The undercurrent in the sweets market

As a pioneer in bringing chocolate-coated pies into Vietnam, and the best known brand with 60% of market share, Orion Vina ignited the great chocopie war.

With a localization strategy, Orion Vina has created a product suited to the Vietnamese taste.

In 2003, Pham Nguyen Food Processing and Confectionary spent $2 million to import a 10 ton/day production line from South Korea and began making similar chocolate-coated pies, called Choco P&N and Phaner Pie. 

Empowered with the US$9.3 million investment from Japanese Mizuho ASEAN Investment LP, Pham Nguyen has geared up for the chocopie competition. It has opened a third factory in Hung Yen province after factories in Long An and HCMC.

While Orion targets children and those who buy Chocopie for gifts, Pham Nguyen sells pies targets women and children. The weight of Pham Nguyen’s pie is smaller than that of the rival (18 gr vs 30 gr), while the manufacturer tries to minimize the costs for packaging design.

Bibica, when developing its strategic products, also focuses on pies. In April 2017, Bibica marketed Mini Pie Orienko to compete with the big rivals. The 18 gr pie, with no preservatives and more chocolate, has a competitive price of VND30,000 per 264 gr box. 

With the capacity of 20 tons per day, Mini Pie Orienko is expected to bring revenue of VND200 billion, accounting for 13 percent of its total revenue.

Bakery chains

Since retail premise rent has been escalating and the competition in the market is getting stiff, bakery chains, including Duc Phat, ABC, Hy Lam Mon, Givral, Tous les Jours, Paris Baguette and Bread Talk are becoming more cautious about expanding their networks. 

Some years ago, bakery brands, when joining the market, all stated that they would enlarge their networks quickly. However, the market has become saturated. Some brands even have had to close some of their shops as they cannot afford the high rent.

In 2013, besides the 7 Hy Lam Mon bakery shops, Luu Ai Nhi, CEO of Hy Lam Mon, opened two Lamour Bakery & Cafés, targeting medium- and high-income earners.

There is no official report about the cafes’ revenue, but observers said with the current number of clients and retail rent, the business performance is not that good. It is estimated that the retail rent in central business districts eat up 50-60% of its profit.