From post-war hardships to ‘era of national rise’: Vietnam’s family firms face first succession test

[HO CHI MINH CITY] Vietnam is entering its first large-scale generational handover.

Family-driven firms are estimated to make up as much as 80 per cent of the country’s private sector, yet most are only one generation old – having flourished in the four decades following the market-oriented “Doi Moi” reforms of the late 1980s.

That leaves Vietnam without an established succession playbook, even as businesses navigate what the country’s top leader To Lam calls an “era of national rise”, marked by the private sector’s elevation as the main growth engine and sweeping reforms to achieve high-income status within two decades.

Cuong Dang, founder and chairman of Vietnam Vanguard, a network of C-level executives, said: “Unlike China or regional peers like Thailand, where businesses have gone through multiple generations, Vietnam is still at the first wave of founders and executives. Succession planning here is still very poor.”

“It’s very emotional – different communication styles, different ‘languages’ and different expectations because of generational gaps. It’s a big challenge,” he added.

A 2021 PwC survey found that only 36 per cent of Vietnamese family businesses had a documented succession plan.

A 2025 follow-up highlighted generational misalignment as a key barrier: 38 per cent of respondents cited differing priorities between generations as a major obstacle, compared with 15 per cent globally, while 81 per cent reported family conflict, with most disputes resolved informally.

“Right now, Vietnam has extraordinary technical momentum. What it does not yet have, at scale, is a leadership pipeline to match it,” added Cuong, noting that in many local companies, founders continue to dominate strategic relationships and key decision-making.

While this was critical in the early years, he added, it has gradually created a vacuum beneath them.

“Vietnam does not have a talent shortage. The country has a leadership formation problem. And it is reaching the stage where that problem can no longer be ignored,” he said.

Forged in hardship, tested by time

Vietnam’s first generation of private business leaders broadly falls into two dominant archetypes – each leaving a distinct imprint on how the country has been shaped in the half a century after national reunification.

The first group primarily emerged from home-grown founders, many of whom built their enterprises through years of local trading and manufacturing in the difficult economy of post-war Vietnam.

They operated in an environment defined by acute shortages, weak infrastructure and minimal institutional support for private enterprise. Survival depended on improvisation, tight family coordination and a hard-line management culture.

Vuu Le Quyen, chief executive officer of Vietnam footwear maker Binh Tien Consumer Goods Manufacturing, said: “Back then, the challenge was how to turn farmers into factory workers.”

Founded in Ho Chi Minh City in 1982 by her parents – Chinese-Vietnamese entrepreneur Vuu Khai Thanh and Lai Khiem – the company, recognised locally by its brand name Biti’s, took root in a Vietnam still rebuilding just seven years after decades of war.

“They had to enforce a very strict and disciplined culture to change people’s habits and mindset so that everyone could work in a more industrial, structured way,” she told The Business Times. “The management style was top-down, almost military-like – it relied heavily on fear.”

Returning in 2004 as a chemical engineering graduate from Canada, Quyen encountered a system that, in her view, was no longer appropriate in the new-era Vietnam and threatened to stifle innovation and drive away young talent.

After various frictions with her father over management and innovation approaches in the early years, she began to make her mark by pursuing a dual strategy – launching the Biti’s Hunter sneaker line in 2016 to revitalise the household shoe brand and introducing the 2018 “Happy Biti’s” programme to boost employee well-being.

“We have to change corporate culture to empower people so that they work because they love what they do, not because they are told to by the boss,” she said. “The new model needs to be more holistic, more community-oriented – not purely driven by a single leader or just a copy of Western management styles.”

Quyen gradually gained the trust of the first-generation leaders. She was formally appointed CEO later in 2018, taking the baton from her parents as the successor of one of Vietnam’s largest shoe brands.

Biti’s story underlined a deeper challenge in Vietnam’s family businesses at this critical juncture. It is bridging generational divides, managing succession and institutionalising what was once founder-centric – a model that still prevails across much of the country.

At an April conference marking four decades of Vietnam’s economic reforms, Do Quang Vinh, vice-chairman and deputy CEO of Saigon-Hanoi Commercial Joint Stock Bank (SHB), described the weight of generational transition in Vietnam’s private sector.

“As one of the younger successors, I see this as a significant responsibility and a source of considerable pressure,” Vinh said, pointing to the intensifying wave of leadership handovers across private businesses in the country.

SHB operates within the ecosystem of T&T Group, one of Vietnam’s largest private conglomerates, founded in 1993 by Vinh’s father, Do Quang Hien – who now serves as the chairman of both the group and the bank.

T&T grew alongside Vietnam’s post-reform economy – evolving from a small trading business into a multi-sector player spanning finance, real estate, infrastructure, energy and sports.

Vinh said that his generation benefits from stronger educational foundations and broader exposure to modern management, operational and business models, as well as greater proficiency in foreign languages and emerging technologies.

“However, today’s younger generation, while formally well-trained, often lacks persistence, resilience and, at times, a certain degree of conviction and practical grounding,” he said.

“If we understand (generational differences) deeply, we can combine the strengths of each generation to better contribute to the enterprise,” he added.

