Vietnam coffee chains ready for a marketshare battle

Major Vietnam coffee chains are targeting new customers by adopting take-away business models on city streets.

In Ho Chi Minh City, the largest of the local Vietnam coffee chains, Highlands Coffee, which is majority-owned by Jollibee Foods, has been selling its product in coffee booths set up at roadsides from 7am – 9am when traffic is at its busiest.

According to Highland’s staff, the company will be building more sidewalk trolleys to serve the increasing needs of customers on the road, most of whom drive motorcycles. Instead of going into the coffee shops, customers now can just stop on the roadside and grab a coffee to go.

Other major coffee brands, including Passio and Vinacafe, set up morning coffee booths on some busy streets a few months ago. As the new model is easy to run and needs low-cost investment, the Vietnam coffee chains have been able to lower their prices to attract more customers.

Targeting low- and middle-income customers, Vietnamese coffee company Trung Nguyen has recently launched a small-scale coffee franchise called E-Coffee. According to Vo Thi Ha, communications director of Trung Nguyen Group, the takeaway coffee model only costs around one-eighth of a normal store’s investment.

“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,” a marketing expert in Ho Chi Minh City told local newspaper VN Express.

However, Coffee Bike director, Do Quoc Anh, described the current street-trolley coffee business model as unprofessional and unsustainable. He said if it was not developed properly and carefully, it would die out as a trend.