Financial News

  • 10 February 2014, 7:24

McDonald's Opens First Restaurant In Vietnam

US fast-food giant McDonald's has opened its first restaurant in communist Vietnam nearly 40 years after the end of the war which ended in defeat for America.

The arrival of one of the most enduring symbols of US capitalism in Ho Chi Minh City - formerly known as Saigon from where American troops dramatically withdrew in 1975 - is the result of a business partnership with the son-in-law of Vietnam's powerful Prime Minister Nguyen Tan Dung.

McDonald's follows US rivals Burger King, KFC and coffee giant Starbucks into Vietnam, which have all been drawn by the country's rising affluence.

At the opening on Saturday, hundreds of people - mostly young students or families with children - queued at the McDonald's store on Dien Bien Phu street, named after the battle that ended French colonial rule in Indochina.

Tucking into a Big Mac meal,Nguyen Hoang Long said: "I like fast-food. I don't like Vietnamese food. I don't like fish sauce."

The pungent condiment made from fermented fish is used liberally in Asian cooking.

The 25-year-old, who got the taste for fast-food while studying in California, said: "McDonald's in Vietnam is seen as a high-class restaurant. In the US, it's just normal."

A Big Mac costs about $2.85 (1.74) at the Vietnamese outlet, while a bowl of traditional pho noodle soup can be bought on most street corners for around $1.50 (90p).

The higher price of a burger positions McDonald's as an aspirational dining option accessible only to the middle class, say economists.

For the first time last year, overall consumption of rice in Vietnam began to fall slowly as the country's newly-wealthy look to alternative foods, according to a 2013 World Bank report.

Critics say Vietnam's rapid economic growth - after reforms in the early 1990s opened up the country - hides increasing inequality and inefficiencies in an economy still dominated by state-owned enterprises.

But with a population of 90 million, and average per capita income of more than $1,500 (914), Sean Ngo, managing director of consulting firm Vietnam Franchises Ltd, said "Vietnam is on the radar now" for US franchises.

The price Vietnam is paying for prosperity is rising rates of diabetes and obesity, particularly in affluent urban areas like Ho Chi Minh City, where nearly 10% of children are now classed as overweight, according to state media.

Hong Diep, a 33-year-old mother-of-two who had taken her fast-food loving children to the McDonald's opening, said she only let her son and daughter eat burgers and fries as a special treat.

"I know it's not healthy," she said. "In terms of nutrition, no food can compare to the Vietnamese dishes I cook them at home."

The arrival of McDonald's marks a full circle for the fortunes of US brands in Vietnam.

Iconic brands such as Coca-Cola were available in US-allied South Vietnam until the end of the war, but the companies pulled out after the communist victory, which paved the way for the unification of the country in 1975.

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