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Vietnamese youth loving fast food

Vietnamese youth loving fast food

Blog article entry on: Nov 2, 2012

Some interesting new fast food marketing research insights, including an insight that 42% of Vietnamese want to try fast-food, with 20 to 30 year olds accounting for 76% of the business. KFC currently accounts for 60% of the fried chicken market, with Lotteria accounting for 60-70% of the hamburger market share. It’s going to be interesting to watch Burger King, McDonalds and Starbucks add to the local brand choices in Vietnam during 2013…  What it will mean for local health is another matter. Read the full article at Vietnam Investment Review or below…

Vietnamese youth loving fast food

Vietnamese youth’s taste for fast-food is creating many business opportunities for international food makers, writes VIR’s Phan Hien. La Duy Cuong, a sixth-grader at Nguyen Cong Tru secondary school, often has lunch at KFC Nguyen Truong To, Hanoi. “I have lunch here everyday, before going to school, except Sunday,” said the boy with chubby cheeks and hands. Cuong has tried BBQ Chicken and Lotteria before but he likes KFC most. When he heard that McDonald’s was going to appear in Vietnam, he got so excited about the news. “You know, I saw McDonald’s in many movies I’ve watched, so I’m looking forward to trying it.” Cuong said most of his classmates liked KFC. “Birthday parties  of many classmates of mine were held in KFC restaurants. KFC has plenty of yummy foods and desserts that meet the taste of children like us.” Youth is crazy about fast-food Nguyen Minh Thuy, a 12- schoolgirl at Dong Kinh high-school, is also truly a fan of fast-food. She eats fast-food four or five times a week. “I like BBQ Chicken most, but the price is always a problem for a student like me. Instead, I choose cheaper meals with the Lotteria restaurant near my school,” she said. Thuy told VIR that VND40,000-50,000 ($1.9-2.4) per meal excluding drink was “quite expensive”. However, her parents would give her more allowance to afford such meals when she got high marks at school. Thuy’s taste in fast-food was influenced by her friends. “When chatting with my friends, they always talked about fast-food like KFC, Lotteria and BBQ Chicken and how these fast-foods appeared romantically in some Korean dramas. I was curious and wanted to try them. I wanted to be fashionable like my friends,” she said. “Most of my classmates eat fast-food at least once a week. We can eat fast-food anytime and consider it as a snack not a main meal. Moreover, every fast-food restaurant with colourful decorations is also a place for us to pose nice pictures to post on Facebook,” Thuy smiled. Not only pupils and students are interested in fast-food but also many white-collar workers enjoy fast-food because of their tight time. Ho Phi Hung, VTC Game’s Audition marketing manager, is a fan of KFC. “Two years ago, I used to eat KFC three or four times a week. However, I’ve gained weight a lot recently. Now, I only eat KFC four times a month.” Hung’s fast-food habit started from the time he lived and studied in the UK. As a student, Hung was too busy and had no time for proper meals. “Now I often have lunch at the Lotteria restaurant near my office once a week with my colleagues. I want to enjoy meals without worrying about the quality as well as traceability of food,” he said. Employees at KFC and Lotteria staffs refused to disclose official numbers of customers they served during a typical week or day when questioned by VIR. However, Bui Tat Thanh, a security staff member of a Lotteria restaurant in Hanoi, said the growth was continuous. “Since our restaurant opened two years ago, customers have continued growing year by year. At present, there are about more than 150 customers per day, of which 50 per cent are students and pupils, and another 30 per cent are young adults.”

Opportunities and challenges for leading fast-food makers

Vietnamese youth loving fast food 02Facing fast-food fever among Vietnamese youth, international fast-food producers like KFC, Lotteria, BBQ Chicken, and Jollibee have been considering Vietnam as a very promising market given its large young population. Within the food industry sector, fast-food has become a leader in stability and growth, with an average growth of 26-30 per cent per year.

 

However, the fast-food market shares mainly lie in the hand of foreign fast-food brands such as KFC, Korea’s Lotteria and the Philippines-backed Jollibee. Foreign interests hold a range of 60-80 per cent of the shares in fast-food interest serving Vietnam, said Le Bich Phuong, CEO of VietMac RiceBurger, a rising Vietnamese fast-food brand.

 

According to a survey conducted by global market research firm Nielsen Vietnam, in 2010, 42 per cent of the total number of questioned people wanted to try fast-food. Also, the survey found the group most often eating fast-food was ages 20-30, accounting for 76 per cent of the business.

KFC accounted for 60 per cent of fried chicken market share, while Lotteria occupied 60-70 per cent of hamburger market share. The remaining market share was divided among other pizza and spaghetti brands, according to Phuong.

KFC Vietnam was the first international fast-food maker appearing in Vietnam in 1997. Up to now, KFC Vietnam had increased the number of its restaurants nationwide to 125 with a growth rate of 20 to 30 new restaurants per year, said Le Hoai Nam, KFC Vietnam’s marketing director.

Meanwhile, the South Korea-based Lotteria Vietnam, a main KFC Vietnam competitor, currently has 125 restaurants in the country, according to Lotteria Vietnam’s sales manager Nguyen Thanh Tam. The growth of Lotteria partially comes from the influence of the Korean cultural fad, with Lotteria appearing in most of Korean dramas.

Another South Korean brand, BBQ Chicken Vietnam, has now 15 restaurants in Hanoi and has been preparing to open restaurant chains in Ho Chi Minh City and Danang city in 2013. BBQ Chicken joined in the Vietnamese fast-food market later than KFC and Lotteria.

“Vietnam is a budding market with not so many big brands, so the competitition is not really drastic,” said BBQ Chicken Vietnam’s sales manager Do My Hanh.

Nguyen Thanh Duong, VietMac’s representative, said that with the preferential taste of foreign goods of Vietnamese people, these international brands were popular even before they joined Vietnam’s fast-food market. “The appearance of McDonald’s in a couple of years will make the fast-food market in Vietnam more competitive and there will be changes in market shares,” said Phuong.

The appearance of new international big brands and growth of domestic Vietnamese fast-food will pose threats to KFC Vietnam, Lotteria Vietnam and BBQ Vietnam.

“However, we’ll have our own value and market share even when the biggest competitor McDonald’s joins the market in two years,” said Hanh of BBQ Vietnam.

While global fast-food brand names such as KFC, Lotteria, Jollibee and Subway have become increasingly familiar to Vietnamese consumers, the local fast food market shares are expected to be rearranged as more players jump in the game.

Burger King, a global chain of hamburger fast-food restaurants headquartered in the US, entered Vietnam by opening a restaurant in Ho Chi Minh City on October 21.

Nowadays, unsafe food spreads everywhere. Eating in a prestigious fast-food restaurant is thought to ensure food quality and traceability.

“BBQ Chicken’s main ingredients are selected carefully and supplied by prestigious companies such as CP, Metro and Pepsi,” said Hanh.

This is also a reason many people are drawn to fast-food restaurants. Many foreigners come to fast-food restaurants to have meal when traveling or living in Vietnam.

“Sometimes, I eat KFC with my children. Each meal is quite cheap, only about $2-3 per person. And the bottom line is food safety,” said Christopher Smith, an American living in Quang An, Tay Ho district of Hanoi.

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