*** Best of Europolitan 2/19 ***
Vietnam ist eines der dynamischsten Länder Asiens und steht deswegen zurecht im Fokus unseres aktuellen Europolitan. Guru Mallikarjuna, Managing Director bei Bosch Vietnam, erzählt im Interview mehr über die dortige Erfolgsgeschichte des Konzerns.
Vietnam is one of Asia's most dynamic countries and our feature topic in the current issue of Europolitan. Guru Mallikarjuna, Managing Director at Bosch Vietnam, sat down with us for a chat about Bosch's local success story.
(English)
****************************
The full version of this article is available in our member magazine Europolitan 2/19 (login necessary). The interview was conducted by Katja Breitinger (MBA 2005).
Europolitan: Guru, you arrived in Vietnam in 2013, 6 years after Bosch was set up in the country . If you look back, what have been the major changes since 2013?
Guru: Actually Bosch has been active in Vietnam since 1957, with our full business entity being established in 2007. Since then, the Vietnamese economy has gone through drastic changes, with the economy growth rate reaching 7.08% in 2018, the fastest rate in the past 11 years. There has been a tremendous shift in the way consumers in Vietnam approach their spending habits, which is largely due to the growing number of internet users in Vietnam. Being social media savvy users, Vietnamese regularly shop on platforms such as Facebook, Instagram and homegrown Zalo, contributing to a large percentage of business transactions being carried out online.
The need for convenience is also fueling the so-called “on-demand” economy whereby consumers seek platforms that provide services right to their doorstep, such as delivering groceries, which in turn leads to the rapid growth of the ride-hailing and same-day delivery industry. All these developments also trigger the need for more technological advancements, a growth opportunity for Bosch.
Take Vinfast as an example. Vietnam’s first volume car manufacturer debuted two vehicles at the Paris Motor Show in October 2018. In October 2017, Vingroup and Bosch in Vietnam signed a Memorandum of Understanding to further cooperate on the car and e-scooter factory project.
What are the major differences to other important market(s) for Bosch?
Bosch Vietnam has been operating in this market for more than 10 years and has become one of the key growth markets of Bosch in Southeast Asia. Vietnam is enjoying a demographic golden age — it has the third-largest population among ASEAN countries, more than 97 million people by 2019, with a forecast annual growth rate of 1.3%. Vietnam’s workforce over the age of 15 is 53.5 million. An emphasis on education is producing an increasingly skilled workforce; there are around 45.000 graduates annually. Overall it is a very dynamic market.
What are the most typical mistakes you see being made by newcomers from Germany when they arrive in Vietnam?
I think there are three key learnings I have observed: Nothing beats experiencing the country first-hand, communication is different here and negotiation.
As an outsider, people often misjudge the dynamics of the Vietnamese market. Its past is in no way an indication of the energy and vibrancy that you feel throughout busy streets, which are full of friendly and active citizens.
Second is Communication. Having had exposure to both the German and Vietnamese cultures, I have seen a number of traps you can fall into. On one side, you will see that Germans are often very direct, which might be perceived as rude in Vietnam – generally a typical trait of the Asian culture. On the other hand, a German may also misconstrue what a Vietnamese is saying due to the indirect nature of his/her communication style.
The third is the Art of Negotiation: Never buy anything without bargaining in the traditional wet markets since the prices are often double as high as they should be.
You have been working in several functions in Vietnam, all involving team responsibilities. What are the challenges of forming a team in Vietnam with a German company?
The beauty of a company like Bosch in Vietnam is that it offers both a multinational working environment while at the same time having full exposure to the local culture. It enables unlimited opportunities for associates to exchange ideas, learn and explore.
I see it as a process of adapting and understanding when working with diverse teams. We need to look at areas such as cultural fit, international exposure, communication and soft skills, just to name a few.
At Bosch we have multiple layers of training programs. From classical classroom trainings to on the job coaching or mentoring programs. Newcomers have the chance to be part of our “Buddy Program” to quickly absorb our working culture, business knowledge and processes. In addition, international assignments also offer various opportunities for Boschlers to gain valuable hands-on experience and develop global leadership competencies.
