Vietnam is one of the most influential marketplaces in Asia. It has a comprehensive market for industrial goods and a thriving domestic marketplace for consumer goods. With a massive demand of above 95 million people with its accelerated GDP growth of 6.7 percent in 2015, surpassing the world’s standard, it continues to be a one-stop destination for business when it comes to for Vietnam procurement exporters.
As per PricewaterhouseCoopers reports, Vietnam can develop up to 10 percent every year, turning out to be the fastest-growing economy by 2025, where its economy scale is expected to reach 70 percent of the extent of the UK market by 2050. The rising victory of the Vietnam marketplace not just shows the constant progress done in the last few years but also offers the possibility of an inspiring future.
Food And Beverage In Vietnam – Key Facts
There are several distinct segments in out-of-home consumption concerning food and beverage: the two principal sections – full-service restaurants and quick-service restaurants. Full-service restaurants resemble a further conventional sit-down eatery (either casual or elegant) whereas the other corresponds to take away coffee and fast food. These two sections estimate for 72% (36% each) from the overall out-of-home consumption business. The rest of the business share is divided between convenience stores, street food (11%), bars and clubs (1%), canteens and hotel venues.
Average Out-Of-Home Consumption Spending In Vietnam
A Vietnamese consumer’s average spending on food and drinks depends on the location of the consumer. On average, an ordinary Vietnamese customer spends 470,000 VND per month on out-of-home consumption. However, there are various disparities as per the cities.
Standard per-person basket quantity purchases concerning three of the biggest cities in Vietnam:
- Hanoi: 80,000 VND
- Ho Chi Minh City: 70,000 VND
- Da Nang: 65,000 VND
Standard per-person basket quantity purchases concerning per section within out-of-home consumption:
- Fine Dining (full-service restaurant): 265,000 VND
- Hotel: 216,000 VND
- Bar/Club: 193,000 VND
- Fast Casual (full-service restaurant): 84,000 VND
- Quick Service: 72,000 VND
- Convenience Store: 50,000 VND
- Canteen: 40,000 VND
- Street Food: 35,000 VND
When it comes to the street food section, it is one of the most affordable and budget-friendly options. Furthermore, Vietnam is popular for its street food, fast food, cheese. As Vietnam stands the fourth most attractive destination in Asia with over 10,013,000 visitants in 2016, the developing tourism industry contributes towards the desire for western-style food items like seafood, cheese, beef, wine, and seasonings.
Critical Success Factors In Vietnam
The most significant factor in availability is the location. Vietnam stands in a very strategic place when it comes to international business. Its vicinity to the Asia-Pacific region makes it act as a gateway to the inland markets of Cambodia and Laos. Rising numbers of UK businesses are following renowned brands like Karen Millen, HSBC, Chartered, and Oasis into the market.
Moreover, it additionally opens out to the active marketplaces by the South China Sea like the Philippines, Indonesia and Malaysia. Based on the kind of meals the restaurant provides, the location should be in a region that is approachable by the target market. When it comes to Western food, it’s apparent that the most suitable place for business is District 1. Although, other than the area, some locations will provide access to the targeted clientele.
Convenience and accessibility, furthermore, spans to deliveries that are capturing the more significant share of the marketplace. With online delivery proliferating, it counts for half of the food deliveries in Vietnam. Therefore, it can be considered as an influential factor for success.
The EU-Vietnam Business Network (EVBN) in collaboration with the Enterprise Europe Network desk at LCCI, has established a business trade mission to Vietnam. The business purpose to Hanoi and Ho Chi Minh City will support UK companies instructing to access the Vietnamese business to communicate with local businesses, as well as existing European corporations functioning in the industry. The referral and introduction to EVBN will assist the participants in attaining a more customised experience, with their business plans.
By 2020, the country demands to attain the goal of income per capita of 15,000,000 VND. The yearly growth valuation will be around 6%. Food and beverage expenditure is required to maintain a good pace with this progress.
Vietnam sourcing organisations benefit a lot from international cooperations as they are the segments of the WHO and ASEAN. They have open trade alliances with China, India, South Korea, Australia, Japan and New Zealand. The cheaper taxes due to business liberalisation under ASEAN and additional bilateral agreements connect with the growing population by an average age of 27 to endeavour further possibilities.
Furthermore, the Vietnamese administration officials need this segment to thrive as they can. The government has been continually seeking free trade deals with several countries and provincial groups like the Chile-Viet Nam Free Trade Agreement, Japan-Viet Nam Economic Partnership Agreement, ASEAN Free Trade Area, and the Viet Nam-European Union Free Trade Agreement.
The food and beverage industry of Vietnam presently estimates 37 percent of its GDP. Moreover, it is one of the upcoming players in the marketplace. The steady business growth and the evolution of a financially well-off client group have brought a revolution in consumption habits and directed to the rise of local food practices.
Presently, there are 130 shopping centres, 750 supermarkets and 9,000 established markets in the nation. Additionally, the yearly production of wine, beer and spirits, including non-alcoholic beverages, will soar to 4.25 billion litres, 360 million litres, and 9.2 billion litres by 2020.
The consumers of Vietnam are moving towards the consumption of beverages with higher value, building gaps to use the high-end beverage segments. Although both national and global players have endeavoured to react to this change, overseas businesses are enjoying the edge as Vietnamese customers are favouring foreign brands.