Singapore’s NYDC closes last cafe, bids adieu to Vietnam

Thanh Nien News

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An NYDC store in Ho Chi Minh City. Photo courtesy of NYDC Vietnam's Facebook page An NYDC store in Ho Chi Minh City. Photo courtesy of NYDC Vietnam's Facebook page


Singapore-based café and restaurant chain NYDC has closed its last outlet and shut down its seven-year-old business in Vietnam after what critics said a losing battle against local chains.
NYDC has said goodbye to customers on its Facebook page after closing its store in Ho Chi Minh City’s Dong Khoi Street, its first and also highest-profile outlet.
Three others in Districts 1, 2 and 7 were closed in May. A statement from the chain cited recurring losses and high competition in the region.
Singapore conglomerate SUTL brought NYDC to Vietnam in late 2009, hoping to achieve the same success it did with KFC, of which there are now around 140 across Vietnam.
The café chain quickly became one of the most popular in the city, and the original plan was to open 20 outlets within five years at a cost of around US$6 million. But at its peak, the chain only had six outlets.
Analysts said the chain faced harsh competition from local chains such as The Coffee House, Phuc Long, Urban Station, Trung Nguyen, Kafe and Highlands, which entrenched their dominance by offering affordable prices.
Starbucks was a new, tough foreign rival.
Many foreign food chains have struggled to grow in Vietnam. Both Gloria Jeans and Coffee Bean and Tea Leaf had to close some outlets three years ago. Burger King, which entered in 2012 with plans for about 60 stores in five years, recently closed several to keep its number at only 16.
Sean T Ngo, CEO of VF Franchise Consulting, told Inside Retail that although Vietnam is one of the hottest franchising markets in Southeast Asia, the exit of NYDC once again demonstrates the challenges that foreign firms face when entering a developing market.
“Clear differentiation and positioning from competitors and near perfect execution is required if any foreign brand is to do well in this market place,” he said.

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