Starbucks Shouldn’t Work in Vietnam. That’s Exactly Why It Does.

Insights from the Scaling Business Summit 2026, Ho Chi Minh City.

The room had already heard the case for Vietnam. The growth numbers, the demographic window, the reform momentum. This session started one step further along: assuming you want to be here, what is the most effective way to actually do it?

Moderated by Jorge Martin Martinez, Founder of Bull Management Consulting and former General Director at DKSH Vietnam, the panel brought together three operators who have seen both sides of this question from inside. Thann Auttanukune, Vice President at C.P. Vietnam Corporation, has been in the country for 16 years across corporate, startup, and academic roles. Will Ross, Chief Marketing and Distribution Officer at Dragon Capital, led Lazada's cross-border business in Vietnam before moving to asset management. Shehryar Ali Shah, Senior Country Officer at IFC (International Finance Corporation), has spent three and a half years deploying development capital across Vietnam's financial sector, manufacturing, and infrastructure.

Together they produced something rare: a practical strategic framework for market entry, built not from theory but from firsthand wins and specific failures.

1. There Are Three Paths, Not Two

The session title set up a binary: build or buy. Will Ross corrected it in his first answer. “It's not build or buy. There's also a third, partnership or borrow. Those are really the three paths.”

Thann offered the decision logic for choosing between them. Two questions cut through the noise. First: how fast is the relevant change happening in your target segment? If the velocity of change outpaces your ability to build, you need to buy or partner. Second: how disruptive is the technology or business model you are facing? If it is fundamental enough to make your existing capabilities obsolete, building from scratch is probably not an option. “The most important part is to really understand your business and the extent of your capabilities. Without that, we are jumping into wishful thinking.”

Will added the trade-off layer. For each path, the question is not just which one to choose but what you are acquiring and what you are giving up. Buying delivers speed to market and scale of access. Partnering reduces capital requirements but trades control. Building preserves autonomy but is slow. “Are you buying speed to market? Scale of access? Lower logistics cost? But is your trade-off control? The degree of localization required? A minority interest?” The right answer depends on what you need most and what you can afford to give up.

Lesson 1: The build-or-buy question is incomplete. Map all three paths, then evaluate each against what you need to acquire and what you can afford to trade away.

2. Vietnam Leapfrogs. Design for Where It Is Going, Not Where Others Have Been.

Thann brought a pager to SBS. Not to use it, to show it. He held it up in front of younger staff members and asked what they thought it was. They had no idea. Vietnam never had widespread pager adoption. It was not a step this market needed to take.

The same pattern runs through the country's consumer and infrastructure development. Household landlines in Vietnam are rare. China went from cash directly to WeChat payments, entirely skipping the credit card era. Vietnam's metro lines, long-running punchlines about delayed delivery opened this year, on schedule, after the government committed to the timeline with unusual force. “The consumer and the workforce have this ability to be positive and quick practitioners. They are willing to adopt change and move fast.”

The strategic implication is direct. Companies that design their Vietnam market entry around the step-by-step evolution visible in Europe or North America are solving for the wrong destination. “Fast is not the only thing, it is a pacing. Look carefully at where Vietnam stands and where it goes next.”

Lesson 2: Vietnam does not need to follow the same development sequence as the markets you know. Assume leapfrog potential and design your entry strategy for where the market is heading, not where it has been.

3. Foreignness Is Either Your Proposition or Your Problem

Will Ross used two examples that should be required reading for any company considering market entry in Vietnam. Both involve major brands. The outcomes were opposite.

Starbucks. Vietnam has some of the finest coffee in the world. A Vietnamese street vendor sells an excellent cup for 20,000 dong. Will pays 80,000 for what he calls, with affection, a mediocre Americano. He goes every day. They know him by first name. By conventional competitive logic, Starbucks should not be viable in Vietnam. It is. “Its foreignness is part of its proposition to consumers. If you ever localize that, you would lose. You would no longer be able to extract the margin that comes from being perceived as a premium product in a very crowded, very cost-competitive category.”

Lazada. When Will ran the cross-border business, Lazada had genuine local identity in each market. In Vietnam, it was a Vietnamese company. In Indonesia, Indonesian. When Alibaba became a very visible controlling presence, that positioning collapsed. “We became a Chinese company.” Consumer reaction was swift: the e-wallet usage dropped almost overnight. The fear was that data was going to Beijing. The better decision, Will argued, would have been for Alibaba to provide all the scale and buying advantage from behind the scenes and let Lazada remain Vietnamese in the consumer's mind.

