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McDonald’s to bring Big Mac to Vietnam

Jeremy Grant
Tuesday, 16 Jul 2013 | 12:36 AM ET
Photo: Getty Images

Vietnam is finally set to get its first taste of the Big Mac after US burger chain McDonald's said it would open its first outlet in the communist-run country early next year.

The Illinois-based company said it had appointed a Vietnamese businessman, Henry Nguyen, an overseas Vietnamese who returned to the country a decade ago, as "developmental licensee" to "build the [McDonald's] brand" in the country.

The first outlet would be in Ho Chi Minh City, the commercial hub. McDonald's said the menu would include the Big Mac sandwich, cheeseburgers and fries.

(Read More: Consumer caution takes a bite out of McDonald's sales)

The move, which makes Vietnam the 38th Asian country in which McDonald's operates, highlights how the country is fast becoming one of the most attractive consumer markets in southeast Asia, even as its economy is among the worst performing.

In February, Starbucks, the US coffee chain, opened its first outlet, also in Ho Chi Minh City, increasing its presence across Asia to 12 countries.

(Read More: Starbucks to open first outlet in Vietnam in early February)

Other US chains already in Vietnam include Subway and Yum! Brands' KFC and Pizza Hut. Jollibee, the largest fast food group in the Philippines, is expanding in Vietnam through a joint venture with the owner of Highlands Coffee, Vietnam's leading upmarket coffee shop chain.

The entry of McDonald's also marks the arrival of arguably the most iconic of US food brands decades after the end of the Vietnam war.

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US food and drinks products were popular in the former South Vietnam until the war ended with communist victory in 1975, forcing companies like Coca-Cola to abandon the market.

Coca-Cola and rival Pepsi re-established themselves in the mid 1990s. McDonald's never had a presence in South Vietnam.

The company first looked at Vietnam over a decade ago, but lack of a domestic source of beef cattle and poor supply chain infrastructure meant the market was not suitable.

(Read More: Market pays greater premium for Yum! than McDonalds)

The company's strong association with US culture also caused problems. In the mid-1990s, the people's committee of the city of Hanoi, the Vietnamese capital, briefly banned McDonald's from the city.

The contract with Mr Nguyen, who once flipped burgers at a McDonald's outlet while a student in the US, was the result of a "rigorous" selection process that began years ago, the company said.

(Read More: Vietnam—Asia's top performing stock market—Set for further gains)

"As we grow our presence in the Asia region, we are looking for partners with a blend of strong business acumen and a unique understanding of our brand," said Dave Hoffmann, president of McDonald's Asia Pacific.

"Henry Nguyen is that ideal business partner who has an impressive business background and proven record in driving new business ventures in Vietnam."

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