capital City and Its Business Potential

Hanoi, the capital city of Vietnam, plays a crucial role in the country’s development. It serves as a hub for decision-making, policy formulation, and hosts a multitude of national and international events and meetings. Beyond its administrative functions, Hanoi holds a prominent position as a center for culture, education, innovation, and inspiration within Vietnam.

Hanoi’s strategic location and connectivity make it an enticing destination for trade and investment. Serving as a bridge between the northern and southern regions of Vietnam, as well as between Vietnam and the rest of the world, the city offers favorable conditions for business growth and collaboration.

The capital city’s unique position also presents entrepreneurs and investors with a host of advantages and opportunities, including:

• Large and Growing Market: With a population exceeding 8 million people, Hanoi boasts a substantial and expanding consumer base. The city experiences high demand for various products and services, particularly in sectors such as technology, tourism, finance, and healthcare.
• Talented and Skilled Workforce: Hanoi benefits from a young, educated, and dynamic population that places a strong emphasis on science, technology, and innovation. With over 3.5 million workers and an average age of 32, the city has a talented and skilled workforce. Moreover, Hanoi is home to 80+ universities, colleges, and vocational schools, producing over 80,000 graduates annually.
• Supportive Business Environment: Hanoi offers a supportive and favorable business environment characterized by a stable and transparent legal system, streamlined administrative procedures, a competitive and diverse business sector, and a proactive and responsive government. The city’s industrial parks, export processing zones, and high-tech parks further facilitate the growth and development of various sectors and industries.
• Rich Cultural Heritage: Hanoi takes pride in its rich and diverse cultural heritage, encompassing a storied history, a vibrant and dynamic culture, and a populace known for its friendliness and hospitality. The city’s distinct identity and charm serve as a magnet for visitors and customers, enhancing the reputation and brand value of Hanoi and its businesses.

Hanoi’s role as Vietnam’s capital city brings forth immense potential for entrepreneurs and investors. The city is a fertile ground for business ventures to thrive and flourish.

Da Nang: A City of Opportunities

Da Nang, the third-largest city in Vietnam, offers a wealth of opportunities for growth and development. With its strategic location and diverse economic landscape, Da Nang presents a promising environment for various industries to thrive.

Key Industries and Market Opportunities

Da Nang, a vibrant city in Vietnam, stands as a beacon of economic potential and diverse market opportunities. This coastal city, blending modern dynamics with rich cultural heritage, has steadily transformed into a key player in various industries, attracting global attention.

Its unique blend of natural beauty, innovative spirit, and strategic development initiatives positions Da Nang as a fertile ground for business growth and investment:

• Tourism: Da Nang is a popular tourist destination, attracting millions of visitors annually. The city is renowned for its breathtaking natural attractions, including pristine beaches, majestic mountains, and the UNESCO World Heritage Site, Hoi An Ancient Town. In addition to its natural beauty, Da Nang hosts a vibrant array of cultural events and festivals, providing ample opportunities for businesses in the hospitality, entertainment, and travel sectors to flourish.
• Technology and Innovation: Da Nang is swiftly emerging as a dynamic hub for technology and innovation in Vietnam. It houses a multitude of tech companies, startups, and research institutions. With a specific focus on areas like software development, digital services, and smart city solutions, Da Nang offers an ideal environment for tech-driven businesses to thrive and succeed.
• Manufacturing and Export: Boasting a robust manufacturing sector, Da Nang has a particular emphasis on electronics, textiles, and automobile components. Its strategic location and excellent connectivity make it a prime location for export-oriented industries. The city’s deep-water port and close proximity to major transportation routes facilitate efficient logistics and trade operations.
• Education and Training: Well-known for its quality education institutions, Da Nang produces a skilled workforce in various fields, creating opportunities for businesses in sectors such as education, training, and research.
• Infrastructure Development: Da Nang is currently experiencing substantial growth in its infrastructure, with notable expansions underway for its airport, seaport, and transportation networks. These developments bring forth a plethora of opportunities for businesses operating in construction, logistics, and related industries to thrive and prosper.
• Cultural Heritage: Da Nang holds its cultural heritage dear, harmoniously blending traditional Vietnamese customs with influences from diverse ethnic groups. The city’s vibrant cultural attractions, lively festivals, and exquisite local crafts present ample avenues for businesses in the tourism, arts, and handicraft sectors to flourish and contribute to the city’s cultural tapestry.

