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‘Asia Calling’ interview: Vietnam Makes Way for McDonald’s

‘Asia Calling’ interview: Vietnam Makes Way for McDonald’s

Blog article entry on: Aug 7, 2013

Asia Calling interview Vietnam Makes Way for McDonalds

This week ‘Asia Calling’ interviewed Chris Elkin, Managing Director, red brand builders, and a variety of business people in Vietnam for their views on McDonald’s entry to the Vietnam market place.

Have a listen to the full radio Interview here:

Here’s a written transcript of the radio interview:

Probably the most popular social activity in Vietnam is for friends to share a drink, snack or meal – And next year, they can do that at McDonald’s.

The multinational has announced that it will open its first outlet in Vietnam’s buzzing economic capital, Ho Chi Minh.

With rising economic growth and affluence, Vietnam’s 90 million people seem ready for a Big Mac invasion.

“Especially amongst teens and the youth market, you have a lot more people having greater exposure to more international brands,” explains Chris Elkin, director at Red, a local branding agency. “And there’s a great wanderlust, a curiosity about what those brands can bring to their lives,” he adds.

Long closed to the global market, communist-ruled Vietnam began opening up its economy in the 1990s. Since then foreign brands have become extremely popular among young people.

More than half of the population is under 30 years old – a target audience for McDonald’s, says Elkin.

“McDonald’s is relatively late getting into the market, but it is what I would consider an iconic brand,” says Elkin.

Fast food giants such as KFC, Burger King and Subway already have restaurants in Vietnam. Soon it will be the 38th Asian market in which McDonald’s operates.

The chain’s franchise has been awarded to Henry Nguyen, a Vietnam-American businessman who is also the son-in-law of the Prime Minister.

McDonald’s says Nguyen was chosen after a ‘rigorous’ selection process, although people have complained that his family connections helped him to strike the deal.

The McDonald’s announcement has also sparked a debate over health concerns. Critics say that McDonald’s will increase obesity and that Vietnamese food is healthy because it includes a lot of fruit and vegetables.

Mai Truong Giang runs a local chain of coffee and bakery shops across Vietnam. He says he will eat McDonald’s when it comes, but only in moderation.

“I think once a month is OK, but I don’t really eat a lot of junk food… Fast food is junk food so it’s not healthy so I don’t really bring my relatives to eat fast food,” says Giang. “We always go out and eat Vietnamese food. It’s more healthy.”

In the Asia Pacific region, McDonald’s already serves customers in 16 countries, including nearby Thailand and Indonesia.

Local investor Pham Ngoc Bic says the news is good for Vietnam.

“I guess it’s a sign that multinational restaurants are now paying attention to Vietnam. It’s good news for Vietnam because it offers additional branded food for the Vietnamese population,” he says.

But why did it take McDonald’s so long to enter Vietnam?

Many speculate that it will be hard for McDonald’s to source ingredients like beef and potatoes.

“The whole question of Vietnamese firms participating in US supply chains is challenging,” says Herb Cochran, who directs the American Chamber of Commerce in Vietnam.

“The questions of basic quality, basic safety, basic factory audits, labor, compliance, product liability insurance, those things are just a given when you’re working with American companies, or for that matter, I think, other international companies,” says Cochran.

Coffee and bakery entrepreneur Mai, says he’s been waiting years for McDonald’s to come to his country.

“There will be more opportunity, like young people to have a part-time job when they go study,” he says, “So those people they do not have a chance to go overseas but they can have McDonald’s or KFC or Lotteria or Burger King in Vietnam.”

Some foreigners, such as tourist Diana Goeveia drinking at a latte at Starbucks in Ho Chi Minh, have also greeted the news.

“I don’t go to Starbucks in Dublin, where we live,” she says, “But when you’re in a place where everything is so foreign, everything is so alien to you, everything is so different, you almost crave a sense of — it’s comforting, in a way.”

In other words, people connect with the familiarity of brands such as McDonald’s no matter where they are.

Vietnam is the next on the list.

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