Fast food foreign chains’ slow pace

According to Statista, McDonald's is currently the world's most valuable fast food brand in 2018 with $126 billion, far ahead of Starbucks with $44.5 billion. Another famous brand in Vietnam is Burger King, valued at $ 6.6 billion.

It is clear that the fast food industry is thriving in almost every corner of the world, valued at $651 billion, led by McDonald's, Starbucks and Burger King.

Recently, McDonald's has become a household name in many Asian countries. In Japan, after a decade, Burger King has opened 98 stores. In China, a country with nearly 1.4 billion people, McDonald's is the second largest fast food chain after KFC, according to CNBC.

But strangely, these brands seem not to do so well in Vietnam.

"Stumbling" in Vietnam

In 2014, McDonald’s the giant officially appeared in Vietnam with the first store in Ho Chi Minh City. In early December 2017, McDonald's debuted in Hanoi, located near Hoan Kiem Lake, attracting a lot of Vietnamese and foreign tourists.

At launch, McDonald's set a goal of opening hundreds of stores within 10 years but until now, the number reached only 17 overall the country and only one store in Hanoi after four years.

Burger King also showed great ambition when it poured $40 million into the Vietnamese market in 2012, wishing to develop a chain of 60 stores in prime locations and spread across other provinces by 2016. However, by now, Burger King has only 13 stores in Vietnam.

Struggling with street food

One of the reasons why fast food chains do not grow as strongly as expected in Vietnam is that they are not "fast" enough.

In Western countries, for example, people like to buy burgers at fast-food outlets because they can eat on the streets or between classes. However, in Vietnam - a famous food paradise to international tourists, finding “fast food” is much easier and quicker. Street food has long been an indispensable part of the Vietnamese.

Besides, price is also a factor that drives many Vietnamese diners away from fast food brands. Compared to other competitors in the fast food industry, on average, most of McDonald's products have higher prices. This brand also has the lowest discounted combo compared to KFC, Lotteria and Jolibee, according to Q&Me Vietnam Market Research.

According to statistics from the European Commission reported by CNBC, food accounted for a significant share of the Vietnamese incomes, of which 78 per cent was for street food and only 1 per cent was for fast food.

Compared to normal meals, a meal at McDonald's or Burger King can be double or even triple as expensive as food at street vendors or local restaurants. McDonald's menu has shown the shift to match the demands of the Vietnamese market. It is the price that troubles consumers.

Lien, a customer to McDonald's on a weekend evening near the Old Quarter of Hanoi, said, "I took my two children to the Walking Street, so we have dinner here, but the portions are a bit small to adults like me, and with the same amount of money, we can eat a lot of other dishes at the Old Quarter.