Franchise opportunities aplenty in VietnamBy Hamisah Hamid
A Burgeoning middle class, growing disposable income and two-thirds of the population under 30, who are brand-conscious, trendy and adore the Western lifestyle.
Sounds like a perfect setting to grow a chain of consumer business like franchising.
The land of opportunities, which is only a two-and-a-half-hour flight away (from Kuala Lumpur to Hanoi), is Vietnam - the third fastest-growing economy in the region, with the retail sector growing in double digits annually.
Malaysia's trade agency, consultants and franchise association are urging the local retail and franchise players to consider Vietnam as it has opened up its market further, after becoming a World Trade Organisation member on January 1 last year.
Among the "hot" sectors for franchising in Vietnam include fashion brand; health and beauty; food services; education (children, language classes, business); and childcare services.
Malaysian Franchise Association (MFA) chief executive Sofia Leong Abdullah said Vietnam is essentially an untapped market. Malaysians can easily adapt to its culture and market as both Malaysia and Vietnam are Asian countries.
"The potential for franchising is huge... the revenue of franchise business in Vietnam is expected to grow 50 per cent annually," Sofia told reporters after the Franchise Breakfast Talk in Kuala Lumpur yesterday.
The talk was organised by MFA, with cooperation from the Domestic Trade, Cooperative and Consumerism Ministry and Perbadanan Nasional Bhd.
Local franchise players are invited to take part in specialised marketing missions to Cambodia and Vietnam from October 31 to November 6 this year.
According to MFA, retail forms a quarter of the franchise sector in Vietnam, followed by beverages (20 per cent), restaurants (16 per cent), fashion (9 per cent), education (5 per cent), while the rest are other businesses.
Vietnam's Industry and Trade Ministry statistics show that only three Malaysian companies out of 51 foreign franchisors are licensed in Vietnam. About 25 companies have applied for franchise operations in sectors like catering, retailing, education, commercial services, ICT, real estate, human resource development, training, optical, pharmaceutical and automotive.
Malaysia External Trade Development Corp deputy director (services section) Roseliah Taha said consumerism culture among the 86-million Vietnam population is expanding.
Market research shows that Vietnamese eat out at foreign fast food restaurants between one to four times a month. They are also willing to pay for pricier food at these outlets, which are two to three times more than the local meal prices.
Last year, the fast food industry in Vietnam posted US$26 million (RM80.86 million) revenue, a 40 per cent jump from 2008.
"Successful franchisors concentrate on major cities with massive buying power such as Ho Chi Minh, Hanoi, Danang, Chan Tho and Hai Phong, with people eager for international concepts, products and services," she said in her talks.