Vietnamese Consumers Hungry for their First Taste of McDonald’s

February 10, 2014 Posted by Vietnam Briefing Reading Time: 2 minutes

HCMC – Hundreds of Vietnamese people lined up outside the first McDonald’s restaurant in Ho Chi Minh City last weekend, waiting to get their first taste of the global fast-food chain’s iconic burgers. The restaurant on Điện Biên Phủ street officially opened its doors at 10 a.m. (ICT) on Saturday 8 February, making it the 10,000th Asian location for the fast-food giant.

Until now, Vietnam had been one of the few remaining countries where you could not buy the near-ubiquitous Big Mac. But with the rapid growth of Vietnam’s middle class, the introduction of the Golden Arches was inevitable.

In Vietnam, McDonald’s is targeted at the middle-to-upper class consumer, with a Big Mac costing 60,000 VND (around US$3). A local banh mi sandwich on the street costs a fraction of that price — around 10,000 to 20,000 VND (US$0.50 to US$1). However, for a growing number of Vietnamese consumers the price premium is worth it, as sinking one’s teeth into a Big Mac satiates a deeper hunger that a banh mi sandwich cannot.

“I think in many ways McDonald’s is a symbol of something bigger, particularly for a country or market when it enters. I think it’s a big deal for McDonald’s, and I think it’s something that people here feel is a special milestone,” remarked Henry Nguyen, the developmental licensee responsible for bringing the burger chain to the traditionally pho-eating nation. Nguyen, who is also the son-in-law of Prime Minister Nguyen Tan Dung, grew up in the U.S. after his family fled from the war. He flipped burgers for McDonalds as a student in the late 1980s, and dreamed of opening a branch in Vietnam when he returned in 2000.

McDonald’s joins direct rivals Burger King and Carl’s Jr, as well as Subway, Domino’s Pizza, Starbucks, and Dunkin’ Donuts to become one of the numerous U.S. brands that have expanded into Vietnam in recent years. KFC, the first to enter Vietnam’s market in 1997, remains the largest U.S. chain in Vietnam with over 135 branches in 19 cities and provinces, but other companies are determined to cash in on the opportunities presented by an emerging market with a population of around 90 million.

The reason for McDonald’s relatively late entrance was caused by issues such as inadequate supply chain logistics. Currently, the restaurant sells imported beef from Australia and potatoes from the U.S., though it plans to develop a local supply chain in the future. Hoping to make up for lost time, Nguyen stated that he aims to open 100 branches in Vietnam within a decade.

The 350-seat Ho Chi Minh McDonald’s restaurant features the usual classics on its menu: Big Macs, McChickens, and Chicken McNuggets, as well as a new McPork sandwich developed especially for the Vietnamese market.

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