Domestic fast food businesses arestruggling to gain market share from their foreign counterparts, whichhave come to dominate this high-potential market.

Foreign franchises like KFC and the Republic of Korea’s Lotteria sofar dominate this market. KFC expects to open 12 additional restaurantsthis year, raising its total nationwide to more than 80 shops.Lotteria, currently with 56 restaurants, also has plans to open twodozens more.

The fast food industry is a rapidly growing market in Vietnam, thisyear expected to generate profits of around 500 billion VND (about 28million USD), up 35-40 percent over last year.

Kinh Do, Hy Lam Mon, Duc Phat and the ABC are among the domestic firmstesting the waters in this market segment, and major supermarkets likeCo-op Mart, Maximart, Big C and Metro have also moved to set up fastfood stalls in their establishments.

Commercial baker Kinh Do has recently opened a chain of small cafes called Kinh Do Café&Bakery.

The director of Kinh Do’s business and marketing division, Nguyen DuyDang, said a combination of bakeries and coffee bars was a popular fastfood business model around the world.

The firm has since opened its first large-scale café in HCM City .

The 200sq.m. shop also serves a full menu of sandwiches, pizza, hamburgers and hot dogs.

Dang said that Kinh Do would soon open another 500sq.m Kinh Do Bakery & Café in HCM City ’s district 1.

Industry experts think domestic businesses can compete with foreignfast food restaurants not by serving western dishes but by serving foodtailored to the Vietnamese palate, including meat and seafood rolls andVietnamese-style sandwiches.

Successful Vietnamese-style fast food trademarks including Pho 24 andBanh Mi Ta. Pho 24 general director Ly Quy Trung complained, however,that renting commercial space for restaurants was still a majorchallenge for domestic fast food vendors, due to the prohibitively highrents in major shopping and urban centres./.