Today was my first full day in Ho Chi Minh City, and I was eager to get to my first meeting of my trip. I took a Taxi to the University of Economics and Finance where I met with Bruce and Julie, who have been kind enough to help me with my schedule and setting up my meetings during my time here in Vietnam. We reviewed my schedule and some basics of the Vietnamese culture, and I was also introduced to Sue, a UEF graduate who was going to take me to my first meeting and company visit of my trip, as it is her aunt’s factory that we planned to visit. Once we finished reviewing things with Bruce and Julie, Sue and I grabbed a Taxi and headed out to one of the other districts in Vietnam to visit her aunt’s clothing factory.
Below are some pictures at UEF this morning.
Most of the factories are outside the center of the city because it is cheaper to rent facilities outside of the city and it is often closer to where the owners and workers live. Once Sue and I got to her aunt’s factory, we were greeted by some of Sue’s family, including her mom, dad, two of her aunts, and her uncle. They were incredible nice and welcoming of me into their place of business, and once we got to know each other some, I was able to talk with her aunt about her clothing factory and how she started it.
It was incredible to hear her aunt’s story of how she started up her own family business, and it made it even more surreal to be there in the factory as she told it to me. Sue had to translate between her aunt and me because her aunt didn’t speak any English and I don’t speak any Vietnamese, which also made the conversation more pure. Like many other startups, Sue’s aunt faced many challenges, the biggest of which was raising capital. While someone coming from the US might see Vietnam prices as very cheap, to the Vietnamese, raising enough capital to rent the space for a factory, hire workers, buy materials, and ship products out both domestically and internationally is a major feat. Sue’s aunt turned to friends and family for the capital and even to help staff her factory. Despite this, her profit margins are still very low, as total expenses still remain high in comparison to the prices at which she sells her products. In addition, there is a lot of competition in the clothing industry in Vietnam both from other Vietnamese producers and other global producers as Sue’s aunt sells most of her products outside of Vietnam to countries in Europe. In order to compete in the market, sometimes she actually lowers her prices in order to attract more business even though this means her profit margins are even smaller. Regardless of how many challenges she faces, she is still passionate about her work and takes pride in the work that she does. I loved to she her interact with her workers and show me how her factory operates in conjunction with her other warehouse that is close by to her main factory.
This was an eye-opening experience because when we think of factories in the US, we often think of big facilities with a lot of machinery and automation. That is not the case in Vietnam. Sue’s aunt’s factory and the other factories surrounding it have little machinery and little automation if any. For example, the only two pieces of machinery that I saw in the factory were the tool that the workers used to cut the fabric quickly and cleanly and the tool that the workers used to tie the packaged finished products together in larger quantities to be shipped out. The folding of the fabric, the folding and packaging of the finished products, and the cutting of the labels were all done by hand by the workers.
In addition, this visit to the factory and my conversations with Sue, her aunt, and the rest of her family proved to me that the start-up culture is ever present in Vietnam but not to the same extent that it is in the US. If anything, the start-up culture in Vietnam reminds me more so of the start-up scene in South Africa, as it is less advertised and promoted but instead is more of a way of life and survival sometimes. It might be a family tradition or just a better and more reliable way to provide for one’s family if there aren’t many available and accessible jobs in the marketplace. Family and friends are an important part of the culture, and this part of the culture permeates into the business world too.
Below are some pictures at Sue’s aunt’s factory.