Vietnamese women at forefront of entrepreneurship

Vietnamese women entrepreneurs are better represented than almost anywhere in the Asia-Pacific

According to newswire TechCrunch, Vietnamese women entrepreneurs are doing exceedingly well, even in the global context—the country is hands down in the Top 2 in the Asia-Pacific, following Australia, in terms of the representation of women in business, be it small and medium sized enterprises (SMEs) or the boards of directors of the country’s leading corporations.

A Mekong Business Initiative (MBI) study shows that Vietnam’s enterprising women own 25 per cent of the country’s SMEs—a far cry from gender equality, but overtaking the Middle East, North Africe, and Sub-Saharan Africa, not to mention South Asia, where the average percentage is only 8 per cent.

98.8 per cent of these women-owned enterprises are micro- and small-sized, and 61.4 per cent of them operate in the services sector, which MBI claims is very similar to other countries, based on an IFC study from 2014.

By MBI’s evaluation, women-owned enterprises are somewhat more equitable and socially responsible than enterprises run by men. They employ a higher percentage of female workers (43.4 per cent against the 36 per cent of menterprises), contribute more to the national budget in taxes per worker (VND24.9 million against VND24.2 million) and spend slightly more on social insurance (36 against 35 per cent).

In addition, the majority of women-owned enterprises operate in the services sector, which is considered a more environmentally friendly economic area. On the other hand, women-owned enterprises spend less per individual worker on wages (VND1.2 against VND1.7 billion).

However, despite there being significant government consensus on supporting women-owned SMEs in Vietnam, there has yet to be an official definition of what can actually be construed as one, making supporting policies ineffective due to difficulties in identifying eligibility for support.

Although Decree No.56/2009/ND-CP on SME Development Support and the National Gender Equality Strategy for 2011-2020 explicitly mention women-owned enterprises as an area to receive support, neither has seen actual implementation, partly because of the sore lack of legal definition, partly because responsible agencies perceive SMEs owned by men or women as essentially one category: as there are policies to support SMEs, regardless of the owner’s gender, no special policies has been put forward to facilitate women in business.

Another issue women entrepreneurs commonly identify is a “lack of knowledge, market information, trade promotion, resources, and opportunities to network for business development.”

According to a 2016 IFC study, 55 per cent of women business owners admitted to needing training and other forms of support to develop their knowledge.

A 2014 GSO study showed that 33.8 per cent of women owners of SMEs have college education or less. Paired with the difficulties of balancing traditional gender roles deeply integrated into Vietnamese society, such as running the household, raising children, and taking care of the family, it is easily understandable why women entrepreneurs would need something more than the one-hat policy implemented by responsible authorities.

On a lighter note, notwithstanding lacking supporting policies and strict gender roles, Vietnam has an exceptional record of high-level women executives. According to the “Women in the Boardroom” global study of Deloitte, women hold 17.6 per cent of board seats in Vietnam, taking over any other country in the Asia-Pacific, except for Australia’s 20.1 per cent.

With this, Vietnam outperformed the global average of 15 per cent, submitting almost double the figures in Singapore (9.4 per cent) and China (9.2 per cent).

Nguyen Thi Phuong Thao, founder and CEO of Vietjet

In addition, some of Vietnam’s largest and most iconic companies have women executives at the helm. For instance, Nguyen Thi Phuong Thao, founder and CEO of Vietjet, is now Southeast Asia’s first female billionaire.

High-level women executives are present across diverse industries, from retail to agriculture as well as the startup circuit. One sector, however, where women are woefully underrepresented is the tech sector. Here, women workers and entrepreneurs face strong gender discrimination and are said to lack the necessary qualifications. To this end, a number of educational organisations are working to provide STEM training (an interdisciplinary approach to teaching science, technology, engineering, and mathematics).

Gender discrimination and sexual harassment

TechCrunch reported the outrageous experience of Huong Tran, founder of beauty retail startup Epomi, during her pitch to a group of Vietnamese investors.

“They told me that women are too emotional to run a business and they don’t like investing in them,” she said. “This was one of the leading international venture capital (VC) firms in Vietnam—I didn’t expect this.”

At the time, Epomi already posted rapid sales growth, a large and loyal customer base, as well as contracts with top suppliers and a clean plan to rise to the top of the fast growing beauty retail market.

Huong Tran, founder of beauty retail startup Epomi (Source: TechCrunch.com)

Huong graduated from Duke with an MBA and has a decade of leadership experience at top multinational corporations like Samsung and GSK, and after her long years of accomplished work experience, the rebuttal stemming simply out of her gender must have been a shock—especially as it came from the one of the leading international VC firms.

Sadly, Huong’s humiliation is by no means uncommon. Gender discrimination, even sexual harassment, is a universal challenge, especially in the men-dominated tech industry and areas where women can appear in the role of the supplicant, especially startup fund-raising.

In essence, when it comes to capital mobilisation, where startup owners have to stand before investors and make a pitch for money, power dynamics are essentially set: there is a side that asks and one that gives. The setup, by its very nature, is tilted towards investors, it gives them more bargaining chips and puts them in the dominant role to abuse at will.