Coffee chains boom in Vietnam
Despite stiff competition and high operation costs due to high rent, more and more coffee chains, both foreign and Vietnamese, have opened recently.
Coffee Bean & Tea Leaf, Starbucks and McCafe shops in district 1, Ho Chi Minh City, are usually crowded, especially in peak hours. The owners of the coffee chains have been trying to expand their chains.
The Coffee Bean & Tea Leaf once had difficult days in the first days in Vietnam. However, it has 13 shops in Ho Chi Minh City and two in Hanoi. A representative of the chain said the chain plans to open three new shops each year.
“The Vietnamese market is really special. You just have to open a shop and you will have customers. It is the right time for us to open more shops after five years in Vietnam,” the representative said.
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Starbucks, which arrived in Vietnam in 2013, now has 24 shops, including 18 in Ho Chi Minh City and 6 in Hanoi. Positioned as a high-end brand and targeting high-income earners, Starbucks’ drinks are always very high, between VND85,000 and VND100,000 for every cup.
PJ’s Coffee, the US coffee brand which set foot in Vietnam four months ago, said it costs about US$250,000 to open a shop in Vietnam, of which a large amount is spent on retail premises. The rent in Ho Chi Minh City is two to three times higher than in New Orleans. The drinks are expensive, at VND50,000-100,000 a cup.
Rick Yvanovich, the founder the CEO of TRG International which is the franchiser of PJ’s Coffee, said Vietnam is the first destination of the brand, because the Vietnamese market has great potential despite stiff competition.
Two shops bearing the brand have been opened in the last four months, while the CEO said there would be 10 shops in Vietnam within five years.
About the departure of New York Dessert Café, the businessman said the brand had to quit because it did not make many changes. Meanwhile, PJ’s Coffee will conquer customers’ hearts with creativity.
Not only coffee chains, but giants in the F&B sector have also jumped into the Vietnamese market. McDonald’s, after opening nine fast food shops, has launched the McCafe system.
Like McDonald’s, Tous les Jours, Paris Baguettes and Donkin’ Donuts have also been expanding the sale of drinks.
Domestic brands such as Phuc Long, Trung Nguyen and Saigon Café have also geared up to join the battle. Coffee drinkers have found that Phuc Long, Trung Nguyen shops are near Starbucks.
A representative of Phuc Long said foreign brands are not a threat to the chain, because Phuc Long targets young people with high quality and reasonable prices.
