In addition to the big coffee chains such as Starbucks, Milano, Trung Nguyen, Coffee Bean, Tea Leaf, etc. Vietnam now opens to receive a new gust of wind – the American brand coffee chain Dunkin ‘ Donuts . It has officially entered the market of VIETNAM with its first store on Nguyen Duc Canh (District 7, HO CHI MINH CITY.HCM), newly opened on November 22nd .
The arrival of the big coffee brands like Gloria Jeans Coffee, The Coffee Bean Tea Leaf and now Dunkin ‘ Donuts make many businesses temporarily shrink, even close, or prepare for a mighty long-term growth.
According to the analysis of Ms.Nguyen Thi Van, brand marketing expert, in charge of Gloria Jeans Coffee across the Asia-Pacific region, “up until the present moment, the foreign coffee brands in operation in Vietnam, even Starbucks are still in the pose. Their business strategy in Vietnam doesn’t intend to massively grow to get interest rates immediately, because Cappuccino and Espresso are still new in Vietnam. Moreover, with the market of population of more than 80 million people, the firm development and good profit must be in 10 years or more “. In business chains, the management cost is very heavy, so they should at least open about 10 stores in order to offset the operational costs. There are markets that require businesses to open 20-25 new stores if they want to have a healthy profit since the real estate premises are too high.
A “no interest” business in the first 5- 6 years is unavoidable. So, having set foot in Vietnam at this time is just laying the Foundation for the brands to grow in the long term, which doesn’t mean that their business strategy are failed at present.
10 years ago, Gloria Jeans Coffee came into the Indonesian market and quickly opened 15 stores. However, they also quickly closed down most of the stores and only left 2. The failure was because of the recipients who were only thinking about expanding the store systems but didn’t know about the needs, and tastes of consumers.
Gloria Jean’s Coffee could represent the failure of business coffee chain in Vietnam. On the market since 2006, until 2011 the chain’s reached 6 stores. Since then, the brand has had nothing new; they closed the “symbol” of Gloria on Dong Khoi Street. Highlands Coffee is in bad condition now and also being changed the appearance. The airline has expanded the menu and sold discount vouchers on the groupon sites for reaching more classes of customers.
A string of other franchised coffee brands that also show more ambition is The Coffee Bean & Tea Leaf. Mr. Andrew Nguyen, who brought this franchise to Vietnam, has laid out plans to open 18 stores until the end of this year. However, it’s only about four months to the end of 2013 now, The Coffee Bean Tea Leaf has had only 11 stores.
Mr. Doan ,a brand specialist, also the founder of the Passio coffee chain, claims that once Starbucks appears, the competitive pressure for The Coffee Bean and Tea Leaf & Gloria will be very huge.
Also, the management of the Trade Center complex is not really professional; projecting professions is not scientific enough. They allow anyone who want to come and sell things; the business units do not have location arrangements to complement each other but are “eating into each other”, which cause many difficulties in business.
Take Away- coffee Business types generated more attention from people, they appear in many routes in Binh Thanh, go VAP, Binh Phu district, etc. Even in sidewalks, coffee stands also serve “take-away” coffee”.
Only on Chu van An Street, Binh Thanh district there are 5-6 coffee shops with Milano Style . These ones have large room but serve in the “take-away” style. So they are very popular.
The customers they are targeting are the Office workers, employees, so the price is quite affordable, about VND 8,000-10,000. The cost of premises and staff is 0, they just need to work hard sell good coffee to attract visitors.
A plus point for the “take-away” coffee is that the cups dedicated to packaging are designed beautifully, made of good material and is quite sure and clean. They are suitable for common people for providing mobility and convenience.