STRENGTH IN NUMBERS

In Hanoi, as the Vietnamese expression goes, in business you need friends

By SAM PATERSON on December 15,2018 08:43 AM

STRENGTH IN NUMBERS

The tradition of businesses selling the same product working alongside each other is one grounded deep in the history of Vietnam’s capital

The new year brings new resolutions and for me it was to learn to play the guitar. Being in Hanoi, I asked a local friend where I could buy one. Instead of providing me with a shop or website, I was instead surprised to be given the name of an entire street. Hao Nam is far from being the only place where you can buy guitars and related accessories, but it is by far the most well-known and trusted by everyone, from guitar enthusiasts to regular Hanoians, like my friend.

“Guitar Street” is scarcely unique in this regard. The Old Quarter is famous for its “36 Streets”, a reference to the fact there are a great number of streets dedicated to the sale of one particular item. From silk to silverware, money to medicines, a walk down these streets reveals long lines of neighboring shops that deal in the same or very similar items. Outside the Old Quarter are a number of other streets that follow the same pattern.

It seems to fly in the face of conventional business sense. Why open a shop selling a product when there is a shop with a hold on the market already there? As my friend Thanh explained, Hanoi “pretty much goes against what we get taught at business school.” Yet, as I took time to chat with the people who run and visit such shops, it became apparent that, in Hanoi, one of the key components to a successful business is not so much competing with your competitors as working alongside them.

The tradition of businesses selling the same product working alongside each other is one grounded deep in the history of Vietnam’s capital. As early as the 11th century, according to one vendor I spoke with, workers from areas connected to a particular trade moved into the city and formed a system of guilds. These guilds centered around specialized skills, such as the making of silver bars and coins on Hang Bac, or “Silver Products Street”, and Hang Thiec, a street for tin products. The modern street names reflect their historic roots. These guilds functioned as mini-communities with their own hierarchy and where members were bound together to protect their collective livelihood. Although this system is gone and replaced by modern independent stores, it left a legacy that named and shaped these streets up to the present day.

But it is not merely a hangover of a bygone era that led to this unusual phenomenon in the city. Not only has the practice refused to die in recent years, it has even gained a new lease of life. While some streets retain their original function, many have moved wholesale to sell an entirely different type of product. Hang Dao, which previously sold silk but now sells clothes, is one example. Outside of the Old Quarter, streets such as Guitar Street have sprung up to sell modern products.

Le Thanh Nghi is another such street, known as a hub for computer-related goods. Chatting with Hieu, a vendor in one of the many hole-in-the-wall stores that line the street, he told me of the practical benefits of working alongside your direct competitors. As he owns a small business, he often finds that he doesn’t have a product a customer may need, so will work with a neighbor to supply it and make a sale.

This is one point not to be overlooked. Hieu explains himself through a popular Vietnamese business expression, “Buon co ban, ban co Phuong”, which roughly translates as “in business, you need to have friends”. This is a phrase I hear constantly as I go around the city, either literally spoken or in the words and actions of the people I talk to. As I chat to a vendor on glossy Hang Ma, where paper decorations are sold up and down the street, a neighboring seller pops in to enquire about the price of some paper bags. She takes a few to sell on to her own customer.

For Nguyen, a young Vietnamese woman who grew up watching her aunt sell clothes in a store alongside several almost identical stores in the same area, the expression is indicative of a more general mindset. She talks of her aunt as being humble and part of a common mentality that valued preserving harmony within the community. She added that her aunt told her “don’t take risks” when it comes to both business and life in general, and warned against taking on something that couldn’t be managed. These are all ingredients that make working alongside competitors a more appetizing prospect.

STRENGTH IN NUMBERS

In the eyes of customers these areas provide a great place to get a product. Not only do they often have a long tradition, these streets also offer a high amount of choice. One friend even quipped that he sees different streets as “aisles in a supermarket”. Another said that when she recently went to buy a yoga mat, going to the sports street of Nguyen Thai Hoc was an easy choice. She knows about the area from driving past it regularly, adding that there “are more options” on the street.

In the eyes of customers then, these places function not individually but as part of a homogenous whole. It makes visiting them convenient and ensures that people continue frequenting them. It’s a point that resonates with those who bring goods to the area. A friend tells me that “for the suppliers, it’s also more efficient to come to one place.” Although these businesses work separately with suppliers, dealing from one place means prices for all can be kept low.

From the point of view of the seller, then, moving to one of these areas makes sense. These are streets that provide ready-made strategies to create revenue. Back on Hang Ma I spoke with a different seller, a woman who has worked in her shop for 65 years. When I asked her how things have changed, she said the main thing is that more shops have opened over the years. Surprisingly, she added that “no shops have had to close,” testimony to just how successful this model continues to be.

Working together has always been a fixture of the Hanoi business scene. The phrase “Buon co ban, ban co Phuong” can refer to the practical benefits of having a neighbor invested in the same trade and also to the wider values of friendliness and consensus that allow these areas to operate smoothly. The phrase, just like the situation it refers to, can be traced right back to the beginnings of the city.

But what about the future? As the city hurtles into the modern age with its recent rapid development, major corporations such as Vingroup have arisen, with a hand in many trades and premises across the city. Often major corporations spell the end for small business. But it seems that now, as before, having close neighbors means small businesses can continue to prosper.

Back on Hang Ma, the woman who has seen it all tells me with a knowing smile that shoppers will continue to come to her street, despite the fact that many of the items can be bought at big name stores elsewhere. Unlike in other places, where high demand means cheaper prices, here, by working together and not in isolation, prices from suppliers through to customers are able to be kept lower than at big stores. It appears that when it comes to business in Hanoi, there will always be strength in numbers.

All Comments (0)

Other news

Winter wonders

11AM, 15 November

The cold descending upon Vietnam’s north also announces the arrival of a certain charm

  • VnEconomy - Nhịp sống kinh tế Việt Nam và thế giới

Vietnam EconomicTimes © 2014. All right reserved

An electronic media of Vietnam Economic Times - Thoi bao Kinh te Viet Nam.

Other publications of the contents this website as well as their reproductions must be approved in writing by Vietnam Economic Times.

Editor-in-Chief: Professor Dao Nguyen Cat

Licence No 04/GP-PTTH&TTDT on April 23,2014

Head Office: 98 Hoang Quoc Viet, Cau Giay District, Hanoi

Tel: (84-24) 375 2050 / Fax: (84-24) 3755 2058

Email: info.theguide@tbkt.vn ; editortheguide@gmail.com