Sun. Apr 21st, 2024

VietNamNet Bridge – How will the fast food market will be after McDonald’s
makes its presence in Vietnam?

Vietnam, fast food, competition, giants, market

The presence of the big guy McDonald would surely lead to the big changes in the
fast food market, after it forces the rivals to re-divide the market.

Some people now feel curious about what will happen on the day the fast food
giant McDonald’s makes debut in Vietnam. Prior to that, they witnessed young
people in HCM City queuing up to wait for their turns to enjoy Starbucks coffee
on the opening day February 1, 2013.

While some analysts think that the presence of McDonald’s in Vietnam would
overpower its rivals, others think that it would not be an easy work for the
fast food chain, even though it is a big one, to penetrate the Vietnamese
market.

In fact, McDonald’s also has to overcome the barriers it meets in China when
competing with the fellow-countryman Yum!Brand which owns KFC brand, or Jollibee
in the Philippines.

A lot of foreign big fast food brands have been present in the Vietnamese
market. However, three of them are believed to lead the market, namely KFC,
Lotteria and Jollibee. All of them have been here in Vietnam since 1990, while
two of them have been coming through the franchising way.

The three biggest giants in Vietnam might have been listening to the news to
find out who would be the official partners of McDonald’s and where the first
shop of McDonald’s would be set up. They understand well that McDonald’s would
be a redoubtable rival, which would not only attract urban consumers, but
tourists as well.

At present, Lotteria is believed to have the largest chain with 146 shops, while
KFC has 156 and Jollibee 30. However, KFC is believed to have higher growth
rates and turnover.

A report of Euromonitor showed that KFC led the fastfood industry in Vietnam in
2011.

Doan Dinh Hoang, a branding consultancy expert, said the joining of McDonald’s
to the Vietnamese market would make the fast food brands’ struggle stiffer.

The three big guys in the market themselves have been competing fiercely with
each other.

With 146 shops, Lotteria obtained the turnover of VND39 billion just within 10
days, from the first day of the Lunar New Year to the 11th day of the year.
Meanwhile, it has reported the 30 percent increase in the turnover in 2012 over
2011.

The business performance of the chain is better in HCM City than in Hanoi.
Meanwhile, Hanoi is not an easy market for Lotteria because of the culture
factors, and partially because KFC is holding the upper hand in the capital
city.

Truong Ham Liem, Head of the Marketing Division of Lotteria Vietnam, said the
chain plans to open 50 more shops in 2013, while 30 percent of which would be
not in HCM City, but in other localities such as the western part of the
southern region and Da Lat City.

Not only striving to increase the coverage, Lotteria Vietnam has put a high hope
on the development of hamburger, hoping that this would be a potential menu
thanks to the reasonable price and good taste.

Not only Lotteria, KFC and Jollibee have also been pushing up the development of
their chains in Vietnam. Graham Allen, President of Yum Restaurant International
once said about the plan to develop 180 shops in Vietnam by 2014. Meanwhile,
Jollibee Vietnam told the press it wants to have 500 shops in Vietnam.

To implement the plan to expand the networks, the big guys have been moving
heaven and earth to look for retail premises. However, they need to find out the
answer to the question: “where would the first McDonald’s shop be located?”
first, before going ahead with their plans.

DNSG

By vivian