The world of fast-food which is expanding in Vietnam, is expected to get a boost in the coming years with big new players arriving.
Young people will help to develop the fast-food market
Since 1997, Vietnam's fastfood market has been on the rise with many big names such as Lotteria with 162 restaurants, KFC with 130 restaurants and Jollibee with 30 restaurants. The Subway restaurant chain announced its expansion plan in late 2012 and other names that are becoming more familiar are Burger King, Pizza Hut and Popeyes.
Vietnam is a promising market with 90 million people, of whom over 65% are under 35 years old. Though people have tightened their belts during the economic downturn, the fast-food market is still growing at the annual rate of 26% while other industries saw a decline. Vietnam was also ranked 8th in the Asia Pacific region in terms of food and beverage business environment by Business Monitor International in 2011.
Lotteria Vietnam's business development director Nguyen Thanh Tam said they suffered a tough time when they were first established in 1998, and the growth rate only picked up in 2010 and now, they are expecting over 40% annual growth rate.
Kao Sieu Luc, Director of Asia Bakery and Confectionery, said they hope to provide bread for McDonald's in HCM City and Hanoi. "Eight years ago, the revenue from providing bread for fast-food restaurants only accounted for 2% of our total income, however, the figure went up to 28% in 2010. It's estimated that the revenue would rise to 32% this year." he said.
Marketer Hoang Tung said Vietnam's fast-food market witnessed the first milestone 10 years ago when KFC arrived and open the first fast-food restaurant chain. They will witness the second milestone in 2014, when McDonald's, the world’s largest restaurant chain, will open its first restaurant in HCM City. Henry Nguyen, founder of Good Day Hospitality was given the license to operate McDonald’s in the country. The appearance of this giant may not only bring fast-food closer to Vietnamese culture but also change the market shares again.
"Vietnamese people have already become familiar with fast-food. This is both an advantage and a challenge to McDonald's because competitors have already taken 90% of the market share and many prime locations." Lotteria Vietnam's business development director Nguyen Thanh Tam said.
A report in 2012 by W&S Group, an online market research group in the Asia Pacific region, with 272 people aged above 16, showed that young people come to fast-food restaurant at least once every three months.
