Which are highest-grossing coffee chains in Vietnam?
Updated at Thursday, 11 Jul 2019, 09:33
The Hanoitimes - You can easily find a cafe in Vietnam where you can enjoy free wifi. Which coffee chain is the most successful in Vietnam?
Highland Coffee Service JSC, the owner of the Highlands Coffee chain, reported revenue of over VND1.6 trillion (US$68.6 million) in 2018, up 31% from a year earlier, enabling it to retain the throne in term of earnings among the coffee chains in Vietnam, VnExpress reported.
Founded by a Vietnamese-American since 2012, Highlands Coffee chose a different and daring strategy focusing on the cover rate instead of consumers’ tastes.
This coffee chain rolls out its simple menu with quick and easy drink recipes, but has managed to expand its network by marking presence ub a number of buildings and trade centers in prime locations.
Inside a Cong cafe. Photo: hue360.net
Due to the large expense in renting spaces and advertising, not until the last two years did Highlands Coffee earn profit as its revenue reached billions of Vietnamese dongs.
In 2018, this chain obtained a pre-tax profit of VND129 billion (US$5.5 million), a slight fall from VND132 billion (US$5.7 million) in 2017, despite a 31% increase in revenue, due to the escalating selling expense.
In 2017, Starbucks ranked second in revenue, just behind Highlands Coffee, but it lost the position to The Coffee House in 2018 when the latter doubled its revenue.
Statistics from Vietnam Industry Research and Consultancy (VIRAC) showed that a number of successful coffee chains in Vietnam achieved double-digit growth in revenues in 2018.
According to VIRAC, The Coffee House's revenue reached VND669 billion (US$28.7 million) in 2018, while Starbucks was pushed down to the third place with nearly VND600 billion (US$25.7 million).
Phuc Long is the fourth-ranked chain with VND473 billion (US$20.3 million) in revenue, while Trung Nguyen maintains the turnover of over VND350 billion (US$15 million).
In 2018, Nikkei Asian Review rated The Coffee House as one of the fastest-growing coffee chains in Vietnam thanks to its rich menu, affordable prices, high-speed wifi and orientation towards catering to young Vietnamese.
The Coffee House’s Founder and CEO Nguyen Hai Ninh targeted to open about 700 cafes nationwide in the next five years with an average pace of ten new ones each month.
Phuc Long has made its name well-known with the famous milk tea and collected more than VND470 billion (US$20.2 million) in 2018, up 39% compared to that of the previous year thanks to its expanding network from the South to the North of Vietnam.
Its typical taste of the tea has charmed many consumers as evidenced by long queues of consumers in front of Phuc Long’s facilities and the flood of orders through food deliver apps when Phuc Long opened its first cafe in Hanoi.
Compared to the above brands, Trung Nguyen seems to exclude itself from the race for market share.
According to its latest financial report, the total revenue of Trung Nguyen was over VND4.8 trillion (US$206 million) in 2018, up 8% compared to the previous year’s figure.
However, the profit before tax of this corporation suddenly fell by 50%, from VND681 billion (US$29.2 million) in 2017 to just VND347 billion (US$14.9 million).
The report also revealed that the output of this business falls while all expenses were on the rise, leading by the sale expense, which was VND725 billion (US$31.1 million) in 2018, up 19% year on year and amounting to over half of gross profit from business activities.
Cong Caphe, which is characterized by old-style decoration, has gradually proved its appeal to the North’s market with total revenues of the whole chain might not be inferior to the first group like Starbucks or The Coffee House.
However, the chain is encountering some problems regarding investors’ concern as franchised Cong cafes, which are located in close proximity to one another and compete among themselves.