- High demand for experience-driven dining
- Novel Food Experiences Driven by Social Media
- Attractive cost structure in comparison to Singapore (rent and labor costs)
- Vietnamese consumers seek new flavors
- Vietnam’s craft beer success- introducing new flavors to a once traditional market.
- What does the future hold?
Vietnam is home to one of Asia’s most appealing and thriving food and beverage (F&B) industries. According to a study by BMI (Euromonitor), Vietnam was recognized as one of the most promising food-and-beverage markets in the world in 2019 (ranking 10th in Asia). However, Vietnam is still considered a lower-income country despite its rapid development, leaving plenty of opportunities available for the expansion of F&B brands from other countries. Singaporean F&B brands have an especially valuable opportunity considering the common food cultures shared between the two nations, including Street food dining, sharing food and experience-driven dining.
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This article covers compelling reasons why Singaporean F&B brands should consider Vietnam in their expansion plans.
High demand for experience-driven dining
Vietnamese consumers, especially members of the younger middle-class are very likely to spend money on what is now termed as “experience-driven” dining. That allows them to take plenty of photos and videos of their experiences to be shared on social media. This is especially true of a population with a high density of smartphone and social media users. Sharing food photos, and most importantly, the experiences involving new types of food is all the rage, especially in Vietnam’s more international cities like Ho Chi Minh City, Danang, and Hanoi. One such example is Hai Di Lao. The Chinese hotpot franchise took the country by storm, with long lines of people waiting for a seat, now a normal appearance in Vietnam’s malls, where the chain tends to open new spots. Since making its debut in 2018, the company has opened 12 restaurants across the country. What experiences are Ha Di Lao known for? Actually, Hai Di Lao is more known for the experiences which delight the customers than the food itself. These are examples of what you would expect as an Hai Di Lao Customer while waiting and when already sitting down at the time:
- Free Pedicures
- Free snacks
- Friendly Services
- The Signature “Kung Fu Noodles” where a chef will come out and whip the dough about in full performance.
Young Vietnamese spend hours upon hours on social media. According to a recent study In Vietnam, people under the age of 26 spend more than seven hours every day using mobile apps. These apps include Facebook, Instagram, Zalo, Tik Tok, and more. Food experiences are some of the top recorded via social media instigating the feeling of FOMO (fear of missing out). A new food concept that not only introduces a new type of cuisine to the country but also an extravagant experience that goes along that food experience will drive brand awareness automatically.
Attractive cost structure in comparison to Singapore (rent and labor costs)
Everything from operating costs, labor costs, and rent prices are significantly lower in Vietnam. Blue-collar salaries in the financial hub of Ho Chi Minh City (Saigon) start at 4,940,000 VND (292.45 SGD) which is 1/10th of that of the average Singaporean wage. The cost of renting, construction, and interior decorating of the area of your physical location are equally cheaper, across the board. Sourcing food ingredients is also economical with Vietnam still being a predominantly agricultural economy, with a big movement towards organic and tech-based farming solutions. And thanks to tech-driven ingredient-sourcing startups suck as Kamereo, these farms are more and more accessible to restaurant owners.
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Vietnamese consumers seek new flavors
Experience comes in two plates, one, previously mentioned can be more entertaining experiences that come as a side note to the food, such as Hai Di Lao’s pedicures and the Kung Fu Noodle performer. However, the diversity of food and new food experiences is also a trend becoming ever popular as well as shareable on social media. Ho Chi Minh City especially, in its role as Vietnam’s economic engine, has become one of the most cosmopolitan cities in Southeast Asia, with ex-pats from all around the world coming to find jobs in the booming service and tech industry. Riding on this success is a very vibrant F&B industry, where you can find increasing options for cuisine hailing from all parts of the globe as well as popular fusion concepts coming from new western-trained chefs.
Vietnam’s craft beer success- introducing new flavors to a once traditional market.
The Craft beer industry has also exploded in Vietnam, thanks to the Vietnamese high propensity to drink beer. Up to the early 2000s, Vietnamese only drank their traditional light laggers. That is, until November 2014, when Pasteur street Brewing opened up introducing Vietnamese craft beer to the market. It took a while to get Vietnamese consumers to switch from the light lagers and “Bia Hoi” that they had been drinking their whole lives to these new hoppy, bitter, fruity, sour, dark, and malty beers, however, since then Vietnamese beer drinkers have become more & more open to the variety and flavors and the industry has experienced remarkable success, with various microbreweries popping up in all three of Vietnam’s largest cities.
What does the future hold?
By 2030, Vietnam is expected to have around 17 million middle-class families and is predicted to be Southeast Asia’s third-largest urban market in consumer numbers and fifth-largest in terms of overall expenditure. Such statistics indicate that in terms of timing, now is the time for F&B brands to expand to this hungry young market.