Coffee chains fight for market share

Coffee chains fight for market share

The battle among the big players in the coffee market has not gone the way people have predicted. All of them have been winners.

Trung Nguyen, Highlands Coffee and Starbucks Coffee are the three biggest names in the Vietnamese market. Trung Nguyen is the most common brand, considering its high number of shops in its network. However, the other two also attract many Vietnamese customers.

After 10 years of presence in Vietnam, Highlands Coffee has nearly 100 shops, mostly in large cities. Since the very beginning, it has been positioned as the coffee for businesspeople and high-income earners.

Market surveys show that customers choose Highlands Coffee because of the “good drinks and large space”, “good service attitude” and “diverse products”.

Starbucks, which arrived in Vietnam two years ago, has over 10 shops in HCM City and Hanoi. However, the number of shops are samll compared with the 12,000 Starbucks shops worldwide.

Nguyen Duc Son, the branding strategic director for Richard Moore Associates, noted that the Starbucks’ brand positioning is different from the Hanoi’s traditional coffee culture. Starbucks not only sells cups of coffee, but also a lifestyle.

Meanwhile, the Vietnamese Trung Nguyen has had over 1,000 cafes all over the country. The strong flavor is the most outstanding characteristic of the brand.

Methods change with the times

Trung Nguyen, well aware of the high risk amid the presence of foreign brands, has been making every effort to change its face to adapt to the new circumstances.

Trung Nguyen cafes have been re-designed as more modern and luxurious. With the motto “one good book can change someone’s life”, Trung Nguyen has a “bookcase of success” at all of its shops in the network, which differentiates its brand.

In 2012, Viet Thai International JSC (VTI) sold 49 percent of its business division in Vietnam and 60 percent in Hong Kong to Jollibee Group for $25 million.

After the deal, Highlands Coffee has a new positioning – purely Vietnamese coffee. It now focuses on selling familiar products, such as iced milk coffee and coffee prepared with a filter at reasonable prices.

The fact that Highlands Coffee has “humbled itself” is believed to be a golden opportunity for Starbucks to dominate the high-end market segment.

Foreign brands have been following global standard styles to win Vietnamese hearts. Meanwhile, Trung Nguyen serves the Vietnamese taste by providing strongly flavored coffee.

Trung Nguyen in late 2014 announced its café pubs and coffee products will soon appear in Dubai and the United Arab Emirates (UAE), as a result of an agreement between the Trung Nguyen Coffee Group and Global Hotels Management LLC (GHM).

vietnamnet