The US ice cream war in Vietnam

VietNamNet Bridge – A lot of well-known US ice cream brands have jumped into Vietnam, or they are considering penetrating the market.

Vietnam, ice cream, CPI, income per capita, investment

Just several months after Baskin-Robbins returned to Vietnam noisily, Swensen’s is also planning to expand its shop network, continuing the “general offensive” of the US ice cream brands to the Vietnamese market.

The Vietnamese ice cream chain market had seen the appearance of only one US ice cream brand – Bud’s – until the returning of Baskin-Robbins in 2011.

The San Francisco sourced brand was bought by North American Food Corp under a franchising contract. After that the ice cream products with the brand have been distributed in Vietnam since 2007 with the investment capital of one million dollars, not including the franchising fee.

With the appearance of Bud’s, Vietnamese people, for the first time, could enjoy the US cream imported 100 percent from the US in a modern and comfortable space.

Bud’s not only brought US ice cream, but the concept “Casual dining” as well, which aimed to increase the convenience for its clients. To date, Bud’s has developed 12 shops which all are located in the advantageous positions in HCM City, and one branch in Hanoi.

Baskin-Robbins appeared in Vietnam a long time after Bud’s. It was brought to Vietnam by Blue Star Food Corp under a franchising contract in late 2011. In fact, this was the second presence of the US ice cream in Vietnam after the unsuccessful debut in 1994.

Eighteen years ago, Baskin-Robbins arrived in Vietnam following the step of a Viet Kieu (overseas Vietnamese), but it then quickly quitted the market.

When returning to Vietnam, the US ice cream has been trying a more methodical campaign to conquer the domestic market. Blue Star Food Corp has stated that it would open 50 shops within five years.

The business has been going very well, when all the ice cream imports planned for 4-month sale were sold out just after 10 days of opening. The satisfactory business result has shown the big changes in the Vietnamese consumers’ consumption habit.

Sara Larcombe, Baskin-Robbins’ International Marketing Director, said the decision to franchise the ice cream brand to Blue Star Food Corp was really a decision in time.

She said that the F&B (food and beverage) chain market in Vietnam has witnessed a very rapid development over the last five years. She also can see the relatively good purchasing power from the medium class consumers in Vietnam.

It is really good news for both the franchiser and franchisee that the market showed active response to the ice cream which is absolutely not cheap at all – VND45,000-50,000 per cube, much more expensive than Bud’s sold at VND28,000.

Baskin-Robbins has also been pursuing a very methodical and effective marketing strategy to lure Baskin-Robbins’ customers. Like the way Lotteria once applied to lure KFC’s customers, a Baskin-Robbins branch was set up on Nguyen Trai Road, which is just several hundreds of meters far away from a Bud’s one, while the Baskin-Robbins on Nguyen Thi Minh Khai road is facing another Bud’s. By the end of November 2012, the new rival of Bud’s had had 10 shops in HCM City.

Though both Bud’s and Baskin-Robbins have made initial success, they still have their problems.

As for Bud’s, the quality of the staff is not really good. A lot of complaints about the service quality can be easily found on Internet. In the era of information boom, this is really a bad mark for the US ice cream.

Regarding Baskin-Robins, the overly rapid development of the system in Vietnam has created latent risks for itself. In the US, Baskin-Robbins is understood as a popular ice cream chain at reasonable costs. Meanwhile, the relatively high prices in Vietnam have accidentally made Baskin-Robbins a high-end brand.

This could be a problem for the ice cream brand in the long term, because it cannot compare with another US ice cream brand, a really high-end brand - Häagen-Dazs.


Vietnam, ice cream, CPI, income per capita, investment