It doesn’t look like McDonald will come to Vietnam… soon
Category: How Business is done Add commentsUntil this entry is written, the list of international fast-food franchises in Vietnam has included: KFC, Korean Lotteria, Philippino Jollibee, Pizza Inn (a Korean company brings this American franchise to Vietnam). Café and soft-drinks category consists of Australian Gloria Jean’s, San Francisco Bud’s Ice-cream, Australian Baskin Robbins (no longer in Vietnam)
It’s a surprise McDonald hasn’t expanded their market to Vietnam yet though they’ve been to Vietnam’s neighbors Singapore, Thailand and China.
To my observations, there are a couple of possible reasons:
- The herd of cattle in Vietnam is not sufficient for a sustainable supply.
- In Vietnam, fried chicken is more desirable than hamburger. Even when major focus of Lotteria is hamburger, their chicken sales figure is higher.
- One McDonald’s strength is its price (as compared to Burger King and other competitors in the US) while fast-food is still fine-dining in Vietnam.
- McDonald’s strategy is to invest in real estate alongside their fast-food product. They buy the land and build their store on it rather than rent the place. After a few years if one store doesn’t sell so well the place can be sold and the increased value of land still make it profitable to. In 2008, one house at the corner in the central of Ho Chi Minh City costs at least 2 million dollars. Investment seems way to high.
What is your opinion? Is there other reason you have thought of? Or would like to see McDonald in Vietnam?
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Tags of this article: How Business is done,investment,real-estate.
Last update May 18, 2008
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May 18th, 2008 at 12:45 pm
for everyone : we have one more option for lunch or dinner, the price might drop a little bit because there is more competition
May 18th, 2008 at 12:45 pm
I don’t know why McDonald’s enter VN so late, which will make them lose a lot of customers. The competition with KFC, Lotte, Jollibee will be more challenging for them. But I’ve also heard that they will be present in this year. Just waiting …
May 18th, 2008 at 12:45 pm
I prefer Burger King though.
May 18th, 2008 at 12:45 pm
mcdonald price is not competitive as u think. moreover they are famous for having large amount of fat in their food. i wish no fast food would come to vn because they would “poison” the vietnamese like they are doing with the american. burger king taste so bad and their service is horrible plus the high price tag. in socal ppl prefer in-n-out burgers for their healthy choice of cooking oil, less fat and low price tag. u can get a burger for $1.85, and a combo (burger, fries, soda) for $4.05, while u would pay ~$6 for a similar combo with mcdonald.
anyway fastfood are meant to be a “lazy and nothing else to eat” option for singles, they should not be a fine-dining as they are in vn right now.
May 18th, 2008 at 12:45 pm
I totally agree with the reasons you put forward.
. It remains to be seen, though, whether the younger generation is more receptive to fastfood, enough for McDonald’s to rethink.
I heard that McDonald’s did some research on the VNese market a couple of years ago and decided not to enter the market. The Vietnamese are picky and know how good food should taste like.
Anyways, I am anti-fastfood. Vietnam has such a great street food culture and I do not want to see small eateries pushed out of business by giant fastfood chains.
However, it is no bad thing if fastfood chains exist in Vietnam, simply because consumers would benefit from having more choices. Finally, fastfood helps us realise how great our own food is and stop taking it for granted.
May 18th, 2008 at 12:45 pm
Like Trang Dieu, I think Vietnamese taste in food does play a key role in deterring McDonald’s. Unlike fried chicken, hamburgers require some getting used to. Btw, fast-food chains might lead the way towards better hygiene with health & safety concerns for the consumers among local eateries though, which I wholeheartedly welcome.
May 18th, 2008 at 8:16 pm
Hi Tai:
Thanks for the add, I added your blog as well. You have a great design for your blog. I used an old theme that I edited but now I have to manually edit and update it to get it in working order again.
No need to have McDonalds in Vietnam. I have been in Saigon for 4 years and I do not miss McDs. Just read Fast Food Nation and you will understand that everything you smell and taste there is just a perfume. Plus it is high in fat content. I hate to see the Vietnamese getting fatter
There are too many Lotterias also. I do miss Wendys from the US which is higher quality than McDs I think. I think the Vietnamese could like this franchise.
May 19th, 2008 at 12:35 am
I heard that ( from an unofficial source) few years ago Ha Kieu Anh intended to be the first one who bought McDonald franchise in VN, but when she heard the initial investment was around $1mil then she quited… Anyhow, I LOVE Vietnamese food,and either McDonald comes or not, my taste of food would not change.
September 5th, 2008 at 2:39 pm
The property prices are stupid here. Really simply stupid. Just because people need to live in the center of the city due to traffic problems. It takes long to get into the city… and it’s exhausting. In any case, yeah, invest-return is probably the problem. That’s why everyone who has a business here rents… nobody seems to own anything anymore.