Business urged to look to growing Vietnam for opportunity

Restaurants, spas and car-care services in particular can expect a warm welcome from the Vietnamese.

Pranita Kurdpikul, a senior trade officer in the department's Service Trade Promotion Office, yesterday said the DEP had organised seminars and workshops to educate Thai businessmen about the Vietnamese market.

An upcoming exhibition called Franchising Vietnam 2009, to be held from October 1-3, will allow Thai businessmen and franchise-owners to meet with potential Vietnamese partners, said Pranita.

Spa operators should seek strategic hotel partners instead of setting up shop on their own, she said. Thai restaurants have an excellent opportunity in the country, and car-care service providers could also tap the Vietnamese.

Pranita said the Coca Restaurant Group had already enjoyed success in the Vietnamese market, with four branches.

S&P Restaurants is preparing to enter Vietnam this year.

Thai businesses should move quickly into Vietnam before those of other countries move in first, Pranita said, adding that the Vietnamese economy was among the most rapidly growing in Southeast Asia.

"We've seen Thai franchises in Vietnam achieve revenue of Bt10 million a year," she said.

However, the DEP recommends Thai franchise operators have a strong brand to offer before entering that market.

Thai Franchise Association president Chirayuppong Suksomhatai backed the DEP's call, saying restaurants and spas in particular could expect to see growth opportunities in Vietnam. Both types of business are well known internationally.

He said the first step towards success for Thai franchises was preparing an investment budget and business platform and studying Vietnam's franchise laws and regulations.

Trevor MacKenzie, global-development director for the Coca Restaurant Group, said Coca had both restaurant and express franchises in Vietnam, tapping all classes of consumers.

He said Coca decided to enter Vietnam because it was a new emerging market, was close to Thailand and had similar trends, such as eating habits and good income.

"Coca Restaurants have received good feedback, because eating hotpot is part of Vietnamese culture. They say they want good value for money and new experiences and are willing to pay for them," MacKenzie said.

He said Thai franchises expected to see even more opportunity in the future, because 2 million Vietnamese living abroad were expected to return to help develop the country. They belong to a younger generation that will help drive the business.

Asia Wide Franchise Consultants chairman and CEO Albert Kong said Vietnam started allowing franchises in 2005. The government enacted franchise regulations that are flexible for international investors, such as allowing full foreign ownership.

"The government knows franchises can create jobs for locals, that they can help drive its economy," he said.

He said Vietnamese held a positive view of new businesses entering the country and were willing to pay good money to patronise them. Recent research from ACNielsen shows 8 per cent of Vietnamese eat at international fast-food restaurants, because they identify with the modern lifestyle. Moreover, Vietnamese prefer to eat out one to three times a month on average.

Kong said Thai franchise-owners had to study local franchise regulations before setting up there. He said the law required foreigners wanting to invest in Vietnam operate their business for one year, after which the franchisee can open more outlets.