Social enterprises making it in competitive Vietnam

Michael: "After visiting Vietnam, I not only feel equipped to do business in Vietnam but also across Southeast Asia."

Often referred to as “China +1” or “China’s China”, Vietnam is a country that has opened its doors to trade and foreign investment in recent years and companies are flocking to the market.

With the excitement around this market, it’s become hyper competitive with seemingly everyone wanting a piece of the economic rise and a population newly experiencing disposable income.

Because a social enterprise is still a business that needs to fund itself by selling products or services, competing in the market is vital for sustainability.

As a social enterprise, ‘doing the right thing’ isn’t always the most cost effective or efficient way of doing things, which can often put social enterprise models on the backfoot in the marketplace.

As Vietnam is a country where outsourcing and exporting is commonplace due to a lower cost of production, it can be challenging for social enterprises to export and compete against other businesses that are not socially conscious.

In Vietnam, the New Zealand entrepreneurs visited social enterprises to learn about what they did to stay competitive in Vietnam's competitive market

During our time in Vietnam, we met with several social enterprises that empower their local community of farmers, protect their culture and use environmentally sustainable practices.

One of my main focuses for this trip was to explore the business models behind these social enterprises and look for innovative models that can scale to replace current solutions that are not socially conscious, either now or when ‘economies of scale’ have been applied.

One weakness of social enterprise as a model is the lack of successful examples and use cases.

Understanding social enterprise business models that are working, proving a success and operating at scale (we met a social enterprise that employs over 100,000+ farmers in Myanmar) means we can apply these models to solve more of the world’s problems using social enterprise as a tool to create positive change.

A highlight of the trip was our two-day hui in Hoi An with social entrepreneurs from across ASEAN who had already taken part in the Foundation’s Young Business Leaders Initiative.

There were so many inspiring and exciting people in the group, all doing amazing things.

One business that really stood out to me  was Mycotech, a company making a vegan and more sustainable alternative to leather using mushrooms. The leather has similar properties to traditional leather, including being flame resistant.

The most exciting part is the model behind Mycotech that employs the local community as mushroom farmers in Indonesia and has a lower cost of production than traditional leather.

The venture is still quite early, so once economies of scale is applied to the model, the cost of production will drop further. 

When social enterprise products begin reaching par on price, quality and convenience as non-socially conscious options, consumers tend to naturally choose the positive impact solution. If you can create a positive impact solution that is quality, convenient and you can keep the cost of production down, you have found a real winner.

Michael says one of the highlights of the trip was getting to meet fellow entrepreneurs from around SE Asia and New Zealand

As a social entrepreneur working in the education sector, I got to connect with some exciting people in the education space in Vietnam and across ASEAN, but my main focus of the trip was understanding social enterprise models better and finding success stories.

Meeting some of the most exciting, young social entrepreneurs from across the ASEAN region was a real highlight.

Having the opportunity to better understand the larger social enterprise ecosystem and make some valuable connections outside of New Zealand was particularly special.

The kiwi social entrepreneur crew on the trip were amazing and to brush shoulders and make friends with the people in the group was a real privilege. The group chosen for the trip was diverse and highly talented; getting to share the experience with these people made it so much more rewarding.

After visiting Vietnam, I not only feel equipped to do business in Vietnam but also across Southeast Asia.

I had the opportunity to make connections from this trip to hit the ground running in so many countries. I feel I now have the confidence to do business in Asia.

Michael Watson is the Co-founder & Managing Director of StudySpy, a social enterprise with the mission of enabling access to education. StudySpy is a free course comparison site and scholarships database, with every tertiary course in Aotearoa, and over $70 million worth of scholarship opportunities.