During my first year or so in Viet Nam, i.e., I emailed Howard Schultz, then CEO of Starbucks. I noticed that a number of coffee chains, including Trung Nguyen and Highlands, were charging Starbucks’ prices for coffee drinks, snacks, etc. These cafes attracted Vietnamese of means who could easily afford a few dollars for a coffee, as well as expats and tourists. It meant there was room in the market for a company like Starbucks – not in five or 10 years but now (then)!
After sending my note to Mr. Schultz, which I considered a bit of free (multimillion-dollar) advice and nothing more, I received an intriguing reply from his assistant. She asked if I had a background in the food and beverage industry (I didn’t) or in franchising (same answer). That was the end of that. Maybe I put a bug in their corporate ear or maybe Viet Nam was already on their radar.
Amazingly, it wasn’t until early 2013, at least seven (7) years later after the email exchange, that Starbucks opened its first cafe in Ho Chi Minh City (HCMC) in partnership with Hong Kong’s Maxim’s Group. At that time, in addition to Trung Nguyen and Highlands Coffee, two foreign companies had entered the Viet Nam market, the US-based Coffee Bean & Tea Leaf and Australia’s Gloria Jean’s.
I remember having a disappointing experience at the first cafe shortly after it opened. It was clear that the employees were still being trained and that the quality of the drinks was not yet up to Starbucks’ high standards. That quickly changed. Consider it a growing pain of setting up shop in a new market.
Since then, even more local coffee shops such as The Coffee House, Cộng Cà Phê, and Urban Coffee have opened their doors, making the coffee scene more competitive than ever.
Starbucks celebrated its 5th anniversary last year and is expected to have a total of 45 stores in the near future in Danang, Haiphong, Hanoi, and HCMC. The cafe near the Rex Hotel in HCMC may very well be the highest-grossing Starbucks in the country. It was at 95% capacity on a recent evening.
Shalom (שלום), MAA