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McDonald’s Wages Retail Premises War In Vietnam

Sep 4, 2013

Though having not officially set its foot in the Vietnamese market, the US giant McDonald’s still can make the Vietnamese fast food market seething.

McDonald's

The place where people believe the first McDonald’s shop would be located.

The fast food market, which was smoldering for a long time, suddenly flared up on July 15 when McDonald’s Global announced that Nguyen Bao Hoang, who manages IDG Ventures Vietnam, has become its official partner in a franchising contract to develop McDonald’s brand in Vietnam, through Good Day Hospitality.

The biggest common interest of many people is where McDonald’s would set up its first shop in Vietnam. Hoang, in an interview given to the local press, also admitted that the biggest challenge for McDonald’s when entering the Vietnamese market is to find out reasonable retail premises.

In principle, the premises for McDonald’s shops need to be in populated places, or the areas where there are many residing families, because its main clients are families.

Many days ago, premises hunters whispered in each others’ ears that the US fast food brand would open its first shop in districts 10 or Go Vap.

However, they now think that the first shop of McDonald’s would be set up on a very advantageous position in district 1 in the central area of HCM City, called the “prow area,” sandwiched between Tran Hung Dao and Pham Ngu Lao streets, near the 23/9 Park.

The four story building in the prow area was once the shop of Le Bao Minh who distributed Canon products. Later, it became the shop which distributed Samsung products.

Real estate market survey firms all believe this is the most ideal place for McDonald’s to set up its shop. The traffic flow in the area is very high, 10 vehicles per second, which is 2-3 times higher than that on many roads in the central area. Meanwhile, the road bed here is three times larger than other roads. It links to the Ben Thanh Market, the biggest wholesale market of the city. There is also a station of the city’s bus.

If McDonald’s shop is set up there as rumored, the fast food brand is believed to reap fruits in the domestic market very quickly. The premises can be compared with the one of Starbucks at the New World Hotel, at the Phu Dong six-way crossroads.

Meanwhile, Doanh Nhan Saigon has quoted its sources as saying that McDonald’s has also got two other retail premises in HCM City. One of the two is in Tan Phu district which covers the area large enough for setting up a shop with parking lot like the McDonald’s shops in the US.

As such, the fast food brand, from the US, has been stirring up the Vietnamese fast food market. Though being called the “new comer,” it will not give way to anyone in the race for advantageous retail premises.

The appearance of more and more fast food brands in Vietnam has made the retail premises market boisterous. Truong Ham Lien, Marketing Director of Lotteria, complained that advantageous premises are getting scarcer, and that it is very difficult to find the premises on the three-way or four-way crossroads, which are believed to be most advantageous for fast food, café, ice cream shops.

Source: DNSG

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