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Street-food market: great potential, slow business

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An unprofessional way of doing business and bad management skills have led to problems for street food chains after short periods of operation.

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The street food market has been flourishing in the last 3-4 years


Nguyen Phi Van, a retail and franchise expert, said in 2011-2016, street food chains in Vietnam gained average growth rate of 24.1 percent per annum and 194.3 percent in total, according to Euromonitor.

Meanwhile, by the end of 2016, Vietnam had 149,000 street food sale points with total value of VND46.9 trillion and a growth rate of 2 percent per annum.

In the past, no one could imagine that the market of popular dishes such as bread, steamed rice, coffee and drinks would be so promising. 

The street food market has been flourishing in the last 3-4 years with a lot of new brands and new sale points. However, the majority left the market just after a short period.

Investors typically set up their chains to follow the crowds but don’t have long-term business strategies. Grilled sweet potato, steamed rice with banana leaf, fruit juice, milk tea and lemon tea are examples.

A survey of Euromonitor found that while Five Star Chicken brand of CP Group from Thailand had seen its market share increase rapidly from 26.7 percent to 71 percent, Vietnamese brands 1-minute 30 second stick bread in HCMC and Goethe coffee in Hanoi had not expanded since 2013.

The owners of street food brands said they found it hard to maintain the business because people’s tastes change quickly. They also don’t have experience and knowledge about building chains. If they don't succeed with the first shops, they cannot expand the chain.

In other cases, the owners had to give up because they did not have capital and a workforce to develop chains.

Banh mi Viet (Vietnamese sandwich) made its debut in 2010 and had very good development for several years. However, they began meeting difficulties in management when opening second and subsequent shops. As the business performance got worse, the management board decided to close all the shops and start from the very beginning.

“We have to rebuild the network in a professional way. The old way of doing business doesn’t work. You cannot set up a company if you just know how to cook,” said Tran Thi Bich Nga, managing director of the chain. 

Van said that street food chain is a business model which needs to operate in a professional way. She warned that if Vietnamese investors are not more professional, the domestic market may fall into foreign hands.



Source: VietNamNet