Vietnam Coffee Chains Take their Fight to the Streets

Thi Ha

09:54 06/10/2019

Major coffee brands like Highlands, Vinacafe and Passio are trying to win over new customers with street carts in places with heavy traffic.

Vietnam Coffee Chains Take their Fight to the Streets

A Highlands Coffee street vendor in Ho Chi Minh City. Photo by VnExpress/Thi Ha.


Highlands Coffee, a Vietnamese brand with 262 stores nationwide and a leader in the middle and high-end segment coffee retail market, has recently begun running coffee trolleys at roadsides in Ho Chi Minh City.
According to Highlands’ sales staff, the model hit the streets two months ago, operating between 7-9 a.m. each day, with each trolley selling several dozen takeaway cups daily, priced at VND29,000 ($1.25) per cup.
"Highlands wants to open more sidewalk trolleys to serve the needs of customers on the road. Instead of having to enter shops, they can just stop by and grab a coffee," said an employee, adding that the chain currently has 4-5 trolleys, but plans to expand the system to more heavy-traffic locations.
Although it does not own a chain of outlets, instant coffee producer Vinacafe has also opened its own morning street trolleys, offering a cup coffee for VND12,000 (52 cents) and VND14,000 (61 cents) at two locations in HCMC.
The manager of a Vinacafe trolley in Phu Nhuan District said around 50 cups were sold every morning. In addition to promoting the brand, this was a low-investment, low-risk model, which the company plans to expand by turning it into a franchise to attract young investors, he said.
In the past few months, the Passio coffee chain in HCMC has also been reducing its prices and placing staff outside its shops, selling coffee for just VND19,000 (82 cents) a cup.
In 2014 and 2015, Passio’s stores had always been crowded, but now, it has to compete with stores of other coffee chains. So they are now having staff stand outside their outlets to promote their products, greet and draw in passersby, a Passio employee said.
In a similar move last month, Trung Nguyen, a leading coffee chain in Vietnam that has traditionally operated middle and high-end coffee shops, launched E-Coffee, a small scale coffee shop franchise targeting takeaway customers.
The model, which costs around one-eighth of a normal Trung Nguyen outlet’s investment, offers coffee at lower prices, and targets low and medium income customers who are normally patrons of Vietnam’s traditional coffee shops, said the group’s communications director Vo Thi Ha Giang.
According to a marketing expert in Ho Chi Minh City who wished to remain unnamed, big coffee chains are turning to the street, a segment they have traditionally neglected, as a result of mounting competition.
"As the mid and high-end segments become increasingly saturated, the affordable and low-income groups are increasingly seen as potential revenue generators. This consumer segment is large and easy to serve, so could generate big profits because of low investment costs, as long as businesses find the right model."
However, Do Quoc Anh, the director of Coffee Bike, a mobile coffee catering chain in Hanoi, warned that the current street trolley model was still unprofessional, unsustainable and seasonal, and if not developed properly, would die out as a trend.
Anh’s company had originally operated a number of coffee carts, but had to transition towards setting up outlets and developing a franchise to maintain business, he said.
According to India-based market research firm Ken Research, Vietnam’s domestic consumption of coffee has been growing 7.9 percent annually, while BMI Research, a subsidiary of ratings firm Fitch, estimates consumption grew from 0.43 kg per person in 2005 to 1.38 kg in 2015.
This is the highest growth rate of any global coffee exporter, and the figure is forecast to reach 2.6 kg by 2021, BMI research said.

Theo VnExpress

Từ khóa: Vietnam