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The Vietnamese coffee chain market: a delicious "piece of cake"?

Vietnam’s coffee and tea chain market is considered a potential market and brings many development opportunities for domestic and foreign players. With a size of about 1 billion USD, this market has attracted the participation of big players such as Highlands Coffee, Phuc Long, The Coffee House, Trung Nguyen Legend, Starbucks, and new players such as Ong Bau and Katinat. Although only entering the market in 2016, Katinat coffee chain currently has 33 (up 23 stores compared to 2021) large stores located in central locations of Ho Chi Minh City.

The market expansion rate of Highlands also increased rapidly when they had nearly 700 stores, an increase of nearly 400 stores compared to 2019. In two years 2019 and 2020, revenue of this F&B chain reached more than 2.1 trillion VND. However, by 2021, Highlands’ revenue will only reach VND 1.7 trillion (decrease 19.2% compared to 2020). Also in 2021, this F&B chain also received a loss of about 19 billion VND, although before that Highlands Coffee brought in a pre-tax profit of more than 100 millionVND in 2020. Although there is a tendency to decrease in revenue and profit before tax, Highlands Coffee still continues to hold its position as the largest coffee chain in Vietnam.

Phuc Long is a well-known brand in the tea and coffee industry. With the desire to constantly expand the market - sustainable development, Phuc Long is also urgently expanding its coffee and tea chain. From 60 stores in 2019, Phuc Long expanded to 93 stores and 981 kiosks (as of mid-July 2022). In 2020, Phuc Long ranked second only after Highlands with a revenue of nearly 800 billion VND, up 2% compared to 2019 (778.7 billion VND). However, due to the impact of the covid-19 epidemic and the increase in the expansion of the kiosk chain, the revenue of this F&B chain in 2021 will only reach nearly VND 550 billion, down more than 32% compared to 2020. And the profit before tax decreased sharply compared to 2020, only 18 billion VND.

While Phuc Long, Highlands are tending to expand their store chains, The Coffee House and Trung Nguyen Legend tend to slow down and even decrease.

Trung Nguyen Legend is a coffee brand that is no stranger to Vietnamese people, this brand is aimed at customers who love the traditional taste of Vietnamese coffee. In 2019, Trung Nguyen Legend had nearly 100 stores and now has reduced to 77 stores. In the past few years, the revenue of this brand has also decreased continuously and decreased by nearly 41% compared to 2019.

The Coffee House is also a Vietnamese coffee brand, and since its establishment, this coffee chain has positioned and considered itself as the 2nd Starbucks in Vietnam and this coffee chain has achieved great growth. However, by 2019, this brand has faced a lot of challenges from founder Nguyen Hai Ninh resigning as CEO to the impact of the Covid pandemic, revenue started to decline. In 2020, revenue reached nearly 750 billion VND and decreased to 475 billion VND in 2021. Also in 2021, the company recorded a loss before tax of nearly 250 billion VND.

Starbucks is the world's leading coffee brand, owning more than 21,000 stores around the world, including Starbucks Vietnam. In 2021, the total number of Starbucks stores in Vietnam is 77 stores and this number will continue to increase in 2022. Also in 2021, Starbucks has surpassed The Coffee House and Phuc Long to rise to No. 2. with a revenue of more than 550 billion VND. However, like The Coffee House, the revenue of this foreign coffee chain also started to decline from 2020 and recorded a loss of nearly 100 billion VND in 2021.

It can be seen that the Vietnamese tea and coffee market is a delicious “piece of cake”, but getting this piece of cake is difficult for domestic and foreign brands.



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