What are your plans for Bosch in Vietnam in the next years?
The internet of things (IoT) impacts all areas of business, ranging from mobility, industrial technology, and consumer goods, to energy and building technology. With IoT as a top priority at Bosch, we have been steadily expanding our software development and engineering expertise. This includes investments in connectivity. Moving forward, we strive to make Ho Chi Minh City as one of the key IoT solution hubs for Bosch in the Southeast Asia region through our Bosch Software and Engineering R&D center.
What are going to be the major market drivers for Vietnam in the coming years?
A few global trends will be the market drivers for Vietnam which will influence and impact our business, whether directly or indirectly:
- Industry 4.0: The Vietnamese Government is devising a national strategy on Industry 4.0 and preparing to set up a national innovation center.
Bosch is at the forefront of driving the next industrial revolution, both as a lead operator and lead supplier of Industry 4.0 solutions. Robert Bosch, our company founder, once said: “The future of our industry, and any progress in the technical field, depends on the training of capable mechanics and technicians.” This statement still holds true until today.
Vietnam needs to invest in education, especially in vocational training to enable a highly-skilled workforce prepared for the 4th industrial revolution. Bosch has supported this necessity via a partnership with Directorate of Vocational Education and Training (DVET), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and LILAMA 2 International Technology College to focus on Industry 4.0 in technical and educational vocational training in Vietnam. - Smart Cities, Smart Agriculture, Smart Industries: While the government pushes for the industry and service sectors to grow with the aim of becoming an “industrialized country” by 2020, Smart cities/agriculture/industries attract high attention from both public and private sectors.
Bosch is offering intelligent solutions, namely: Traffic management, Safety and Security, Parking management, Transport management, Energy optimization, etc. that leverage the strength of sensors, software, and services. - Digitalization: Currently, the digital platform revolution is a prevalent topic in Vietnam and in the ASEAN region. The revolution was brought to the country by service providers such as Uber and Grab, with 9 local established e-hailing companies using the same business model currently operating in the country. The digitalization of transportation solutions has become the hottest trend in Vietnam, with online shopping and digital payment also taking precedence.
- Social: Vietnamese urbanization and the increase of the middle class are contributing to the significant growth of the Vietnamese retail sector which is now the fastest-growing in the region, hence influencing the way we address our customers and fulfil their needs.
- Economic: Vietnam’s export sector remains an important driver of economic growth, having brought in estimated revenues of US$ 58.86 billion in the first quarter of 2019, an increase of 5.3% from the same period last year. A number of key export items witnessed a robust growth; phones and accessories, clothing, electronics and computers, footwear, coffee, machinery and computers, as well as fruits and vegetables.
- Environmental: The “zero waste” lifestyle and mindset are emerging in Vietnam, which comes hand-in-hand with the increase in sustainable solutions for daily necessities. The government of Vietnam is also working hard to reduce air pollution in major cities.Bosch has pledged to become carbon neutral by next year, tapping on more green power, energy savings and offsetting carbon emissions. One of our latest successes in environmental solutions is the Bosch Climo – Micro Climate Monitoring System – product. The Bosch Climo is capable of monitoring real-time air quality trend, and when combined with Smart City Command & Control Center, it can reduce air pollution.
And, of course, a few personal questions: What is your favorite spot in Vietnam?
Ha Long Bay is the most beautiful, and my family loves to visit the white sand beaches of Da Nang.
And which dish have you tried only once and never again?
Durian.
Then we share the experience of Durian. Guru, thanks a lot for your time and for sharing your insights about Bosch in Vietnam.
*******************************************************
About Guru Mallikarjuna
Mr Guru Mallikarjuna was appointed as Managing Director of Bosch Vietnam in September 2017, and holds overall responsibility for 4 different business operations: Trading, Manufacturing, R&D and Business services. He is also an elected board member of Eurocham in Vietnam.
He is passionate about new technology and digitalization. Fostering innovation culture is one of his priorities. Co-workers and clients find him affable, knowledgeable, yet strategic and visionary director. He enjoys reading, swimming and playing badminton in his spare time.