Following is the list of 5 fast food brands that account for the majority of market share in Vietnam. Coming out top is KFC, followed by Lotteria, Pizza Hut, Jolliee Bee, and McDonald's.
As the first fast food brand to enter the Vietnamese market, the American fast food giant quickly became popular among Vietnamese consumers. Offering products with a relatively high price, KFC is still the fried chicken brand with the largest “fanbase” in Vietnam.
KFC opened its first store in Vietnam in 1997 at the Saigon Super Bowl Trade Center. Despite facing many difficulties when the concept of "fast food" was completely foreign here, and continuously suffering losses in the first 7 years of operating, with a reasonable approach, the number of KFC restaurant in Vietnam has so far grown to more than 140, present in more than 19 major cities/provinces across the country.
Every year, KFC attracts about 20 million domestic customers, which accounts for about 60% of Vietnam's fast food market and contributes to creating jobs for more than 3,000 workers.
In 2019, KFC Vietnam Joint Venture Company Limited recorded a net revenue of 1,498 billion VND, an increase of just over 1% compared to 2018. This growth rate was much lower than the increase of 18% and 8% in 2017 and 2018 respectively.
KFC's gross profit margin in the 2016-2019 period was also low, ranging from 13-18%. However, due to the effective control of selling costs, the business still reported a profit of 78 billion VND in 2019. Profit after tax in 2017 and 2018 was 88 billion VND and 94 billion VND, respectively.
This is a Korean fast food brand that owns the recipe for fried chicken dishes that fascinate users. In spite of entering the Vietnamese market much later than KFC, thanks to the popularity of the Korean cultural wave, Lotteria fried chicken brand has developed extremely quickly. It is now the major rival of KFC in Vietnam.
Currently, Lotteria owns a chain of more than 200 restaurants in 30 provinces and cities across the country.
However, Lotteria is also facing a lot of difficulties. The high expenses for rental, equipment, labor and operation is the key problem of Lotteria Vietnam Co., Ltd. In 2018, the company operating the Lotteria brand in Vietnam still maintained a revenue of more than 1,000 billion VND/year, however, its accumulated loss reached 400 billion VND.
According to The Korea Times, in 2020, Lotteria Vietnam did not generate any profit for Lotte GRS - the restaurant business of Lotte Group.
Lotteria Vietnam's book value was determined at 26.8 billion won (553 billion VND) at the beginning of 2020, but fell to 15.6 billion won (322 billion VND) after recording a loss of 11 .2 billion won (231 billion VND). The company's net loss also exceeded 10 billion won (206 billion VND) in the latest year.
The owner of this brand was licensed to invest in Vietnam in August 2005. By December 2011, the brand had established 17 stores in Vietnam. It can be said that Pizza Hut has become quite popular among Vietnamese Pizza devotees. Currently, there are about 50 Pizza Hut restaurants located throughout Vietnam.
Pizza Hut's revenue is not comparable to that of KFC, but it is also continuously increasing. In 2016, after 10 years of presence in Vietnam, the revenue of this chain exceeded 400 billion VND.
However, in the last 5 years, Pizza Hut's growth rate slowed down as competitive pressure in the market increased. In the period 2015-2018, the revenue of this chain barely increased by more than 20% per year. In 2017-2018, the growth rate was just over 6%. It was not until 2019 that the revenue of this chain rebounded thanks to the expansion and the introduction of many new services.
The first Jollibee store opened in Vietnam in 2005. Since then, Jollibee has made every effort to bring Vietnamese families delicious meals at reasonable prices. To date, there are more than 100 Jollibee stores in Vietnam.
Jollibee is the co-owner of Highlands Coffee coffee chain with more than 300 stores in the Philippines and Vietnam, and co-owner of Pho 24 brand which is present in Vietnam, Philippines, Indonesia, Cambodia, Macau and Korea Country.
Currently, Jollibee Vietnam still has an accumulated loss of 63 billion VND, while its charter capital is only 409 billion VND. In 2019, Jollibee Vietnam Co., Ltd earned 1,118 billion VND in revenue. Its gross profit in the same period was 604 billion VND. The company suffered a loss of 10 billion VND.
As a giant brand with more than 36,000 restaurants in 119 countries worldwide, McDonald's created excitement when it announced that it would enter the Vietnamese market in 2014. However, entering Vietnam with the ambition to have 100 stores by 2022, the company currently has only 23 stores.
In 2017, the McDonald's chain management unit achieved a revenue of nearly 300 billion VND with a gross profit margin of more than 53%, equivalent to current restaurant chains. However, this company reported a loss of up to 150 billion VND because the profit from business activities could not make up for the large selling and administrative expenses. Before that, in 2016, McDonald's Vietnam also experienced a loss 115 billion VND with revenue of more than 220 billion VND.
On average, during these two years, the cost of selling and managing of McDonald's Vietnam accounted for 86-87% of total revenue, not to mention the cost of goods sold which accounted for more than 45%.
By the end of 2017, the accumulated loss of this chain after 4 years of presence in the Vietnamese market was nearly 500 billion VND, while the charter capital was only 200 billion VND.
Alice Hoang Thao - VietnamCredit
