McDonald’s and Burger King’s failure in Vietnam

CNBC released a short video clip on McDonald’s and Burger King’s failure in Vietnam despite glowing success in other countries and particularly other Asian countries such as China and Japan. While McDonald’s and Burger King have struggled in Vietnam, Pizza Hut and KFC have managed to attain some success in the market.

The video mentioned the following as the main reasons for the failure:

• A lot of substitutes at a much cheaper price from street vendors
• Burgers don’t fit Vietnamese cuisine preference of sharing food during meals

Personally, I have lived in the US for more than two years and I can count on one hand the number of times I have been to chains such as Wendy’s, McDonald’s, Burger King or Chipotle. All of them were with friends or on our way back from trips. Burgers don’t appeal to us. We have a quite similar dish in Banh Mi, which is very delicious, quick to prepare and significantly cheaper. I lived in Danang for a year, the 3rd biggest city in Vietnam. It is half an hour of a scooter ride from Hoi An, where you can find some of the best Banh Mis in Vietnam. The price for local is about 50cents (maybe 1 dollar for foreigners), but the price at McDonald’s or Burger King’s restaurant is several times more expensive.

Banh Mi Hoi An (Credit: Hoi An Fun Bike Tours)

This is how Banh Mi is prepared and delivered, in about 1-2 minutes maximum. (Credit: Hoi An Tour Food)

I still remember the buzz when McDonald’s came to Vietnam the first time. People lined up to experience it. Nonetheless, when the hype wore off after a while, it comes down to whether McDonald’s offerings are competitive and whether they fit the culinary buds of the Vietnamese people. Apparently, they don’t. This is a failure of not understanding the end users’ preferences.

Towards the end of the clip, it was mentioned that McDonald’s is trying to localize the menus with Pho and Broken Rice. Well, I am not sure that will work because the same thing will happen. There are hundreds of street vendors whose product is so tasty and much cheaper than the well-known chain’s.