McDonald’s Supersizes its Business in Vietnam

March 24, 2014 Posted by Vietnam Briefing Reading Time: 3 minutes

HCMC – According to reports out this week, the newly opened McDonald’s in Ho Chi Minh City (HCMC) has already served over 400,000 hungry customers.

The new location served its first burger on February 8th of this year. On its very first day open for business the restaurant served over 22,500 customers within 24 hours.

RELATED: Dezan Shira & Associates’ Pre-Investment, Market Entry Strategy Advisory Services

McDonald’s is not the first western brand to enter Vietnam, Burger King, Starbucks, KFC and various other brands are already here. However, the success of McDonald’s new restaurant dwarfs the openings of all the other western brands. It would seem that the golden arches allure knows no borders.

McDonald’s is following its franchise model as it expands into Vietnam. The owner of this first franchise in HCMC is the Prime Minister’s son-in-law, Henry Nguyen. Interestingly, Mr. Nguyen even worked in a McDonald’s when he was young and living in the United States.

Mr. Nguyen expressed his delight at the explosive growth of his business which has surpassed even the sky-high expectations he previously held.

Unlike in many western countries where McDonald’s has lost some of its luster, the new restaurant in HCMC is viewed by many as being an exciting and superior place to eat. McDonald’s is also an aspirational symbol for many Vietnamese – the average wage in Vietnam is around US$150 a month, whereas the cost of a Big Mac in HCMC is US$2.82.

The amazing success of McDonald’s in Vietnam also points to the growing strength of the country’s consumer class and the ever-increasing amount of young people entering the workforce.

Besides its growing consumer class, one of the key attractions of Vietnam for western brands has been the Vietnamese government’s efforts to loosen investment restrictions.

Buoyed in part by businesses like McDonald’s, HCMC has seen strong growth during 2014. Over the previous two months, HCMC has seen its sales and services revenue amount to slightly over US$4.9 billion (VND 103 trillion). This is an 11.8 percent increase over the same period last year.

Alongside this trend, the city has seen a year-on-year (Y/Y) increase of 14.7 percent in its level of exports, earning around US$1.8 billion during the month of February.

Consumer confidence continues to climb steadily throughout the country.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam in addition to alliances in Indonesia, Malaysia, Philippines and Thailand as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download our brochure.

You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

A Guide to Understanding Vietnam’s VAT
In this issue of Vietnam Briefing, we clarify the entire VAT process by taking you through an introduction as to what VAT is, who and what is liable, and how to pay it properly. We first take you through the basics of VAT in Vietnam before taking you deeper into the topic. Additionally, we provide updates on the new changes to the VAT process and explain how they will impact your business. The magazine is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore until the end of April.

Vietnam Consumer Confidence on the Rise

Positive Economic Numbers for Vietnam in 2013: Strong Outlook for 2014

Vietnam Attracts Greater Foreign Investment into Retail Sector

Vietnam’s GDP Rises in 2013

Vietnam Exports Rise Thanks to Foreign Firms

Economic Zones, Industrial Parks Attract High Investment