Da Nang’s strategic location, supportive business environment, and diverse economic landscape make it an attractive destination for entrepreneurs and investors. The city’s focus on tourism, technology, manufacturing, education, and infrastructure development presents a range of opportunities for businesses to thrive and succeed.

Da Nang’s Role as a Thriving Coastal Hub and Its Business Potential

Da Nang, a vibrant coastal city in Vietnam, assumes a pivotal role in the country’s development. As a flourishing center of culture, education, and innovation, Da Nang offers a wealth of opportunities for businesses seeking growth and success.

Situated along Vietnam’s captivating coastline, Da Nang serves as a gateway between the north and south regions of the country. Its excellent connectivity, including an international airport and well-connected transportation networks, makes it an enticing destination for trade and investment.

Da Nang’s advantageous location creates favorable conditions for business expansion and collaboration:

• Expanding Consumer Market: Boasting a population of over one million residents and a steady influx of tourists, Da Nang offers a sizable and growing consumer market. The city showcases high demand across various sectors, notably hospitality, real estate, technology, and leisure.
• Talented Workforce: Da Nang benefits from a young and talented workforce driven by a strong commitment to education, innovation, and entrepreneurship. This talent pool, eager to contribute to the city’s development, is a valuable resource for businesses in Da Nang.
• Supportive Business Environment: Da Nang fosters a dynamic and supportive business environment characterized by transparent legal systems, streamlined administrative procedures, and an active and responsive government. The city’s industrial parks and innovation centers provide an ideal ecosystem for businesses to thrive, particularly in sectors such as technology, tourism, manufacturing, and services. Da Nang’s dedication to promoting and facilitating business growth attracts entrepreneurs and investors from around the globe.
• Enchanting Natural Beauty and Cultural Heritage: Beyond its business potential, Da Nang entices visitors with its breathtaking beaches, majestic mountains, and UNESCO World Heritage Sites like Hoi An Ancient Town. Embracing its rich cultural heritage, the city celebrates traditional Vietnamese customs while embracing diverse influences. This vibrant cultural tapestry enhances Da Nang’s appeal and offers a unique selling point for tourism, arts, and handicraft businesses.

Da Nang is a vibrant coastal city and a hub for culture, education, and innovation, thereby being an irresistible choice for businesses looking for a dynamic and diverse environment.

Other Notable Vietnam Cities for Investment Opportunities

While Ho Chi Minh City, Hanoi, and Da Nang are the key cities for business and investment in Vietnam, there are several other cities that offer promising opportunities for investors and entrepreneurs. These cities are characterized by their unique strengths, strategic locations, and growing sectors.

Hai Phong: The Northern Industrial and Maritime Center

Hai Phong, located in northern Vietnam, is a significant industrial and maritime hub. With its deep-water port, the city plays a crucial role in international trade and shipping.

Key Industries and Market Opportunities:

• Port and Logistics: The Port of Hai Phong, one of the largest in Vietnam, is a central point for maritime trade and logistics. Investments in port infrastructure and logistics services offer lucrative opportunities.
• Manufacturing and Industrial Parks: The city hosts several industrial parks and economic zones, attracting investments in manufacturing, especially in the electronics, automotive, and machinery sectors.
• Real Estate and Urban Development: The expansion of industrial and commercial activities fuels the demand for real estate, making it a promising sector for investment.

Can Tho: The Mekong Delta’s Economic Leader

Can Tho, known as the ‘Rice Bowl of Vietnam,’ is the largest city in the Mekong Delta and plays a critical role in the region’s agricultural and fishery industries.

