One milk tea shop opens every four days in Vietnam. According to Euromonitor, the Vietnamese milk tea market is valued at US$282 million and has had an annual growth rate of 20%.
The milk tea boom was fueled by attractive profit margins and increasingly high demand.
“It takes from six months to one year to take back the investment capital if you develop a milk tea shop,” said Bui Tuan Anh, managing director of Taco.
“Older people choose cafes, while younger people tend to meet each other at milk tea shops,” an F&B expert said.
According to iPos, which provides management software and prints labels for F&B brands, in 2017 urban areas in the north saw more than 170 milk tea brands.
Dingtea is the largest milk tea chain in Hanoi with 80 shops in the city and 200 throughout the country, followed by Tocotoco with 66 shops in Hanoi and 124 in Vietnam.
In HCM City, the leading positions belong to Hot & Cold, Hoa Huong Duong and Phuc Long.
Lozi, a food app provider, in mid-2017 released the results of its survey on the milk tea market, showing that there were 1,500 milk tea shops across the country, while eight shops opened more every month in Hanoi in the first half of 2017.
According to Q&Me, the five most popular milk tea brands include Hot&Cold, Hoa Huong Duong, Phuc Long, Gong Cha and Tien Huong.
The popularity of the brands is believed to be due to prices of VND25,000-30,000 per glass.
Despite the mushrooming of milk tea shops, analysts believe the market is large enough for latecomers.
According to Lozi, 53% of polled consumers said they drink milk tea once a week. And 52% said they would pay over VND40,000 for a glass of milk tea.
Kengo Kurokawa, CEO of Q&Me, said that he still can see big opportunities in the market and now is the right time to join the market. He compared the competition in Vietnam with Thailand and Singapore markets.
Son Anh Dai, the owner of Like, said profit per glass is very high for large chains.
“I think strong brands such as Gong Cha and Koi The can make a profit of 60-70% for each glass of milk tea priced at VND50,000-60,000.”