McDonald’s faces challenges in Vietnam
McDonald’s faces challenges in Vietnam
McDonald's marked its one-year operation in Vietnam by opening its fourth restaurant in early February, as it struggles to compete in the US.
Sales of the world’s largest fast-food restaurant chain fell 4.6% last November. This is the biggest drop in sales since June 2001, and the 12th month in a row without company growth.
After the first McDonald’s stores opened in Vietnam last year, the excitement has waned due to challenges of culture and population. Long queues in front of McDonald’s restaurants are no longer there.
Are customers are willing to spend money to buy a fast-food meal at a price for four bowls of Pho (Vietnamese noodle)? Does the taste of Vietnamese people suit minced beef and fried potatoes?
A supplier for McDonald's said although the company believes in the future of McDonald's, the achievement in the first year was under expectations.
The director of a company providing logistics solutions for major F&B corporations in Vietnam also said that after a year, since McDonald's opened its first restaurant in Vietnam, contrary to predictions, the fast-food market in 2014 was not as expected and there was no "queuing to enjoy western lifestyle" anymore.
"It is interesting that in 2014, most of the F&B projects that we had were the projects with Vietnamese, Japanese, Korean foods and Beer Club," he said.
Observers said that the problem here may be related to the tastes and incomes of local people. McDonald's often uses beef, while pork and chicken are more familiar to Vietnamese.
At least 65% of Vietnam's population are under 35, the group of consumers eyed by McDonald's. The issue is that the company has to turn their restaurants into weekend destinations for Vietnamese families.
Sean Ngo, General Director of the VF Franchise Consultation Company, said McDonald's is considering a long-term "move" in Vietnam, with plans to open 100 stores in the next 10 years.
