Giant fast food restaurant chains keen on firm footholds in Vietnam

Vietnam’s fast-food franchise market is growing robust with the entrance of an array of foreign players, the Vietnam Investment Review (VIR) reported.
Vietnam’s fast-food franchise market is growing robust with the entranceof an array of foreign players, the Vietnam Investment Review (VIR)reported.

McDonald’s has just opened its first restaurant inVietnam which is capable of accommodating 350 people in-house as well asits to-go services.

In the first month of operation, therestaurant served more than 400,000 customers and sold 61,980 Big Macs,the company’s flagship burger.

According to Nguyen Bao Hoang,founder of food and travel services firm Good Day Hospitality – theVietnamese franchise holder of McDonald’s in Vietnam, the customernumbers have surpassed expectations and they plan to open secondrestaurant in Ho Chi Minh City in very near future.

Hoang hasambitious plans to spread the chain across Vietnam in a similar fashionto Singapore which has 100 McDonald’s restaurants, and the Philippineswith 400.

Coffee giant Starbucks has also advanced into Vietnamunder an agreement with Coffee Concepts Vietnam, a branch of Hong Kong’sMaxim Group.

The first outlet was launched in early February 2013.

Since,it has expanded to four stores and has scaled up efforts for theirupcoming launch in Hanoi, likely in the second quarter.

In lateOctober 2013, BBQ Vietnam’s BBQ Chicken restaurant chain, part ofKorea’s Genesis BBQ, reopened its property on Trang Tien street under anew name BBQ Premium Café.

BBQ Vietnam was one of the first fastfood chains to enter the country, since 2006 it has opened 16restaurants in Hanoi (11 under franchise agreements).

BBQreportedly has an aggressive expansion plan that aims to unseat rivalMcDonalds in terms of number of restaurants by 2020. The plan foreseesthis requiring a total 50,000 outlets.

According to BBQ Vietnamdirector Sim Hwang Jin, the company is working on a plan to expand itsoutlet system in satellite cities in the north and south as itsrestaurants are actually more successful in small cities rather than themajor ones.

Positioning in smaller localities would also helpBBQ solve the outlet space problem that often plagues franchises in bigcities.

“Global brands are competing for the top spots in big cities. Not every franchise can afford this strategy,” Sim told the VIR.

KFCis one of leading players in Vietnam at this point with 17 years in themarket and more than 180 outlets in 18 provinces and municipalities.

ButKFC might be facing mounting pressure from the wave of new brands inrecent years, that also include Burger King, Domino’s Pizza, Popeye’sand Dunkin’ Donuts, brought to Vietnam by Imex Pan Pacific Group (IPPGroup) owner Jonathan Hanh Nguyen.

Last year these chains contributed 8.04 percent to IPP’s total revenue.

TheRepublic of Korea’s Lotteria dropped anchor in Vietnam only a yearafter KFC, the brand now features over 187 Vietnam outlets.

“Aftera long presence in Vietnam, we finally won consumer confidence, whichis a solid foundation for us to overcome this difficult time,” CEO ChoYoung Jin was quoted as saying.-VNA

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