Oct 19, 2012

Vietnam - Vietnam's fast food market to boom as new giants coming

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While global fast food brand names such as KFC, Lotteria, Jollibee, and Subway have become increasingly familiar to Vietnamese consumers, the local fast food market shares are expected to be rearranged as more players are jumping in the game.

Burger King, a global chain of hamburger fast food restaurants headquartered in the US, will mark its entrance to Vietnam by inaugurating a restaurant in Ho Chi Minh City on October 20.

The US giant has proved determined to explore the Vietnamese market as it plans to open as many as 12 restaurants in the last three months of this year. Five will be opened in Ho Chi Minh City, three in Hanoi, and one in Danang, besides three other stores set to open at the country’s largest airports.

Burger King has entered under the franchise model, and the total capital to develop its chain across the country is estimated to be as much as $40 million, according to beverage company Canh Dieu Xanh, which purchased the franchise.

Earlier in August, another American restaurant chain, Johnny Rockets, also decided to enter Vietnam by seeking partners for the franchise, after having conducted four years of market research in the country.

Johnny Rockets has targeted to set up 10 restaurants in Vietnam in the coming years, its chairman said in a statement.

Yet many other global players have also eyed an entrance into what analysts said is a potential market for fast food with its young population who are open to exotic food and have increasing incomes.

A delegation including chief officials of McDonald’s worked with local authorities in late August to seek investment chance, and has revealed that they may open their very first restaurants in Ho Chi Minh City and Hanoi in the next two years.

Starbucks, the Italian-style coffeehouse chain based in Seattle, has also planned to enter Vietnam next year after penetrating India, and expanding its system in China.

Rearranging market shares

As many giant global fast food chains are expected to become newcomers in the local fast food market, those who have already established a considerable presence in the country are ready to embrace the future harsh competition.

KFC, which arrived in Vietnam as early as 1997, now possesses a chain with 125 stores nationwide, with a growth rate of 20 to 30 new restaurants per year.

The world's largest chain of fried chicken fast food restaurants has redecorated its Vietnam stores to be more open and attractive to young consumers.

Meanwhile, its rival in the field of fried chicken, South Korea’s Lotteria, has also been adjusting its chain to be more adaptive to local culture.

“We will open new restaurants with wider areas and equip them with Internet connected computers. We want to provide spacious and comfortable places for local youths to get together, or even study there,” said marketing director Truong Ham Liem.

Lotteria currently has 124 stores countrywide, and is trying to reach the 140 mark by the end of this year.

The market also has other growing players such as Jollibee, which has so far opened 30 stores, and pizza restaurants Pizza Hut, Alfrescos, and Pizza Inn.

Tuoi Tre


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1 comment:

  1. Great post..It focused on size and shape of fast food market in Vietnam and analysis of major player in the fast food market like Burger King,KFC etc.Growth of fast food industry in Vietnam is due to various reason.for eg. companies tried to maintain their prices to make their food affordable to customer and paid more attention to local taste preferences.Thanks for sharing informative market report

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