Tycoon brings McDonald's to Vietnam after 10 year crusade
Fast food businessman Henry Nguyen spent 10 years campaigning to bring McDonald's to Vietnam, but his timing may be questionable
Tycoon Henry Nguyen mopped floors, flipped burgers and even cleaned toilets over a 10-year campaign to convince McDonald's to let him bring Big Macs and Happy Meals to communist Vietnam.
McDonald's is making a late entry into this market, where Yum Brands already has dozens of Pizza Hut and KFC outlets and Burger King has 15 restaurants.
Even Starbucks debuted in Ho Chi Minh City in February and opened its second branch last week.
Capitalism has taken root in a country that many Americans associate more with an unpopular war than rising wealth. The super-rich are becoming household names in Vietnam, which showcased its first billionaire in June on the cover of its inaugural edition of Forbes magazine.
Nguyen, a Vietnamese-American who set up Pizza Hut in Vietnam six years ago, says he has lived and breathed McDonald's. He studied its business model as part of his master's degree, and pursued the Vietnam franchise opportunity for a decade - even as he worked with rival Yum.
When he visited his hometown of Chicago, he would meet McDonald's executives at the company's headquarters in suburban Oak Brook, Illinois.
His campaign is finally about to come to fruition. The Golden Arches will first appear in Ho Chi Minh City in early 2014 and later in the capital Hanoi, but the expansion will be "step by step", said Nguyen, who worked at McDonald's in the US as a teenager and again this year in Singapore.
His timing looks questionable. While rivals have gained a firm foothold, McDonald's is opening just as the economy falters and consumer demand is fading. Still, the 40-year-old is convinced the local market is ripe for his McDonald's franchise.
"McDonald's showing up here shows that Vietnam is a big deal to a lot of people. It means things are happening [here] ," Nguyen said.
He is the son-in-law of Nguyen Tan Dung, Vietnam's prime minister since 2006, but insists that isn't why he won the McDonald's franchise deal.
McDonald's spokeswoman Becca Hary confirmed that Nguyen had been discussing the franchise for many years, and said he made the shortlist out of a much larger group.
"His marriage did not preclude him from participating in what was a very competitive selection process for our partner in Vietnam," she said, adding that the company's research into a new market can span years.
Vietnam recorded 4.9 and 5 per cent economic growth, respectively, in the first two quarters of 2013, lacklustre for a developing Asian market, putting it on track for its slowest annual expansion in 14 years.
Debt-laden banks are struggling to lend and at least 120,000 businesses have closed since 2011, official data shows. Retail sales growth was 11.8 per cent in the first quarter, the slowest since 2005, and 2012's annual increase of 15.7 per cent was just half the rate recorded two years earlier.
In advanced markets, McDonald's tends to do well when the economy weakens because cash-strapped consumers trade down to cheaper food. But in developing economies, Western fast food has cachet and is often priced out of the reach of the masses.