Challenges and Opportunities for Vietnamese Businesses in 2025

As Vietnam approaches 2025, the influx of high-quality and affordable products from China poses a significant challenge for local enterprises, necessitating adaptation to technological changes. This period is marked by both struggles and potential for transformation, requiring quick and strategic action from Vietnamese companies.

During a recent online seminar focused on economic trends, Associate Professor Nguyen Van Minh, Director of the Institute of Training and Business Consultancy at the Foreign Trade University, highlighted the ongoing difficulties faced by Vietnamese businesses, initially noted in 2024, which are expected to continue into the next year.

Dr. Minh outlined three major hurdles that manufacturers in Vietnam need to contend with:

The first challenge is the overwhelming competition from a vast array of high-quality, low-cost Chinese products flooding global markets. He emphasized that China’s ambition to become a superpower involves utilizing its excess production capabilities to dominate these markets, putting Vietnamese domestic manufacturers at a disadvantage.

The second challenge is the rapid pace of technological innovation, especially in digital technologies and artificial intelligence (AI). By 2025, the debut of advanced synthetic AI that can replicate human thought processes is expected to change industries dramatically. The rise of “one-person billion-dollar companies,” where an individual runs a business supported by automated systems, is gaining momentum.

AI technology is already prevalent in sectors such as fintech and investment management, providing automated insights and decision-making tools. However, many Vietnamese companies still struggle with basic digital transformation, leaving them ill-equipped for this significant technological evolution.

The third challenge is the decreasing domestic purchasing power, compounded by a dependency on traditional business practices, which may leave many firms vulnerable to more agile competitors.

Despite these obstacles, Dr. Minh encouraged Vietnamese companies to collaborate with Chinese enterprises and other international players to broaden their global market presence. He pointed out that tackling these initial challenges could lead to long-term success internationally.

Additionally, Dr. Minh discussed potential economic shifts related to technological advancements, suggesting that established companies may lose their edge to innovative newcomers. He indicated that crises in traditional sectors may open doors for investments in novel business models, including electric vehicles and renewable energy.

For instance, he referenced the strategic alliance formed by Japan’s leading automakers to remain competitive in the EV and renewable energy sectors, citing VinFast as an example of capitalizing on emerging opportunities.

While Vietnam enjoys a commendable economic growth rate of 6-7%, which is heavily reliant on foreign investment and exports, Dr. Minh stressed the importance of strengthening domestic capabilities for sustainable growth.

Vietnam benefits from a strong geopolitical position and strategic alliances with key global players, providing a robust foundation for future growth. The nation’s dual transformation strategy focusing on digitalization and sustainability aligns with its Vision 2045 initiative aimed at becoming a developed nation. Recent governmental policies further emphasize this commitment, notably the Politburo’s Resolution No. 57 advocating for advancements in science, technology, and digital transformation.

Dr. Minh urged Vietnamese businesses to embrace innovation proactively. He concluded, “With the right approach to seize opportunities and create new avenues, Vietnamese enterprises can emerge as global leaders in their fields during this transformation phase.”