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September 20, 2021, 2:36 am

McDonald’s’ future in Vietnam questionable

(15:52:39 PM 11/02/2014)
( - Being a “big cheese,” McDonald’s has been meeting big difficulties in Asian markets. It is still unclear if Vietnam can save McDonald’s from its failures in Asia

The first restaurant of McDonald's in HCM City. Photo:

As expected, the first McDonald’s shop was inaugurated on February 8 at No. 2-6bis on Dien Bien Phu Street in district 1, HCM City.


As such, McDonald’s has been present in most of the Asian markets, except Bangladesh, Bhutan, Cambodia, Laos, Myanmar, Nepal and DPRK.


Bloomberg newswire has commented that by setting foot in Vietnam, McDonald’s, for the first time in the last two decades tries to exploit a South East Asian market.


Nguyen Bao Hoang, the businessman who brings McDonald’s to Vietnam through Good Day Hospitality Company, said the first shop of the 100 shops to be opened in Vietnam within one decade, is large enough to contain 350 seats.


Hoang said the time will come when McDonald employs tens of thousands of workers in Vietnam.


Professor Markus Taussig from Singapore National University, who once lived in Vietnam, believed that McDonald’s in Vietnam would largely enjoy a custom. The customers of McDonald’s could be the Vietnamese parents, who don’t like McDonald’s, but would still bring their children there to “feel something modern.”


Ralf Matthaes from TNS Vietnam, has commented that the opening of 100 McDonald’s shops in the next 10 years in Vietnam is completely possible.


Explaining this, the expert said the Vietnamese income has been increasing sharply, thus allowing them to pay for high-priced food. McDonald’s is believed to target the Vietnamese middle class income earners, i.e. those with the monthly family income of $500-1,000.


He went on to say that children would be the main customers at McDonald’s shops, where parents would hold birthday parties for their children.


McDonald’s rivals, who came to Vietnam a long time before, have also been developing very strongly in Vietnam. Burger King, for example, has 29 shops in Vietnam since 2011, when it opened the first shop. Meanwhile, KFC of Yum!Brands has been present in Vietnam since 1997.


Meanwhile, other analysts keep doubtful about the McDonald’s’ 100-shop plan.


Thuy Lan, an office worker, thinks the parents with the monthly income of $500-1,000, or VND10-20 million, would not go to McDonald’s.


Lan and her husband can earn VND18 million a month, which she said “is just enough to cover basic needs and saving in case of emergency cases.” Therefore, she does not intend to visit McDonald’s.


Meanwhile, Business Week has doubts that the opening of shops in Vietnam can help McDonald’s make a profit in Asia once Asian customers have got fed up with McDonald’s.


McDonald’s experienced a very difficult year 2013 when Japanese and Chinese customers, the two biggest Asian markets, lost their interests in the “McDonald’s’ syndrome.”


On January 24, 2014, McDonald’s reported the 3.6 percent decrease in turnover in mainland China, an unsatisfactory figure if noting that the Chinese economy, though seeing the growth slowdown, still grew by more than 7 percent in 2013.


In Japan, analysts believe that Abenomics, the Japanese Prime Minister’s new policies may bring high profits to Toyota Motor and Hitachi, but would not benefit McDonald’s

Compiled by Chi Mai

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