International brands battle for Vietnam milk tea market
As Vietnam’s economy grows the Vietnam milk tea market has become a battleground for foreign franchises.
The latest debutant is Taiwanese milk tea brand T4, founded in 2004, and which has steadily built an international network now including Malaysia, Thailand, Indonesia, China, the UK and the US.
The first T4 outlet in Vietnam is a two-storey building, located on Phan Xich Long street in Ho Chi Minh City, a popular destination for milktea fans, where consumers are spoilt for choice.
Next on the scene is Tealive, a new brand from the former Malaysian master franchisee for Chatime.
And while new names are coming, current players are expanding their networks, in a market share battle even more fierce than the notorious coffee market stoush.
Gong Cha, Hong Kong-based Taiwanese milk tea chain, plans to boost franchise this year, after building a strong foothold in Ho Chi Minh City with 10 outlets. Now, Gong Cha is opening two stores in Hanoi and one in Danang, with more to come in other cities, including Haiphong.
Considered a prime competitor for Gong Cha, Koi The came to Vietnam in September 2015, and currently operates seven outlets in Ho Chi Minh City, all located in busy downtown sites or shopping malls.
Nguyen Hoai Phuong, a spokesperson for Gong Cha Vietnam, previously told a local newspaper that milktea is the weapon to win in Vietnam’s beverage cafe market, largely due to the youthful Vietnamese population.
That might well be the reason why more and more international brands are planning Vietnam expansion.
More big names have just joined the segment – Queeny, Chachago, Sharetea and Goky.
Middle market players include Bobapop, Teacup and Dingtea, the oldest player in the sector. Dingtea landed in Vietnam in 2014 and has now built a network of nearly 100 outlets across the country. It has 350 stores in China and 650 globally.
In this battle, local brands seem to struggle, with only a few names having gained a reputation and real market penetration. Hot and Cold might be considered the most successful, a pioneer in the Vietnam milk tea market since 2011. Charting a different course to most of its rivals, Hot and Cold grew market share with a customised menu and finger food.
Given the size of the market and Vietnam’s young population, many more milk tea and juice brands are expected to try their luck in due course, making the battle for share even more fierce.