VietNamNet Bridge – After fast food, it is the ice cream market now which heats up every day.

Ice cream market – the new destination for investors

In 2012, Nguyen Hieu Liem, Vice President of Anova, specializing in farm produce and real estate, decided to jump into a quite unfamiliar business field to him – making ice cream.

Liem became the President of Ngoi Sao Xanh Company and immediately opened three Baskin Robbins ice cream shops in HCM City under a franchise agreement with the US brand. The volume of ice cream sold in the first two months of 2013 was unexpectedly high, equal to the volume of cream planned for the whole year’s sale.

Especially, on Tet days (in February), the sale went so well that Ngoi Sao Xanh had to carry ice cream to HCM City by air.

Baskin Robbins ice cream hit the Hanoi market in mid-2013, kicking off the company’s plan to expand its business. The next destinations would be Binh Duong, Dong Nai, Da Nang and Can Tho.

Liem has stated that he would open 50 shops nationwide in the next five years. If the plan is implemented, Vietnam would have one more Baskin Robbins shop a month.

While the fast food market has become noisy with the presence of a lot of the world’s well-known brands in Vietnam, thus creating a “red ocean” battle, the ice cream remains very attractive with fewer competitors.

While more and more Baskin Robbins shops have been opened in Vietnam just within a short time, Haagen-Dazs, developed in Vietnam by International Lifestyles JSC, has been taking cautious steps in the domestic market.

The company has just opened the second shop after the success with the first one on Han Thuyen Street in HCM City.

Other ice creams, such as Fanny, Swensen or Bud’s have also taken the first steps to conquer the Vietnamese market.

Fanny, Swensen, Bud’s cũng bắt đầu có những bước đi táo bạo như Baskin Robbins.

High profits expected

Liem believes that Ngoi Sao Xanh would begin making profit by the end of 2013, though he did not expect profits within the first three years of operation. Baskin Robbins, the franchiser, also thinks that should only expect to reap fruits after three years of investment.

Meanwhile, the business in Vietnam was thought to be less optimistic because of the low income per capita. However, the rapid expansion of Baskin Robbins shops has proved that the theory of making profits after three years of investment is not true in Vietnam.

According to Liem, Vietnam’s income per capital remains low, but Vietnamese population is young, while Vietnamese always like new discoveries. The only thing he needs to do is to provide the products fitting Vietnamese taste.

Even Haagen-Dazs which sets up very high price of about VND100,000 per product, also believes that Vietnam is a potential market for it.

In Vietnam, a person with the monthly income of VND10 million is considered a high income earner.

Since its very first days in Vietnam, the ice cream brand has not been targeting the majority of clients, but only the high income earners who always demand high quality products.

Analysts believe that the ice cream market would be heating up more, as the import tariff on ice cream, after reducing from 75 percent to 30 percent, is expected to decrease further.

Doanh Nhan