Seeing good prospect to gain the market share via VND trillions of monthly spending on street food, local food brands like Vissan, Saigon Food, and Ba Huan have entered the segment with dozens of traditional street food dishes, including banh trang tron (mixed paper cake), fried pig skin, and others.
According to the latest data which local market research company Decision La provided VIR, local young people spend an average of VND13 trillion (US$565 million) per month on street food. In addition, market research company Euromonitor stated that as of the end of 2016, there were 149,000 food kiosks in the country with the revenue of VND46.9 trillion (US$2 billion) per year.
Despite good market prospects, the local street food segment is dominated by street food vendors and kiosks, while larger businesses cannot conquer a significant market share.
The problem is that street food has been long ignored by brands until now and brand names mean little in the segment. This also creates challenges for businesses planning to join the segment.
Discussing the issue with VIR, Nguyen Phi Van, founder of Retail & Franchise Asia and World Franchise Associates in Southeast Asia, said that street food is a very promising segment. However, with the current business models of startup firms and small- and medium-sized enterprises (SMEs), developing professional sales chains and brands is challenging. Therefore, they need to co-operate with big firms to build value and retail chains.
“In developed countries, local food brands account for 70-80% of the total. However, in Vietnam, the rate is contrary, with 80-90% of cuisine brands belonging to foreign firms,” Van added.
According to Nielsen, food producers keep offering new products on the market. Specifically, there were more than 2,000 street food dishes offered on the market in 2017, but only 15% succeeded according to expectations.
In addition, the problem of food safety is also a big concern for local people. Accordingly, 37% of local people are interested in health, 80% are concerned about the long-term effects caused by food additives, and 76% want to learn about the ingredients in their food. Thus, consumers seem ready to adjust spending behaviour towards more healthy street food options.
“Once food producers can build up an image of “healthy” street food products, they will win the market,” said Nguyen Anh Dung, director of Nielsen Vietnam’s Retail Measuring Service Department.