MARKET ANALYSIS FOR FAST FOOD CHAIN MARKET IN CAMBODIA, LAOS, MYANMAR AND VIETNAM

September 2014

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Fast-food industry is developing it’s presence in the last marketing frontier in ASEAN which include Cambodia, Laos, Myanmar and Vietnam (CLMV)

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During the past 10 years, we have seen not only the global players made their entrance into CLMV market but also Asian’s fast food chain stores are now within the race to strive for first mover advantage

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MARKET POTENTIAL

MARKET GROWTH

PURCHASING POWER

URBANISATIONLIFESTYLE

AVAILABILITY OF RAW FOOD SUPPLY

COMPETITION

EASE OF DOING BUSINESS

CLMV markets are attractive as the hot-spots for fast-food chain stores to grow their market share for ASEAN market. To choose what most attractive market among CLMV we take the following factors into consideration;

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MARKET POTENTIAL

5

Population of targeted age group for fast food restaurant is high for Vietnam and Myanmar

>80+75-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-1405-09

< 4

Cambodia Laos Myanmar Vietnam

Population by Age Group

Targ

et Ag

e Gro

up

(15 -

39)

15.1 mn 6.7 mn 53.2 mn 89.7 mn

6.5 MN 3.0 MN 23.3 MN 39.2 MN

Source: World Bank and Canvassco Analysis

Population

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MARKET GROWTH

6

CLMV market is expected to grow constantly

2013 2014 2015 2016 2017 2018

5.45.6 5.7 5.8 5.9 6

7.57.7 7.6 7.5

7.37

8.2

7.57.8

87.7

7.5

77.2 7.3 7.3

7.5 7.5

CambodiaLaosMyanmarVietnam

Estimated GDP Growth Rate (%)

Source: IMF and Canvassco Analysis

Total Foreign Direct Investment (USD Million) For Year 2013

8,900

2,621

2691,345

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PURCHASING POWER

7

Among the CLMV market, Vietnam has the highest purchasing power

http://www.publicdomainpictures.net/view-image.php?image=13249&picture=coin-graphSource: World Bank, IMF, CP Thailand and Canvassco Analysis

Vietnam - 1,911

Laos - 1,646

Myanmar - 1,177

Cambodia - 1,008

GDP Per Capita (For Year 2013) Current USD

Thailand GDP Per Capita was: - USD 5,779 in 2013 - USD 2,849 in 1995 - USD 1,933 in 1992 - USD 1,508 in 1990 - USD 1,122 in 1988 !

Today fast food industry in Thailand is worth about USD 700 million, if CLMV market follow similar trend to Thailand, their fast food market would be approximately within the range of USD 300 - 500 !

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The hotspot for retail and fast food store for Cambodia is Phnom Pehn, and Laos is still focused in the capital city, Ventiane. The urbanization of Vietnam is scattered from Ho chi Minh city to Hanoi(Captial); Haiphong, and Danang. For Myanmar; the economic cities are Rangoon and Mandalay.

URBANISATION

8

% of Urban Population

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LIFESTYLE - LAOS

9

Modernizing lifestyle is coming to LAOs

No Purchase 2%

Dinner 17%

Lunch 55%

Breakfast 26%

Daily Purchased Meal Unit: Percentage

Average Cost Per Meal Unit: Percentage

>THB 120

THB 100 - 120

THB 80 - 100

THB 60 - 80

THB 40 - 60

<THB 60

Source: C ASEAN 2014, Esaan Center for Business and Economic Research

Leisure Activities After School/Work (Unit: Percentage)

3%13%

19%

65%

Movies, dining, shoppingSpecial classes, OverworkSport and MusicOthers

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LIFESTYLE - MYANMAR

10

Only 17% of consumers are eating out everyday

Source: CLMV Pulse Consumer Behaviour, Lifestyle & Attitude, Esaan Center for Business and Economic Research and Canvassco Analysis

Eating out monthly

Eating out 1 - 2 times a week

Eating out everyday

Eating out more than a month

Never

HOW OFTEN BURMESE PEOPLE GO EATING OUT?

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LIFESTYLE - VIETNAM

11

40% of consumers are eating out everyday

Source: CLMV Pulse Consumer Behaviour, Lifestyle & Attitude, Esaan Center for Business and Economic Research and Canvassco Analysis

Eating out everyday

Eating out weekly

Eating out monthly

Eating out more than a month

Never

HOW OFTEN VIETNAMESE PEOPLE GO EATING OUT?

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AVAILABILITY OF RAW FOOD SUPPLY

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Myanmar are Vietnam have the highest raw food supply among the four countries

Cambodia (2014f)

Laos (Est. 2010)

Myanmar (2010 - 2011)

Vietnam (2010)

Poultry meat production (tons) 26,697 20,567 976,419 746,900

Pork meat production (tons) 120,942 39,720 569,434 3,217,900

Buffalo & Cattle meat production (tons) 80,752 68,063 227,869 370,800

Source: General Statistics Office of Vietnam, Department of Animal Production and Health Cambodia, Myanmar Livestock Federation, FAO and Canvassco Analysis

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EASE OF DOING BUSINESS

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Currently, Vietnam leads other countries in terms of ease of doing business factor (99) ; followed by Cambodia (137) and Laos (159); leaving Myanmar the hardest place to do the business (182). !This is due to the fact that Myanmar has just opened its door to business after facing political uncertainty for several decades.

Ease of Doing Business Ranking

137th 159th 182th 99th

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COMPETITION

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Vietnam has the highest number of competitors in the market

Vietnam Cambodia Myanmar Laos VIETNAM Key players in Vietnam are 1) KFC (137 outlets) 2) Lotteria; the Korean brand(86 outlets) 3) Jollibee; the Filipino brand (39 outlets). !CAMBODIA Key leaders are Lucky burger and KFC with the equal total number of outlets of 13 outlets each. The penetration from new investors are quite slow, a few players enter in the industry, Burger king with 3 outlets; Master Grill offering grilled chicken having total of four outlets, Pizza Company with ten outlets, and four outlets of BBQ Chicken a leading South Korean fast food chain. !LAOS There is a silent movement of fast food chain store in Laos as only The Pizza Company entered Laos in 2012 with 1 outlet and another 1 outlet of Swensen in the year later. !MYANMAR A first mover in Myanmar, Lotteria plans to open 24 more branches by the end of 2016 after it established its first store in early 2013. They partnered with “MYKO (Myanmar – Korea)” to serve as a master franchise in Korea. BBQ Chicken plans to open 10 fast food restaurants by the end of 2014 through a signed agreement with Myanmar Culinary Holdings Co., Ltd.

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MARKET ATTRACTIVENESS

15

Vietnam is the most attractive market for CLMV market entry

Ranking score for CLMV market based on qualitative and quantitative information

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CONTACT US FOR MORE INFORMATION

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Let’s us know if need consultation on market prioritisation project

Tel. +662 627 3081 email: contact@canvassco.com