CHAIN BUSINESS - OPPORTUNITY FOR VIETNAMESE ENTERPRISES

CHAIN BUSINESS - OPPORTUNITY FOR VIETNAMESE ENTERPRISES

The Vietnamese coffee market still has a lot of potential. But for sustainable development, not all brands can do it. That’s why each brand needs to have the right direction to create its own strength. Otherwise, it will be excluded from the fierce competition today.

Investment from production

Realizing that long-term, sustainable development is very important. Recently The Coffee House has announced its 2018 business strategy. They have committed themselves to coffee production. Since then, they have bought coffee production farms in Cau Dat. This farm has an area of about 33 hectares, the output of fresh coffee reaches about 400 tons in 2019.

The director of The Coffee House is confident that the coffee area of this enterprise will increase strongly in the nearest future. Clearly with certain success in the market, The Coffee House can completely occupy a large market share with more breakthrough strategies.

The success of Starbucks

Starbuck is the most successful store chain in the world. After 2 years of entering the Vietnamese market, they quickly dominated the market. Realizing that Vietnam’s coffee compared to world coffee is also of poor quality. Therefore, they have launched Vietnamese coffee with the name “DaLat Blend”. This product was quickly available in more than 21,500 stores in 56 countries. This is a high-end product line. A packet of powdered coffee is about 250g for 12.5 USD. Coffee in the Central Highlands in general and Lam Dong in particular is the place chosen by Starbucks as the place to produce this premium product.

Vietnam market forecast

The current coffee market in Vietnam is growing well. Vietnam is the world’s largest producer and consumer of coffee. It is forecasted that by 2021, consumption may reach 2.6 kg / person / year. The competition is increasingly fierce with new brands. In addition to the famous brands in the market such as Trung Nguyen, Vinacafe, … Vietnam coffee market has the appearance of both big giants such as highland, starbucks, … Before unpredictable developments, Vietnamese businesses need more aggressive strategies. If you do not want a piece of fat cake to fall into the hands of world giants ..

There is also big grands must “wear a hat go away”

Before the rapid release of the chain trading system. A series of big men realized the great potential from a huge piece of Vietnamese coffee cake. But in the end they failed in the Vietnamese market

Because of that, a typical example is not every domestic and foreign coffee brand has a place if not received by consumers. In early 2017, The Kafe coffee shop chain closed after more than 1 year of successful call of over 5 million USD. Along with that is the departure of the Australian coffee brand – Gloria Jean’s Coffees. According to Gloria Jean’s Coffees director, incorrect access has led to these failures.

Franchising trend is growing more and more frantic

Before Gloria Jean’s Coffees, a number of great maternal grandparents also had to be bitter when they were too confident to enter the Vietnamese market. The famous ILLY coffee brand in Europe and the world in Vietnam also went bankrupt when it was only able to open 2 coffee shops in Ho Chi Minh City.

The franchise trend has brought in revenue for the store chains. The report predicts the number of chain stores will grow strongly in the next few years in both quantity and gradually increase the proportion of independent coffee shops and franchise chains. According to experts, the store chain model in Vietnam is developing very strongly, estimated growth rate is about 7% / year.

Chain business opportunities

The outlook on the business chain is forecasted to be a development trend in the coming years but there are new developments. In the future, creative space designs, promoting nature harmony with nature are also important factors determining the success of coffee chains. Not only that, the competition is getting fiercer as customers tend to favor new business models such as take away, street kiosk. Enterprises that want to dominate the market share must always improve and develop new models that best meet the needs of customers.

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