New race in Vietnam fast food market

(Dan Tri) - The race in the Vietnamese fast food market is bustling as Asian brands such as Jollibee and Lotteria surpass international names like KFC in market share, but they also have to be wary of new competitors that are accelerating after Covid-19.

Asian players rise

A report from Euromonitor International said that the total revenue of the fast food market (Limited-Service Restaurants, including chains and individual stores) in 2024 in Vietnam will reach VND22,392 billion, an increase of nearly 7% compared to 2023. Of which, the fried chicken segment operating under the chain model will reach VND5,577 billion, an increase of 6.5%.

The Jollibee chain from the Philippines is leading the market share with 22%, 0.5% higher than the second place, Lotteria (Korea). The third place with 13.4% market share belongs to KFC, a brand from the US that entered the Vietnamese market in 1997, the earliest among the names.

From 2020 to 2024, the rankings and market shares of the top 3 leading brands have changed continuously. If in 2020, with 15.6% market share, Jollibee ranked third in the market after KFC (18.3%) and Lotteria (23.7%), then starting from 2022, this fried chicken brand jumped to 21%, holding the number 1 position and maintaining the leading position since then.

Lotteria lost its position when its market share decreased for 2 consecutive years after that and gradually regained some part in 2023, 2024. KFC was in second place for 2 years in 2020 and then continuously declined.

Fluctuations in market share of fried chicken chains in Vietnam (Photo: Euromonitor International).

The report also pointed out that by the end of 2024, the number of Jollibee, Lotteria, and KFC stores will be 191, 246, and 185, respectively. However, according to the websites and self-published information of the brands, Jollibee has 208 stores, Lotteria 253 stores, and KFC more than 230 stores.

According to Vietdata, in 2023, Jollibee achieved record revenue of VND2,300 billion and net profit of VND62 billion. Lotteria achieved nearly VND2,000 billion in revenue to reduce losses, while KFC was at nearly VND1,830 billion but still lost VND23 billion.

International franchising expert Nguyen Phi Van assessed that there are many reasons why Asian fast food brands have surpassed long-standing international brands such as KFC or McDonald's after the pandemic. First, consumers have cut spending due to economic difficulties and have sought alternative products with lower prices.

Second, young customers like Gen Z and Gen Alpha have different demands for products, not only modern and convenient but also indigenous, combining and blending cultures to create new and unique flavors. Products must keep up with trends and spread quickly on social networks.

“Smaller, newer Asian brands are making products, launching new menus, marketing… better than international brands that require high standards, have large investments, find it difficult to reduce prices or create new flavors, and are afraid of risks,” Ms. Van assessed.

Ms. Le Hien (living in District 7, Ho Chi Minh City) said that her 12-year-old daughter loves fried chicken at Jollibee because it has a stronger flavor than some other brands and especially because there are good programs on TikTok.

Asian brands are popular with young customers (Photo: JB).

The race is heating up

The change in market share and the gap between the two top brands are not too big at the moment. Therefore, the race between the “players” in retaining consumers who are changing and demanding will be fierce.

Euromonitor International’s report assessed that Jollibee Vietnam has implemented many creative marketing campaigns that have attracted customers. Notably, the “Bee Dance Challenge” on the TikTok platform, in collaboration with celebrities, will be performed at the end of 2024.

Meanwhile, KFC has been selling on the TikTok platform with celebrity-led livestreams, introducing dishes, interacting, and offering exclusive deals such as discount combos and free delivery exclusively for viewers.

Brands entering Vietnam need to have a different approach to the new generation of customers (Photo: JB).

Ms. Phi Van said that fast food currently accounts for a very small proportion of the total revenue of the F&B market, where traditional Vietnamese dishes such as pho, vermicelli, etc. are dominating but there is no truly large, outstanding brand. Meanwhile, brands that have entered Vietnam target middle and high-income customers, accounting for about 30% of the market. The remaining 70%, low and medium-income customers, are currently targeted by domestic brands, some new brands from Taiwan, China or Korea, and are developing.

These brands follow the strategy of opening many, quickly in small cities or suburbs of Ho Chi Minh City to reduce costs of premises, personnel, and a well-priced, constantly changing menu.

“This is a competitive pressure for brands that have been in the market for a long time because they will lose middle-income customers who are having their incomes reduced and are looking for better-priced alternative products,” Ms. Van assessed.

Therefore, brands that have been in the market for 10 years or more need to pivot faster in terms of products, menus, and develop alternative dishes at good prices to attract customers to the store. And when old customers have grown up, they must have a suitable strategy to approach the next generation of customers, taking advantage of social platforms for communication, marketing, and sales.

Euromonitor recommends that in addition to applying technology and improving the shopping experience for customers as they are doing, brands need to focus on innovating their menus with "trendy" dishes, along with promotional activities and responsive marketing aimed at young consumers.

Source: https://dantri.com.vn/kinh-doanh/cuoc-dua-moi-tren-thi-truong-thuc-an-nhanh-viet-nam-20250603213002132.htm