Key Industries and Market Opportunities:

• Agriculture and Aquaculture: With its fertile land and extensive river systems, Can Tho is ideal for investments in agriculture, especially rice and fruit production, and in aquaculture.
• Tourism and Hospitality: The city’s rich cultural heritage and scenic beauty, including floating markets and rural landscapes, offer potential for tourism and hospitality businesses.
• Education and Healthcare: As a regional educational and medical center, there are opportunities for investment in educational institutions and healthcare facilities.

Nha Trang: The Coastal Resort City

Nha Trang, a coastal city in Khanh Hoa Province, is famous for its beaches and marine life, making it a popular destination for both domestic and international tourists.

Key Industries and Market Opportunities:

• Tourism and Hospitality: The city’s beach resorts, scuba diving, and marine life are major attractions. Investments in hotels, resorts, and entertainment facilities have high potential.
• Seafood Processing and Export: Leveraging its coastal location, Nha Trang has opportunities in seafood processing and export.
• Real Estate Development: The growing tourism industry boosts demand for real estate development, including residential and commercial properties.

Binh Duong: The Emerging Industrial Powerhouse

Located near Ho Chi Minh City, Binh Duong has experienced rapid industrialization and is now a significant manufacturing and industrial hub.

Key Industries and Market Opportunities:

• Manufacturing and Industry: The province is home to several industrial parks focusing on sectors like electronics, textiles, and furniture.
• Research and Development: The presence of industrial zones and a growing economy make Binh Duong ripe for investments in research and development, particularly in manufacturing technologies.
• Urban Development and Infrastructure: The growing population and industrial activities necessitate the development of urban infrastructure, offering opportunities in construction and related services.

Hue: The Cultural and Historical Center

As the former imperial capital, Hue is known for its rich history and cultural significance. It is a UNESCO World Heritage Site, attracting tourists interested in Vietnam’s heritage.

Key Industries and Market Opportunities:

• Cultural Tourism: Investment in tourism infrastructure and services catering to visitors interested in culture and history has strong potential.
• Education and Healthcare: As a center of education in Central Vietnam, there are opportunities in academic institutions and healthcare facilities.
• Agri-business: The surrounding regions offer opportunities in agriculture, particularly in specialty crops and organic farming.

These cities, with their distinct characteristics and growth potentials, present a diverse range of opportunities for investors and businesses looking to explore beyond the major urban centers in Vietnam. Their development trajectories, supported by government policies and investments, make them attractive destinations for a variety of industries.

Business Across Vietnam: Comparing Cities

Vietnam is a country of diverse regions, each with its own characteristics, strengths, and challenges. For entrepreneurs and investors looking to start or expand their businesses in Vietnam, choosing the right city is a crucial decision.

Criteria for Choosing the Right City

There are many factors to consider when choosing a city for your business in Vietnam, depending on your industry, target market, resources, and costs. Some of the main factors are:

• Market: The size, growth, and demand of your potential customers in the city. You should also consider the level of competition, the regulatory environment, and the opportunities and threats in the market.
• Culture: The values, beliefs, and behaviors of the local people and how they affect your business. You should also consider the level of openness, diversity, and innovation in the city’s culture.
• Resources: The availability and quality of human, financial, and physical resources in the city. You should also consider the level of education, skills, and experience of the local workforce, the access and cost of capital, and the infrastructure and facilities in the city.
• Costs: The expenses and risks associated with doing business in the city. You should also consider the level of taxation, inflation, and corruption in the city, as well as the legal and political stability.

Comparative Analysis of Business Environments in Different Vietnam Cities

To provide a comprehensive comparison of the business environments across different cities in Vietnam. These cities represent diverse regions of Vietnam and offer unique opportunities and challenges for businesses.

We have utilized a rating scale from 1 to 5, where 1 is the lowest and 5 is the highest, to evaluate each city based on factors such as market potential, cultural environment, available resources, and cost-effectiveness.

The results are summarized in the table below:

From this table, Ho Chi Minh City emerges as the highest-rated city, signifying its robust business environment. Hanoi, Da Nang, and Hue also score highly, indicating their strong potential. It’s important to note that Can Tho, while having a lower overall score, offers unique opportunities in agriculture and aquaculture.