The lesson is not about size or category. It is about understanding what role your foreignness plays in your specific value proposition. In some markets and categories, being visibly international is the product. In others, it is a liability that surfaces the moment consumers have a reason to distrust you.

Lesson 3: Before your market entry strategy, answer one question honestly: in your category and with your target consumer in Vietnam, is your foreignness an asset or a risk? Then design around that answer.

4. Partnerships Break at the Tire-and-Road Moment

Thann's summary of partnership dynamics was worth the session on its own. “On paper, in the initial discussion, everything goes easy. You give me this, I give you that, everything is rosy. Only when the tire hits the road, when the tension arrives, do you see whether your partnership holds.”

The variables that matter are not contractual. They are values. Do you and your partner solve problems the same way? Do you share core operating principles? The standard of alignment does not need to be perfect, it needs to be close enough that when a real conflict arrives, you can navigate it without destroying the relationship or the business. “Whatever we wrote on paper is one thing. In practice, you do not want to force another person into a corner, or get forced into a corner yourself, just to comply.”

His practical recommendation: stage-gate the relationship. Start with a limited scope, test the partnership under real operating conditions, and expand the commitment as trust is built. “Don't rush it. Take your time to understand each other and get in sync.”

Will added the structural reality that every foreign partner should expect: in any international partnership in Vietnam, the local partner tends to gain the upper hand over time. That is the natural business cycle. The question is whether that evolution is organic and mutually beneficial. The Bluetooth model, where Ericsson sits on every phone globally with no pressure to be displaced or whether the built-in business conflict makes arbitration inevitable. Shehryar noted that the VIFC's provision for overseas arbitration directly addresses what has historically been one of the most significant barriers to foreign partnership in Vietnam.

Lesson 4: Partnerships in Vietnam are won or lost in the hard moments, not the signing ceremony. Align on values early. Stage-gate the commitment. And build your exit option before you need it.

5. Two G's: Growth and Governance

The most direct framework of the session came in response to a question from the audience: what do investors in Vietnam's growth story actually need to see?

Will's answer was precise. “Two G's: growth and governance. That's the X and the Y.”

Growth: can you demonstrate expansion that exceeds what international capital can access in other markets? Vietnam's 8% GDP growth in 2024 is, as Will put it, science fiction to a Western investor. The country is one of the few markets offering that headline. But headline growth is not enough. You have to show how your specific business participates in that growth in a way that is durable.

Governance: can you be trusted with capital? “Is the return sustainable? Are you a partner who can be trusted, or do we end up in arbitration?” International capital has been burned by governance failures in emerging markets. The companies that attract serious institutional money are the ones where the growth story is matched by clean, predictable, accountable management.

Shehryar added a complement from the IFC's perspective: FDI with genuine technology transfer earns disproportionate alignment with Vietnam's government priorities. Setting up a software house or back-end operation is acceptable. Bringing something that enables technology transfer, creates local jobs, or builds capability in a sector Vietnam is trying to develop, that is what creates the deepest access and the most durable license to operate.

Lesson 5: International capital in Vietnam is looking for two things simultaneously. Prove the growth. Prove the governance. Missing either one is enough to lose the deal.

The CEO Execution Playbook: What to Do Tomorrow

1. 1. Run Thann's two-question test on your category. How fast is the relevant change happening in your segment? How disruptive is the incoming technology or model? Map the answers against your current build capacity. That will tell you whether you have time to build or whether you need to buy or partner now.
2. 2. Audit whether your foreignness is a feature or a liability. Walk through your specific value proposition and your target Vietnamese consumer segment. Is being internationally branded part of what you are selling? Or is it a trust risk that a local competitor can exploit? Design your go-to-market identity accordingly.
3. 3. Stage-gate your next partnership conversation. Define a 90-day engagement that tests alignment on a real operating decision before expanding the commitment. The handshake is easy. The first genuine conflict will tell you everything you need to know.
4. 4. Map your market entry against Vietnam's leapfrog pattern. Identify the stages in your industry's typical evolution that Vietnam may skip entirely. Design for the next stage, not the current one.
5. 5. Prepare a two-G investor brief. Before your next capital conversation, build a clear answer to both: where is the growth and how does my business specifically capture it? And what governance structure gives an investor confidence they will see the return?

→ Watch the full session on YouTube