McDonald’s bites into Vietnamese market
Print Edition
Four decades after the Vietnam war ended, US fast-food giant McDonald’s opened its first restaurant in the country yesterday, aiming to lure a rising middle class away from rice and noodles.
The arrival of one of the most potent symbols of US capitalism in southern Ho Chi Minh City — known as Saigon when American troops dramatically withdrew in 1975 — is the result of a partnership with the son-in-law of Vietnam’s Prime Minister Nguyen Tan Dung.
McDonald’s is following US rivals Burger King, KFC and coffee giant Starbucks into Vietnam.
Signs of the country’s rising affluence were on display yesterday as hundreds of people — mostly young students or families with children — queued at the McDonald’s store on Dien Bien Phu street, named after the battle that ended French colonial rule in the country.
“I like fast-food. I don’t like Vietnamese food. I don’t like fish sauce,” customer Nguyen Hoang Long as he devoured a Big Mac meal, referring to the condiment made from fermented fish and sea salt that is used liberally in local cooking.
“McDonald’s in Vietnam is seen as a high-class restaurant,” added the 25-year-old, who acquired a love of fast food while studying in California.
A Big Mac costs about US$2.85 at the Vietnamese outlet, while a bowl of traditional pho noodle soup can be bought on most street corners for US$1.50.
The relatively high price positions McDonald’s as an aspirational dining option, economist Le Dang Doanh said.
For the first time last year, absolute consumption of rice in Vietnam began to slowly decline as the wealthy seek alternative sources of carbohydrates, according to a World Bank report.
But the Vietnamese “are still used to eating rice and noodles,” Doanh said. “McDonald’s will have to find solutions.”
With a population of 90 million and average per capita income of more than US$1,500, “Vietnam is on the radar now” for US franchises, said Sean Ngo, managing director of consulting firm Vietnam Franchises Ltd.
The price Vietnam is paying for prosperity is rising rates of diabetes and obesity. In Ho Chi Minh City, nearly 10 percent of children are overweight, according to state media.
Hong Diep, a 33-year-old mother of two who had taken her children to the McDonald’s opening, said she only let her son and daughter eat burgers and fries as a treat.
“I know it’s not healthy,” she said. “In terms of nutrition, no food can compare to the Vietnamese dishes I cook at home.”
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