- May 9, 2023
- Posted by: GBS
- Category: Business
Vietnam’s coffee market is seeing increasing competition from foreign coffee chains.
%Arabica, a renowned coffee chain from Kyoto, Japan, with 140 stores globally, is set to open its second store in Ho Chi Minh City after opening its first. The chain plans to expand in Hanoi, Hoi An, and Phu Quoc Island.
Thailand’s biggest coffee chain, Café Amazon, with 3,900 stores in Thailand, has entered Vietnam with 19 stores in the southern region, including 15 in Ho Chi Minh City. Café Amazon intends to open 1,000 stores outside of Thailand by 2025.
Starbucks, the American coffee chain, has been in Vietnam for a decade and aims to open its 100th store this year. By the end of 2022, it had 87 stores, mainly in Ho Chi Minh City with 50 shops, followed by Hanoi, Hai Phong, Hung Yen, Da Nang, and Nha Trang.
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The largest coffee chain in terms of size and revenue is Highlands Coffee, which was originally a Vietnamese coffee chain. It was bought by Jollibee Group of the Philippines in 2011 and has 609 stores in Vietnam and over 50 shops in the Philippines. There are rumors that Jollibee is seeking a partner to sell 10-15% of Highlands Coffee shares, valuing the chain at around $800 million.
The Coffee Bean & Tea Leaf, which is also owned by Jollibee, has been in Vietnam since 2006 but has only 15 stores. Only Highlands Coffee and Starbucks have been successful in developing their chains on a large scale, while Café Amazon might face difficulties in the early stages in Vietnam.
Coffee chains are focusing on sustainable development in the long run amid declining consumption. They are also promoting online sales on platforms such as ShopeeFood and Grab. Some coffee chains, like Starbucks, are closing stores in prime locations and moving to new urban areas and office buildings.
While Café Amazon and %Arabica have promising financial potential, some foreign coffee chains, like NYDC – New York Dessert Café, Gloria Jean’s Coffees, and Espressamente Illy, had to leave Vietnam due to inefficient business. The World Coffee Portal predicts that coffee chains in Vietnam will reach over 5,200 stores by 2025.