Bringing fat profits, bubble tea is a gold mine for investors

Bubble tea has become so popular in Vietnam that some analysts say that it may become as popular to Vietnamese as coffee in the future.

Ngo Duc Ke and Nguyen Hue streets in district 1, HCMC, attract many visitors thanks to a high number of bubble tea shops. The major customers of the shops are school and university students, youth and office workers. The men in Grab Food and FastGo uniforms are also usually seen at the shops. They buy bubble tea and deliver to customers who order the fashionable drink.

Bringing fat profits, bubble tea is a gold mine for investors

The ‘bubble tea rush’ began two years ago, when bubble tea brands from Hong Kong, Taiwan, Japan, Thailand and Singapore opened shops.

At that time, some analysts predicted that the ‘bubble tea movement’ would have a setback. However, that has not occurred. Bubble tea shops have mushroomed. Dingtea, Koi, Royal Tea, Gong Cha and Toco Toco are the best known brands. Vietnamese brands such as Chevi, Bobapop have also squeezed into the market.

Bubble tea has become so attractive that it appears on the menus of nearly all cafes and restaurants.

Coffee chains now also sell bubble tea. Highlands Coffee, for example, sells bubble tea made of Japanese materials. Coffee House has shifted some of its coffee shops to bubble tea shops. Phuc Long is reaping big fruit with bubble tea sales. Even KFC has introduced its own bubble tea brand, and soft drink manufacturers are considering producing bottled bubble tea.

According to Euromonitor, Vietnam’s bubble tea market has grown by 20 percent per annum, with value reaching $300 million two years ago.

According to Euromonitor, Vietnam’s bubble tea market has grown by 20 percent per annum, with value reaching $300 million two years ago.

The survey of another market analysis firm found that in Vietnam, bubble tea ranks second with 23 percent of surveyed people saying so. Most of them were women (53 percent) and young people aged 15-22 (35 percent).

 

There are about 1,500 bubble tea shops across the country. The sales have expanded: not only teenagers, but middle-aged people also like bubble tea. Office workers said they order bubble tea at least once a week.

According to Vo Van Quang, a branding expert, most bubble tea chains in HCMC are franchisees. With the selling prices of VND30,000-80,000 per glass, bubble tea can bring ‘super profits’.

“The profits from bubble tea are not lower than coffee, though coffee is believed to be the most popular drink for Vietnamese,” he said. It is partially because of the lower investment rate for bubble tea shops.

Meanwhile, Dao Xuan Khuong, a consultant in distribution and retail, believes that bubble tea may become as popular as coffee.

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