Home » Starbucks Vietnam: Why the American company can’t succeed in a coffee-drinking country.

Starbucks Vietnam: Why the American company can’t succeed in a coffee-drinking country.

by Noor Zaman
0 comment

Tu Anh Le enjoys visiting the Starbucks in the pulsating center of Ho Chi Minh City, Vietnam.

The 26-year-old and her friends get dressed up for the event and take pictures of themselves in front of the cafe.

Tu Anh Le, who considers the cafe to be “luxurious,” like a five-star hotel, claims that photos taken there make her Instagram look finer. I frequently receive positive feedback that I look fashionable.

She likes Starbucks but doesn’t enjoy coffee because “It makes my teeth yellow,” thus that seems to be the biggest lure for her. I like smoothies or bubble milk tea better.

The conclusion is obvious ten years after the American chain arrived in Vietnam.

Vietnamese people enjoy their coffee, but they don’t appear to particularly enjoy Starbucks. And the individuals that do, such as Tu Anh Le, are not actually attempting to obtain coffee.

According to Euromonitor International, Starbucks only made just 2% of the $1.2 billion (£934 million) Vietnamese market for coffee in 2022. Its presence in the nation is also not growing quickly. There are 92 stores there, or less than one for every million inhabitants. Thailand and Indonesia have around seven and two, respectively, in contrast.

According to Nathanael Lim, an analyst at Euromonitor International, “Starbucks’ presence remains limited due to [the] consumer preference for local coffee flavors.

Starbucks told the BBC that it was committed to making long-term investments in Vietnam, but it remained mum on whether it was profitable there.

However, it has continued to do better than other global rivals. After 15 years, The Coffee Bean & Tea Leaf, another US chain, only has 15 locations in this country. While Gloria Jean’s from Australia left Vietnam in 2017, the Chinese-owned Mellower Coffee recently announced it was closing its doors after four years in business.

They all likely encountered the same difficulties as Starbucks. Vietnam is the second-largest exporter of coffee in the world, thus the country is not unfamiliar with the beverage.

The menu is expensive for a market like Vietnam, where there are at least 10 coffee shops, ranging from roadside sellers to trendy cafes. And in a nation where street coffee vendors frequently serve the beverage on inexpensive, tiny plastic tables while pushing trolleys, drinking coffee is far from a luxury. Some even provide their clients newspapers to use as mats so they can drink their coffee while seated on the floor.

Additionally, the pumpkin spice lattes and Java chip frappucinos that have triumphed in other places don’t appear to work as well here.

Trang Do, a game developer who resides in Da Nang on Vietnam’s coast, complains that the Starbucks menu is not diverse. She typically has three cups of coffee every day, but not always.

She firmly believes that authentic Vietnamese coffee is the best. It has more fragrance and is stronger. Vietnamese coffee is prepared using a filter, which increases the amount of coffee extracted. When coffee is brewed, add hot water, and let it drip gradually.

Vietnamese coffee is made by pouring hot water over coffee grinds that have been placed in a tin filter called a “phin” over a glass. The decoction takes around 10 minutes to filter into the glass below. Condensed milk, a common ingredient in Vietnamese coffee, can be added to the beverage either hot or cold.

Vietnam first experienced coffee in the 19th century thanks to French colonizers. However, the country’s soil and hot, humid environment did not suit the first coffee plant, an Arabica species, well.

The French later brought Robusta plants, which flourished. Robusta contains more caffeine, a stronger flavor, and is also more bitter, and that is the coffee that is currently popular in Vietnam.

However, Robusta coffee makes over 97% of the 200,000 tonnes or 2 kg of coffee that Vietnam consumes annually.

It could be the reason why even coffee drinkers who frequent Starbucks don’t appear to enjoy the selection. Due to the cafe’s “youthful” atmosphere, marketer Tri Dang enjoys bringing clients there, especially elderly ones.

He claims, however, that he doesn’t frequently drink coffee from Starbucks since it “does not suit my coffee taste” and has “a lighter smell, not bitter.”

And none of the regional favorites are on the menu. Condensed milk is the most widely used accouterment, although there are other, more daring choices. In the 1940s, egg coffee was created in Hanoi.

You may also like

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy