VietNamNet Bridge – In the real estate market which seems to be quiet, there is a boisterous fighting among food and beverage (F&B) chains to obtain advantageous retail premises.
In the documents prepared for exporters, the New Zealand Trade and Enterprise Organization showed the “golden advantages” of the Vietnamese market – the high population of 80 million people and the rapid urbanization process – the factors which are the most important ones for the F&B industry development.
According to the organization, the value of the industry in 2011 was $33.7 billion, while the growth rate would be 18.9 percent per annum by 2014.
As for the food industry, in 2011-2013, the growth rate is between 3.7 and 4.3 percent per annum. Especially, fast food chains and food restaurants in general have witnessed the rapid development with the growth rate of up to 10 percent by 2015. These are considered as the golden opportunities for the well known fast food and drinks brands to come to Vietnam to do business here.
An analyst said that when considering penetrating the Vietnamese market, foreign investors would try to find out how far their rivals have gone, where the rivals would open their shops and how big the rivals’ network would be expanded.
KFC and Lotteria, for example, are trying to find out when McDonald’s would officially set foot in Vietnam and where the first shop of the giant would be located.
Meanwhile, sources have said that Starbucks is seeking a retail premises for its second shop in the area around the Notre Dame Cathedral in district 1 in HCM City.
The information about the big guys’ plans to expand their networks has made the retail premises market heat up.
Before Starbucks joined the Vietnamese market, Vietnamese Trung Nguyen Coffee had kicked off a series of shops in the central area of HCM City, the biggest commercial hub in Vietnam. However, analysts have commented that it would be not easy to compete with the giant from the US.
The representative of Viet Café, which is running The Coffee Bean & Tea Leaf (or The Bean), the company is considering another F&B franchise contract from overseas. This could be a chain of shops with service workers, which would be run together with the The Bean and Subway the company is developing now in Vietnam.
Sources said a Japanese coffee chain is also eyeing the Vietnamese market. Meanwhile, Hong Kong’s well-known Pacific Coffee, which now has franchise shops in Singapore, Malaysia, Macau and China, has nearly set one foot in Vietnam. The official presence of the coffee chain in Vietnam is believed to be announced in some days.
The “central area” strategy
There is a common thing of all the F&B chains that they all try to occupy the retail premises on advantageous positions.
The representative of Lotteria said in the past, the chain only accepted to develop the shops on large premises in the central area, but now it accepts the smaller premises on small streets.
Analysts commented that in many cases, fast food chains accept the small premises on less noisy streets just in order to increase their presence in the market.
However, the big names would never accept this. Since they target high income earners and the upper class in the society, they need the retail premises in the central area.
Both the franchisers and the Vietnamese partners are believed to be the businesses with powerful financial capability, who are willing to pay to obtain good retail premises.