KFC has successfully entered Hanoi, traditionally seen as tough market for fastfood operators

It might come as a surprise to many that the pioneer of western style fastfood in Vietnam is Korean – Lotteria first served up a hamburger and fries in Ho Chi Minh City way back in 1997.

Over the last decade Lotteria’s strategy of blending local flavours with US-style fastfood has seen it expand into a chain of 30 restaurants in Ho Chi Minh City, Hanoi, Phan Thiet, Dong Nai and Vung Tau.

Hot on the heels of Lotteria, KFC arrived later that same year and now boasts 38 restaurants nationwide. Earlier this year, another fast-food giant from the same business family as KFC, Pizza Hut entered the fray by opening up two restaurants in Ho Chi Minh City’s centre.

But the mother of all fastfood operations is also on the way, yes, McDonald’s is scheduled to plant its golden arches in Vietnamese soil by the end of this year.

Vietnamese people are most definitely adventurous eaters when it comes to anything local but foreign food has a harder time winning over the Vietnamese taste buds.

So how has fastfood conquered Vietnam? Well the reasons may surprise foreign readers, who see fastfood as a quick fix and little else.

“I heard news about unsafe food on TV everyday and a lot of Vietnamese eateries look very dirty, but fast-food restaurants look clean and tidy so I trust them,” says Nguyen Ngoc Tu, a 27 year-old office worker, who picked up a taste for fastfood when studying overseas.

Another surprising draw is the service.

“The servers are nice and caring. Most of them are students, so I don’t mind as much when they make mistakes,” says Tu.

However as elsewhere the price is right for a lot of urban dwellers. Nam Huan, a university graduate in Ho Chi Minh City confesses he is a fan of Colonel Sanders finger licking recipe. He eats at KFC restaurants at least twice a week as it is cheaper than eating in other restaurants.
“Even a drink in a café might cost me around $2, so I’d rather enjoy a burger which costs the same. I can still use wireless internet for free!” says Huan.

To compete with modern style cafes, fast-food restaurants in Vietnam offer comfy seats, wireless internet and entertainment on TV. So customers can hang out rather than just eat and run.

“KFC restaurants are everywhere. There’s one near my house and one right by my office. While eating my burger and drinking my Pepsi, I can check my emails and chat with friends without having to worry about annoying the waitress. It only sets me back VND50,000 ($3.1),” says Huan.
As in the west fastfood restaurants try to lure families by offering playgrounds and toys.

Jenny Ho, a mother of two boys, aged seven and three years old, claims one of her kids is at friends’ birthday party at KFC or Lotteria every weekend.

“The kids know the menu even better than I do. I guess the next Vietnamese generation will be really into fast-food,” she says.

So fastfood restaurants have found a healthy share of the market by serving inexpensive and hygienic food with professional service in modern surroundings, but do Vietnamese know about the other side of fastfood?

Ask any westerner and it’s likely they’ll associate western fastfood with high calories and obesity.
Three fried chicken wings include 1,000 calories (100g fat), a hamburger with a Pepsi consists of 1,200 calories, and a small pizza with pepperoni or seafood include 1,500 calories while an average person needs only around 1,800 calories (120-150g fat) per day.

Sadly Vietnamese people’s diets before the arrival of fastfood were often extremely well-balanced and low in fat with lots of vegetables.

Of course not everyone has succumbed to the lure of fast-food.

“I don’t like fast-food because there aren’t enough vegetables,” says Thu Thao, a 22 year-old salesgirl. “I think I’d be pretty spotty if I ate too much fast-food! I know I have to eat lots of vegetables to stay healthy.”

Combining the business development concepts of fastfood restaurants with nutritious Vietnamese cuisine Pho 24 chain offers an alternative route for those not willing to take on a hamburger and fries.

“The presence of foreign fastfood brands brings consumers more options and restaurant chains like that are years ahead of us in this market, therefore they are more experienced and savvy to customers’ needs and expectations,” says Ly Quy Trung, founder of Pho 24 chain restaurants.

International global brands arrive with immense budgets for marketing, advertising, research and development. This is why KFC and Lotteria land some of the most prime locations in both Hanoi and Ho Chi Minh City.

Traditionally seen as the harder nut to crack, of Vietnam’s two major cities, Hanoi is also warming to fastfood, with two KFC restaurants and one Lotteria leading the charge.

The success of the Australian-owned chain that runs Pepperoni’s and Al frescos with winning over a loyal local consumer base has already proved that Hanoians are open to western style hamburgers and pizzas. fastfood restaurants will be able to penetrate an even larger market with cheaper prices.

So is this the point in history when Vietnamese people start to shift away from their beloved national cuisine?

“One worry, felt by many, is that these operations can will take over from traditional Vietnamese restaurants,” says Trung. “But I feel that in some ways we can also learn a lot from them in creating our own formula for success. I’m confident that Vietnamese food is delicious and can be enjoyed by not just Vietnamese, but also by diners all over the world. If we are able to manage our business well, we cannot only grow in Vietnam but also expand overseas.”

Hong Nhung

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