return icon Vietnamnet.vn

Foreign café chains facing competition from local outlets

VietNamNet Bridge - While gaining success in other markets, many foreign coffee brands have had to leave the Vietnamese market.
VietNamNet Bridge - While gaining success in other markets, many foreign coffee brands have had to leave the Vietnamese market.


{keywords}




Gloria Jean’s, a well known coffee brand in Australia, has closed its last café in Vietnam, located at Grand View in the Phu My Hung Urban Area, officially terminating the business in HCMC which lasted 10 years. 

Only six shops were opened within six years. Analysts began talking about the coffee chain’s unsatisfactory business performance when it had to shut down a café on Dong Khoi street because of the high rent. The number of Gloria Jean’s cafes was cut by half by 2015.

Prior to that, NYDC (New York Dessert Café), also said goodbye to Vietnamese customers on Facebook. 

While gaining success in other markets, many foreign coffee brands have had to leave the Vietnamese market.

Singaporean SUTL in 2000 brought NYDC to Vietnam with the plan to open 20 shops within five years. However, after seven years of struggling to survive, NYDC had to close its last shop in HCMC in mid-2016.

A branding expert commented that all foreign coffee brands have to face two major problems in Vietnam – high rent and the special taste of Vietnamese. 

Nguyen Phi Van, the first person who brought Gloria Jean’s to Vietnam, admitted that one won’t be able to succeed applying the world’s models to Vietnam.

Some observers noted that in other countries, some coffee brands target the masses, while in Vietnam, they aim for high income earners. 

Positioning themselves as high-end brands, the developers have to set up shops in central business districts, with high rents.

The other problem for foreign coffee chains in Vietnam is the ‘localization’ of products. Some drinks are made with foreign formulas, but with Vietnamese materials, so they don’t have the original flavor and cannot attract foreign customers. 

Meanwhile, Vietnamese don’t like the foreign flavor and they prefer drinks at 100 percent Vietnamese owned cafes.

The high drink prices are also why many Vietnamese customers turn their back to foreign brands. 

Vietnamese coffee chains such as Passio Coffee, The Coffee House, Phuc Long, Highlands Coffee, Urban Station and Trung Nguyen offer coffee at more competitive prices. 

Many Vietnamese went to NYDC and Gloria Jean’s Coffees because they wanted to try the taste of foreign coffee. But they did not return because the prices were two or three times higher than those offered by Vietnamese cafes. 

While many foreign brands left Vietnam, others have arrived. PJ’s Coffee, for example, opened in Vietnam several months ago. It now has two shops. 


RELATED NEWS

Foreign coffee chains close, lack understanding of Vietnam’s culture

Coffee chains crushed in retail premise war


Luong Bang

MORE NEWS

Vietnam-Asia trade reaches nearly 475.3 billion USD in 2022

Vietnam’s merchandise trade with Asia reached 475.29 billion USD in 2022, increasing by 9.6% compared to 2021 and accounting for the highest proportion (65.1%) in the country's total import-export value.

Revised Law on Medical Examination and Treatment promulgated

The Presidential Office on February 3 announced the Acting President’s order to promulgate the Law on Medical Examination and Treatment that was adopted by the 15th National Assembly at its second extraordinary session.

Volatile real estate market puts pressure on business results

Volatile real estate market caused revenue and profit of realty businesses to decrease sharply in the fourth quarter of 2022.

VIETNAM NEWS HEADLINES FEBRUARY 3/2023

CNTraveler picks Con Dao one of best island vacations globally

Six businesses lose fuel distribution licenses

The Ministry of Industry and Trade has revoked the fuel distribution licenses from six local businesses, with effect on February 27.

ChatGPT and AI booms in Vietnam

AI and ChatGPT technologies are forecasted to explode, creating a new wave of technology this year.

Fruit exports to China increase sharply

The recovery of exports to China will contribute to boosting Vietnam's fruit and vegetable industry in 2023.

Former chairs, vice chairs of Thai Nguyen disciplined

Prime Minister Pham Minh Chinh has taken disciplinary measures against two former chairmen, two former vice chairmen and one vice chairman of the People’s Committee of Thai Nguyen Province.

Hotel in Da Lat fined for discriminating against foreign tourists

The People's Committee of Da Lat City in the Central Highlands province of Lam Dong on Wednesday fined Nguyen Thi Kim Thoa, director of Dream Flower Hotel Ltd. Co, for discriminating against tourists.

State Treasury to auction VND400 trillion G-bonds this year

The Vietnam State Treasury (VST) has announced a plan to auction VND400 trillion worth of government bonds on the Hanoi Stock Exchange this year.

Ministry proposes adjusting fuel prices every Thursday

According to MoIT, shorter price cycles are better at keeping domestic prices closer to the global oil prices, even during holidays (except Tet) to minimise the risk of market disruptions.

Indian journalist impressed by Ha Long Bay cruise

Aatreyee Mohanta, an Indian journalist of Telegraph India, enjoyed plenty of quintessential experiences in Vietnam as she travelled on the Aspira Cruise around Vietnam’s Ha Long Bay,

VIETNAM BUSINESS NEWS FEBRUARY 3/2023

Heavyweight shares help stop market from a fall

Communist Party of Vietnam – leader, companion of nation

On February 3, 1930, Nguyen Ai Quoc chaired a conference to merge three communist organisations in Vietnam into the Communist Party of Vietnam (CPV), marking an important milestone in the country’s history of national construction.

HCM City to open job transaction floors to facilitate businesses in recruiting workers

Ho Chi Minh City's authorities will organise online and offline job transaction floors in the Southwest and Central Highlands regions to support businesses in recruiting labourers.
back_to_top