From local giants to global conglomerates

The second archetype of Vietnamese entrepreneurs are those who were sent abroad for education during Vietnam’s war-torn, debt-ridden years and uneven political landscape, studying in the former Soviet Union, Eastern Europe or North America.

These overseas-educated founders returned to Vietnam in the late 1980s and early 1990s, seizing opportunities created by the country’s economic opening.

Across sectors such as banking, retail, manufacturing, real estate and aviation, a significant share of Vietnam’s modern corporate landscape has been shaped by this “returnee” network. Several of them have emerged as the country’s richest people, including Vingroup founder Pham Nhat Vuong and VietJet Air chairperson Nguyen Thi Phuong Thao.

These returnees typically share common traits – early exposure to market economies, comfort with financial engineering, and a willingness to scale rapidly through interconnected ecosystems.

For example, Johnathan Hanh Nguyen, now known as Vietnam’s “king of luxury brands”, left for the US in 1974 to pursue higher education and later worked there as a financial inspector for a Boeing subcontractor.

He returned to Vietnam nearly 10 years later, growing Imex Pan Pacific Group (IPPG) to represent at least 139 global brands in the country through more than 25 subsidiaries and joint ventures spanning high fashion, F&B, duty-free retail and airport services.

After running and expanding IPPG aggressively over the past few decades, he appears to be ready for succession. Seven of his eight children now work in the group across various units, being groomed through a bottom-up approach within a system where no sibling competes with another.

“I divide responsibilities so there’s no overlap and no conflict. Each child runs their own area independently,” Hanh Nguyen told BT. “I don’t micro-manage. Those who perform better earn more; those who are weaker have to learn and improve.”

Representing the second generation of leadership, SHB’s Vinh also outlined a vision to take founder-built companies to the next stage of growth.

“Leveraging our strengths, our generation’s task is to restructure enterprises and refine governance and development models of the legacy businesses, while preserving their culture, credibility and stature – and, at the same time, expanding their access to international markets,” he said at the April event.

Vietnam’s ambitions are rising in parallel. A landmark resolution signed by To Lam in May 2025 set a goal of doubling the number of formal private-sector firms in the country to two million by 2030, including the rapid development of large and medium-sized enterprises and private-sector conglomerates with regional and global scale.

However, the reality is that only a small subset of family firms can successfully transition from high-growth domestic players into global-scale institutions.

When surveying 32 Vietnamese family companies in 2025, PwC found that 47 per cent of these firms’ boards consist solely of family members, compared with 33 per cent globally. Some 59 per cent prioritise family employment – more than double the global average – underscoring a continued preference for keeping control within the family.

It also pointed out that Vietnamese family businesses benefit from patient capital, but tend to deploy it conservatively. While most leaders prioritise long-term resilience (91 per cent) and innovation (72 per cent), investment strategies remain short-term and risk-averse, focused on incremental gains rather than bold bets on technology and sustainability.

“This cautious approach threatens growth ambitions, especially as global competitors leverage capital for transformative change,” the report indicated.

Nguyen Thi Minh Giang, co-founder and CEO of Ho Chi Minh City-based consulting and executive education firm Newing, said that the most likely to succeed share a clear trajectory.

They are not only moving beyond founder-centric decision-making to institutional governance, but also shifting from linear growth to ecosystem-driven expansion, and expanding from domestic markets into global value chains.

“As organisations scale, operational weaknesses become more visible,” said Giang, who also serves as a board member of Gelex Group – a major Vietnamese industrial and infrastructure conglomerate. “The most successful firms are not abandoning family control. Instead, they are redesigning how it is exercised.”

Some of Vietnam’s largest firms – such as Vingroup, Masan and VietJet, founded by entrepreneurs with Eastern European education; as well as Thaco, Hoa Phat and T&T, led by founders who grew up immersed in local industries – have already begun charting this path, emerging as front runners in the country’s globalisation push.

While these firms remain founder-driven at their core, most are publicly listed and increasingly institutionalised. They are also open to external capital and professional expertise.

Their second generation is stepping into management roles – some front and centre, like AgriS’ chairperson Dang Huynh Uc My – while others maintain a low public profile, at least until their competence is proven alongside that of non-family executives.

At the 2026 annual general meeting of shareholders of Hoa Phat, Vietnam’s largest steelmaker, its billionaire chairman Tran Dinh Long said: “For the past few decades, from F0 (the founding generation) through F1 and F2, Hoa Phat has put in place a leadership structure grounded on succession and continuity.”

He added: “We have developed generations that are capable of inheriting knowledge, leading organisation, and continuing to grow Hoa Phat over the next several decades.”

Whether these successors can uphold the founders’ legacy in the new era of Vietnam remains in question. But the path has become less uncertain if family companies shift from personal leadership to system-driven management. The move will help to build organisational capability within the family, across leadership teams and with external stakeholders.

“Of course, Vietnam will continue to benefit from experienced professionals coming from abroad. That has always been part of how emerging ecosystems develop,” Vietnam Vanguard’s Cuong said.

“But no country becomes a decision-making centre by outsourcing its leadership class. At some point, it has to build one.”

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