Vietnam’s fast food market looks likely to experience rapid growth in the near future.Sean T. Ngo, CEO of VF Franchise Consulting, a leading franchising and licensing consulting company with offices in Vietnam, Thailand and Singapore told Vietnam Investment Review (VIR) that Vietnam’s fast food market was expected to grow in terms of revenues to $670 million by 2015. This includes both Vietnamese and foreign fast food. “While the market is not especially large, it is the rapid growth that excites many franchise businesses as consumer incomes and spending are set to climb rapidly in the next decade,” said Ngo.
According to Ngo, while the major fast food players are currently in Vietnam, including KFC, Pizza Hut, Lotteria, Jollibee and the recent addition of brands such as McDonald’s, Texas Chicken, Burger King and Carl’s Jr, the vast majority of fast-food chains have yet to enter Vietnam. Ngo noted that in markets like China, the Philippines, and South Korea, the number of franchise chains numbered in the thousands and yet Vietnam had only approximately 110 foreign franchises registered according to the Ministry of Industry and Trade as of October 2014.
The key to successful franchises in fast food business hinges on location, quality, and customer service. Successful brands have obviously achieved these fundamentals. Brands such as McDonald’s and Starbucks obviously understand the importance of these three pillars, and so far have done a phenomenal job, added Ngo.
During 2014, international fast food operators such as Starbucks, McDonald’s, KFC, Lotteria, and Baskin-Robbins continued to further enlarge their outlet networks, especially in big cities, in order to remain competitive due to tough competition. This uptrend looks set to continue.
For instance, in early October, American coffee giant Starbucks opened its fourth store in Hanoi located on the ground floor of the Indochina Plaza Hanoi shopping centre in Cau Giay district. Starbucks opened its first store in February 2013, and its fourth a year later in Ho Chi Minh City.
McDonald’s, which opened its first Vietnamese restaurant in February last year, has opened three more since, and has even chosen other sites for further expansion. All these restaurants are located in Ho Chi Minh City.
The first Dairy Queen ice cream parlour also opened in Ho Chi Minh City. QSR Vietnam, the company that brought the well-known brand to Vietnam, stated at the opening ceremony in January last year, that it would open 60 shops in the next five years.
Baskin Robbins, another well-known ice cream brand, signed a master franchise agreement with Blue Star Food to develop the brand in Vietnam and has so far opened 16 stores in Ho Chi Minh City, one in Can Tho, one in Ba Ria-Vung Tau, and another in Hanoi. Blue Star Food expects to have 30 stores by 2015.
Pioneers KFC Vietnam, one of Vietnam’s leading players in fast food, has extended its presence to over 140 restaurants in 19 cities and provinces, while Lotteria increased its number of outlets to 200 in 2014. BBQ Vietnam, one of the earlier fast food chains to enter the country since 2006, plans to reach 500 outlets within next five years.
Source Vietnam Investment Review.