Domestic fast food businesses are struggling to gain market share from their foreign counterparts, which have come to dominate this high-potential market.

Foreign franchises like KFC and the Republic of Korea’s Lotteria so far dominate this market. KFC expects to open 12 additional restaurants this year, raising its total nationwide to more than 80 shops. Lotteria, currently with 56 restaurants, also has plans to open two dozens more.

The fast food industry is a rapidly growing market in Vietnam, this year expected to generate profits of around 500 billion VND (about 28 million USD), up 35-40 percent over last year.

Kinh Do, Hy Lam Mon, Duc Phat and the ABC are among the domestic firms testing the waters in this market segment, and major supermarkets like Co-op Mart, Maximart, Big C and Metro have also moved to set up fast food stalls in their establishments.

Commercial baker Kinh Do has recently opened a chain of small cafes called Kinh Do Café&Bakery.

The director of Kinh Do’s business and marketing division, Nguyen Duy Dang, said a combination of bakeries and coffee bars was a popular fast food business model around the world.

The firm has since opened its first large-scale café in HCM City .

The 200sq.m. shop also serves a full menu of sandwiches, pizza, hamburgers and hot dogs.

Dang said that Kinh Do would soon open another 500sq.m Kinh Do Bakery & Café in HCM City ’s district 1.

Industry experts think domestic businesses can compete with foreign fast food restaurants not by serving western dishes but by serving food tailored to the Vietnamese palate, including meat and seafood rolls and Vietnamese-style sandwiches.

Successful Vietnamese-style fast food trademarks including Pho 24 and Banh Mi Ta. Pho 24 general director Ly Quy Trung complained, however, that renting commercial space for restaurants was still a major challenge for domestic fast food vendors, due to the prohibitively high rents in major shopping and urban centres./.