How expensive will Starbucks coffee be in Vietnam?

VietNamNet Bridge – Analysts believe that Starbucks coffee in Vietnam would be closer to the Starbucks coffee in India rather than to China.

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Vietnam, Starbucks, coffee brand, Trung Nguyen, competition


The hottest topic in the discussion of all Vietnamese people in urban areas these days, from office workers to businessmen, is the opening of the first Starbucks coffee shop in Vietnam the next month. They all are curious about how expensive Starbucks coffee will be in Vietnam.

Experts say that when entering Vietnam, Starbucks would have to compete not only with Vietnamese pavement café which provide cheap coffee that fits Vietnamese taste, but also other global brands such as Coffee Bean & Tea Leaf from the US or Gloria Jean’s Coffees from Australia.

Especially, Starbucks will have to persuade Vietnamese consumers, who have got used to the pure coffee with strong flavor, to shift to drink the coffee with simple flavors with a lot of fat.

Bloomberg newswire met Tran Cao Tho, a 32-year old architect, and found out that Tho, like the other young people aged below 35, like the coffee with strong flavors, while Starbucks cannot fill that niche. Meanwhile, the US brand plans to lure the clients like Tho – the most potential clients, who like coffee and can pay for coffee every day.

Tho said to Bloomberg at Café Hanh in Hanoi that he likes black coffee with strong flavor. He said he would go to Starbucks café sometimes, but just to enjoy the convenience and atmosphere there, not to enjoy coffee. Tho doesn’t like Starbucks coffee because its flavor is not strong enough.

However, John Culver, President in charge of the Chinese and Asia Pacific Markets of Starbucks, has stated that the US brand would march towards the Vietnamese market, bringing the coffee with the flavor to be adjusted to fit the taste of Vietnamese people.

This means that Starbucks has shown its strong determination to conquer the heart of Vietnamese people instead of just bringing the US modern style and convenience to the cafes in the country. However, the US senior executive refused to say more clearly how many Starbucks shops to be opened in Vietnam.

Vietnam, a vast market with the coffee consumption increasing by 65 percent in 2008-2011, deserves Starbucks’ methodical investment. The nation has the population of 90 million people, and three out of every five people are aged below 35.

A report of the General Statistics Office, in 2012, Vietnam exported 1.73 million tons of coffee, and it remains the biggest robusta coffee exporter in the world.

John Culver from Starbucks said that Starbucks in Vietnam will be positioned as a high end product. Meanwhile, Sara Senatore of Sanford C. Bernstein has predicted that Starbucks coffee price in Vietnam would be lower than in the US, because of the Vietnamese lower income and lower operation costs in the Vietnamese market.

The analyst believes that the Starbucks coffee in Vietnam may be closer to that in India than in China. In India, a cup of cappuccino of Starbucks is priced at Rupee95, or $1.74, while it is $4 in China.

Meanwhile, a cup of coffee at a pavement café in Vietnam is priced at VND10,000 ($0.5), and a cup of Trung Nguyen cappuccino coffee is at VND65,000, or more than $3.

Dang Le Nguyen Vu, the owner of the well known brand Trung Nguyen Coffee, has commented that there will be the Vietnamese people who go to Starbucks café just to prove that they are modern and connoisseurs.

“Meanwhile, those who are keen at coffee will come to us,” he said.

TBKTVN

Vietnam, Starbucks, coffee brand, Trung Nguyen, competition
 
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