Coffee market large enough for late comers

Aug 9th at 14:14

09-08-2013 14:14:38+07:00

The Vietnamese coffee market is large enough not only for the strong brands such as Starbucks, Trung Nguyen or Highlands. A lot of small cafes have been living well, while more and more new take-away cafés have opened.

Though having powerful financial capability and large distribution networks, the “big guys” still cannot cover the whole Vietnamese coffee market and satisfy all the demands for enjoying coffee.

More and more cafés, from the big ones with impressive interior decorations to the small pavement shops, from the ones on big streets to the ones located on small alleys inaccessible for cars. It is obvious that nearly all the cafes enjoy large custom.

The common characteristic of the cafes is that their customers are the people who have the demand to enjoy real coffee, not the facilities of the cafes or the atmosphere there.

A Mintel’s recent survey on the coffee markets in Vietnam and neighboring countries in Asia released in early 2013 showed that Vietnam is the leading country in the world in terms of real coffee – roasted coffee or whole bean coffee – consumption.

The market survey firm also pointed out that there are differences in the habit of tasting coffee between Vietnamese and the other nations in the world. Vietnamese always demand higher for coffee taste.

Mintel estimated that the Vietnamese coffee market was worth $127.33 million in 2008, $287.34 million in 2012 and it is expected to soar to $573.75 million by 2016.

A lot of the world’s well-known brands have made their presence in Vietnam. Though each of them has its own strategy to conquer the Vietnamese market, all of them have been integrating the production and the café networks, i.e. the production and the distribution networks. The cafés help introduce their products to Vietnamese customers.

On the first days of its operation in 1998, Highlands only focused on packed coffee. However, in 2002, the first Highlands Coffee shop was opened in HCM City, located at the Metropolitan Building in front of the Notre Dame Cathedral in district 1 in the central area.

To date, Highlands Coffee’s chain has got 40 shops located throughout the country.

In 2012, before the US Starbucks set its foot on Vietnam, Trung Nguyen spent tens of billions of dong to upgrade its 55 high end shops. Pham Thi Diep Giang, Public Relations Deputy Director, affirmed that the turnover of the high-end shop chain has increased by two folds over the last year.

Trung Nguyen is believed to have no redoubtable rival in the roasted coffee market segment. Meanwhile, it holds 38 percent of the instant coffee market which had the value of VND6 trillion in 2012. The remaining market share belongs to Vnacafe with 35 percent, Nestle 22-25 percent and others.

The US giant Starbucks has been taking prompt actions in its plan to conquer the Vietnamese market. After the first shop at the New World Saigon opened in late 2012, the second shop has just been opened in district 1.

In late July 2013, a completely new coffee brand was introduced – PhinDeli of PhinDeli JSC. Do Quoc Tuan, the JSC’s General Director, said the coffee demand in the domestic market is very big which continues rising, and that he does not mind of having to compete with the giants which have been existing on the market.

vietnamnet