This analysis, however, should be a starting point. It’s essential to consider your specific business goals, industry requirements, and personal preferences when choosing a location for your business. Each city’s unique strengths and challenges should be aligned with your business strategy for optimal results.

Moreover, it’s important to stay updated with the latest economic and policy developments in these regions, as they can significantly influence the business climate. Engaging with local experts and conducting on-ground research can provide deeper insights and aid in making an informed decision.

Recommendations for Entrepreneurs Based on Business Goals

Depending on your business goals and preferences, you may find different cities more suitable for your business. Here are some general recommendations based on common business goals:

1. For Access to Large and Dynamic Markets:
   • Ho Chi Minh City and Hanoi: These cities are your top picks if you’re aiming for high market potential and dynamic customer segments. They lead in terms of market size and diversity but come with higher competition and operational costs.
   • Binh Duong: Close to Ho Chi Minh City, it’s also a promising option with growing market potential, especially if you’re in the manufacturing or industrial sectors.
2. For Skilled and Talented Workforce:
   • Ho Chi Minh City and Hanoi: They are the hubs of highly educated and skilled professionals, offering robust tech and innovation ecosystems. However, higher labor costs and turnover rates can be expected.
   • Da Nang and Hue: These cities also offer access to talented professionals, especially in fields related to tourism and cultural sectors.
3. For Minimizing Costs and Risks:
   • Da Nang: Known for its lower operational costs and supportive business environment, it’s ideal for those looking to minimize risks.
   • Can Tho and Nha Trang: These cities offer cost-effective opportunities, particularly in sectors like agriculture, tourism, and seafood processing.
4. For New and Emerging Opportunities:
   • Da Nang: It’s a breeding ground for untapped markets and unique cultural and natural attractions, suitable for innovative and entrepreneurial ventures.
   • Hai Phong: As a northern industrial and maritime center, it offers opportunities in logistics and port-related industries.
   • Hue: With its rich cultural heritage, it’s ideal for businesses in cultural tourism and related sectors.
5. For Industrial and Manufacturing Ventures:
   • Hai Phong and Binh Duong: These cities are significant for manufacturing and industrial sectors, offering robust infrastructure and growing markets.
6. For Agriculture and Aquaculture Investments:
   • Can Tho: Being the ‘Rice Bowl of Vietnam,’ it’s the prime location for investments in agriculture and aquaculture.
7. For Tourism and Hospitality Businesses:
   • Nha Trang and Hue: With their natural beauty and cultural significance, these cities are perfect for tourism and hospitality ventures.

But remember, this analysis is only a general guide. You should also look into the specific factors that affect each city, such as their economy, culture, and regulations, and see how they match your business model and goals. Moreover, keeping up with the latest news in the region and getting advice from local experts can help you make a better decision.

Conclusion

Vietnam is a vibrant and diverse country that presents numerous opportunities for business owners seeking new markets and growth prospects. Each city within Vietnam has its unique strengths and challenges, necessitating a thorough analysis of economic, cultural, and regulatory factors that influence the business landscape.

For entrepreneurs venturing into Vietnam, one of the pivotal decisions is selecting the ideal city and location for their operations. Depending on their business model and objectives, they may prioritize a city with a sizable and diverse market, a robust and supportive ecosystem, a competitive and cost-efficient environment, or a combination of these factors.

At The Sentry, a leading coworking space provider in Ho Chi Minh City, we take pride in offering flexible and affordable workspaces that cater to the diverse needs of businesses, from freelancers and startups to SMEs and corporations. With a firm belief in Vietnam’s dynamic and diverse business landscape, we understand the importance of analyzing the unique strengths and challenges of each city, considering economic, cultural, and regulatory factors.

With The Sentry, you can experience the convenience, comfort, and productivity of a coworking space in Ho Chi Minh City, while benefiting from valuable resources, connections, and guidance to navigate the Vietnamese market and achieve your goals. The Sentry is not just a coworking space; we are your dedicated partner and platform for business success in Vietnam.

Discover the possibilities with The Sentry and unlock your business potential in Vietnam. Join us today!