VietNamNet Bridge – The Vietnamese beverage market, including tea and coffee, according to market survey firm Euromonitor, is making lots of money and attracting droves of customers to foreign and local cafes.

People queue to buy Phuc Long coffee on Ly Tu Trong Road, District 1, HCMC.

Last year, the market was worth VND14.1 trillion in 2013, of which coffee sales brought VND8 trillion, Euromonitor said.

University student Vu Hoang Tram is a typical customer. The 18-year-old girl wanted to to invite her friends to a party, and she now has many choices: Starbucks coffee, Baskin Robbins ice cream, McDonald’s hamburger, Subway sandwiches and KFC fried chicken.

Tram and her friends did not have many choices in the past. They either enjoyed cups of milk tea, or Phuc Long cups of tea, and occasionally they went to KFC to have fried chicken.

Tram and those like her are called by a US franchise expert, who came to Vietnam to learn about business opportunities several months ago, as “freshmen”, that is, new potential customers of foreign food and beverage (F&B) brands.

The young customers do not have much money, but they have many reasons to spend, either on birthday parties and reunion parties, or first-month salary and victory celebrations.

Young customers like going to modern shops and restaurants decorated in western styles, instead of traditional ones with a less contemporary style.

Starbucks café is a favorite destination for them. The first shop of this chain opened in HCM City last February in an impressive way when people queued up waiting for their turns to get cups of coffee.

To date, Starbucks now has 11 shops in its chain, including three in Hanoi.

Hanoians also queued up for the first shop’s opening. The US giant is secretive about its sales, but the optimism of the chain’s managers indicates a smooth business performance.

“Giants always take slow steps, but take up a lot of space,” a branding expert said.

Also, according to the branding expert, Vietnam’s direct rival of Starbucks is Phuc Long, which has shops also decorated in a western style and served with a western menu, but with “reasonable prices”.

The key to success of the Vietnamese café chain, which follows a low-price business strategy, is the large number of regular clientele.

Several days ago, HCM City’s residents were once again seen standing in a long queue in front of a café. It was Caffe Bene, a new brand from South Korea.

Though making its debut in August, a fan-page of the coffee brand was set up in March. A professional media campaign was later run, which helped to attract HCM City residents as well as people from neighboring provinces.

Caffe Bene entered the market following S. Korean-owned Tous les Jours and Paris Baguette, taking full advantage of the popularity of Korean culture in the Vietnamese market, although the shop’s products are mostly Western food, including coffee, tea, sandwiches, cakes and breads.  

In 2006, when the news about upcoming arrival Starbucks emerged, Vietnamese investors hurried to set up café chains of their own. Vinamit, for example, developed the Regina chain. Six years ago, Nguyen Lam Vien, Vinamit’s general director, was seen standing in a queue at Starbucks.

“I do not think Starbucks is a rival. Instead, I think I have one more ally,” Vien said.

Kim Chi