An old saying says “business is war.” If that’s the case, then McDonald’s Corporation (NYSE:MCD) has launched yet another invasion, this time into Vietnam. One of the longest countries to not have a McDonalds, Vietnam has finally caved and opened its first McDonald’s in Ho Chi Minh City.
The grand opening of Vietnams’ first 24-hour drive through was met by massive crowds lining out the door. It is estimated that some 20,000 people were served in the first two days alone and so far it appears that the Vietnamese are developing a taste for McDonald’s offerings.
Alight Capital Management declined 1.3% on a net basis for the first quarter of 2022, according to a copy of the firm's quarterly update, which ValueWalk has been able to review. Short positions offset most of the losses on the long side of the portfolio. The long/short equity fund exited the quarter with a net Read More
McDonald’s Corporation (NYSE:MCD) will be adopting a franchisee model in Vietnam and has already selected its first investor, Mr. Henry Hguyen. McDonald’s corporate office has stated that Vietnam offers a tremendous opportunity for the company but has declined to provide details or expansion plans.
McDonald’s is a global giant
McDonald’s now has over 10,000 stores across Asia, Africa, and the Middle East, and over 34,000 stores across the globe. The golden arches are one of the most recognized logos in the world and are often seen as a symbol of American culture.
Internationally, KFC is generally seen as the trailblazer. For example, KFC opened its first store in Vietnam in 1998 while McDonald’s Corporation (NYSE:MCD) is just now entering the market. Still, while KFC often takes the first shot at expansion, McDonald’s has still been extremely successful in opening new markets.
Since many cultures do not eat the same types of meat as Americans, McDonald’s must often modify its menu items. In Malaysia, Indonesia, and Middle East, for example, pork is considered a haram food so you won’t be finding bacon on any burgers or breakfast sandwiches. In India people don’t eat cows so beef burgers are not sold, while Japanese McDonalds focus more on seafood.
Vietnam an emerging regional power
Vietnam was once a part of the Chinese Kingdom but after the Battle of the Bach Dang river in 938 AD they were able to expel imperial forces. The country was then colonized by the French in the mid-nineteenth century. During and following World War II the Vietnamese were able to successfully expel the French. The independence movement was led by the Communist party which quickly drew the United States into a war, which the Vietnamese eventually won.
Following the Vietnam War, the country largely isolated itself from the West. Starting the 1990’s, however, Vietnam once again began to open its borders and integrate itself with the global economy. Now, the country could emerge as a regional economy powerhouse.
With over 90 million citizens, Vietnam is one of the largest countries in South East Asia. Vietnam’s population is known for being extremely well educated, especially for a developing country, and the country enjoys numerous cost advantages. It should come as no surprise then that Vietnam has also enjoyed growth rates in excess of 7% each year. Given this upward trajectory, Vietnam is quickly emerging as one of S.E. Asia’s preferred destinations for FDI.