Vietnamese street food favored over foreign fast food chains

Several Burger King shops in HCMC and Da Nang have closed, while Lotteria has also shut down ineffective shops. Other giants have not closed many of their shops, but they are cautious developing their chains.

McDonald’s, when setting foot in Vietnam, stated it would open 100 shops within 10 years. However, after three years in Vietnam, the giant has opened only 15 shops.

A representative of Lotteria admitted that competition in the fast food market is getting stiff with many foreign and domestic brands.

Some brands have shut down shops because their menus were not suitable to Vietnamese tastes and the prices were not competitive.

Nguyen Huy Thinh, managing director of McDonald’s, said it was normal for fast food brands to shut down unprofitable shops, while a representative from Burger King said the chain’s business has been going well with a two-digit growth rate.

However, Hoang Tung, a branding expert, blames the failure of some fast food chains on the difference between the food and Vietnamese tastes.

Burger King, for example, develops products based on burgers as the core product.

“Vietnamese still prefer banh my (sandwich) and banh my is cheaper than a burger,” Tung said. “This is why the burger chain expansion has slowed down, while banh my chains have been booming.”

Tran Anh Tuan, CEO of Pathfinder, a consultancy firm, also said that some fast food chains are not positioned well in the domestic market, and products don’t change regularly. And the price is too high compared to consumers’ income.

“Fast food, in foreign countries, is generally for the masses. But in Vietnam, fast food chains target high-income earners,” he explained.

Fast food… and rice

While western-style fast food chains are not thriving, Vietnamese and Asian food brands are doing well.

Anh from Pathfinder said that many Japanese and Korean food chains have appeared i which are closer to Vietnamese tastes.

“Korean fried chicken chains have been developing rapidly because they have reasonable prices and fit Vietnamese tastes,” he said.

In the past, only a few fast food chains sold Vietnam rice, but now it is a major dish on menus.

MOIT has granted licenses to 148 foreign brands to enter the Vietnamese market in the last eight years.

This includes 42 fast food, bakery, coffee, beverage and restaurant brands, accounting for 43.7 percent of the total.