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Foreign giants dominate fast food market
Foreign chains are expected to increase their presence in Vietnam’s fast food market, leaving little room for a local company to muscle into the growing market.
The market is now dominated by three fast food giants – the U.S.-based KFC, Lotteria of Japan and Jollibee of the Philippines - all serving American-style fried chicken and burgers. Young people say they enjoy eating at the outlets for their friendly atmosphere, delicious food and reasonable prices.
Market research company Nielsen estimates Vietnam’s fast food industry will grow by 40 percent this year to generate VND500 billion (US$28.1 million).
Aware of the potential of Vietnam’s fast food industry, the foreign giants are planning to expand.
Lotteria Director Nguyen Thanh Tam has announced Vietnam will have 80 Lotteria restaurants by the end of this year, up from the 56 now in operation.
KFC business official Hai Nam has revealed 12 new KFC restaurants are planned for Vietnam in 2009 to bring the number of stores to 80.
Jollibee Food Corporation (JFC) has said it plans to increase its presence in Vietnam this year to mark its 10th anniversary of the opening of its first fast-food restaurant in Vietnam.
Dennis Flore, JFC vice chairman in charge of foreign business, said several new Jollibee stores were planned for this year.
But despite persistent rumors U.S. burger giant McDonald’s plans to enter Vietnam, the company denies its entry to Vietnam is imminent.
“We have no plans currently to set up in Vietnam.” Liam Jeory, regional vice president of corporate relations at McDonald’s, told Media magazine in February, according to the magazine website.
KFC has the most fast food restaurants in Vietnam, with 20 outlets in Ho Chi Minh City and nine in Hanoi, according to a Nielsen report released in March.
Lotteria ranks second with 15 stores in HCMC and three in Hanoi. Jollibee follows with a total of 15 shops nationwide.
The report also found more than 70 percent of Vietnamese consumers – ranging from students, office workers and families - preferred fast food shops to local restaurants for the air-conditioning and the warm welcome they received from staff.
Of those surveyed, 84 percent said they would eat fast food sometime in the next six months.
All three foreign fast food chains have added cơm gà (rice with boiled chicken) to their menu of American-style fast food dishes, with much success.
Cơm gà, which sells from VND12,000 to VND22,000 (70 cents to $1.20) a dish, generates 60 percent of Jollibee’s turnover in Vietnam, Flore said.
KFC’s Tam said escaping the midday heat by going to a clean and cool KFC restaurant for a cơm gà lunch was popular among office staff across Vietnam. He estimated 90 percent of customers who ordered cơm gà were Vietnamese.
Duy Dang, from the marketing department of Vietnamese food giant Kinh Do Bakery, said there were very few local companies that could take on the foreign fast food giants now or in the near future.
Vietnamese companies can’t compete with the international fast food firms because of the huge cost of materials, personnel training and building up a brand, Dang said.
Nhu Binh
vietnews
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