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How did Starbucks, with over 30,000 stores worldwide, fail in Vietnam?

  • August 2, 2024
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Millions of people all over the world Starbucks, part of the morning ritual It is one of the brands that countless people prefer every day during their coffee

How did Starbucks, with over 30,000 stores worldwide, fail in Vietnam?

Millions of people all over the world Starbucks, part of the morning ritual It is one of the brands that countless people prefer every day during their coffee break.

But why in a country like Vietnam, where the coffee culture is deep-rooted and long-lasting? Are you unable to achieve the success you desire?

Iced coffee, cà phê sữa đá, traditionally consumed in Vietnam, is very popular.

cà phê sữa đá Vietnamese coffee

So what makes this coffee special? Powerful Robusta beans! Starbucks’ mild Arabica beans can’t compete with the high-caffeine Vietnamese Robusta beans.

Starbucks Arabica beans contain 1.5% caffeine, while Robusta beans contain 1.5% caffeine It contains 2.7% caffeine. This difference is enough to boost the energy of Vietnamese coffee lovers.

Vietnam is the second largest coffee producer in the world, producing 1,845,032.98 tons of coffee annually.

Vietnamese coffee production

Local café owners are not bothered by the import of coffee, because there is enough coffee on their doorstep. They have strong, robust beans. This situation makes it difficult for imported coffee chains like Starbucks.

in Vietnam unique coffee varieties such as egg coffee (cà phê trứng) is available. However, the Starbucks menu is generally limited to the usual drinks such as flat whites and lattes. Like McDonald’s, Starbucks has not adapted its menu to appeal to local customers.

Until 1995, American companies were not allowed to enter Vietnam.

Starbucks Vietnam

But when American companies finally entered the Vietnamese market, They were confronted with thousands of local cafes. Local vendors control 80% of the restaurant industry, and it doesn’t look like that will change anytime soon.

Also in Starbucks stores in Vietnam Coffee prices are higher than in local cafes. Vietnamese people with good jobs sometimes go to Starbucks to break the routine and have a different experience, but this doesn’t happen often.

Starbucks Vietnam

The demand for coffee in Vietnam is high, so the competition is quite fierce. Starbucks, menu and strategy Sales are unlikely to increase unless the product is adapted to the Vietnamese market.

With local flavors and serving customers between Robusta/Arabic beans Offering choices could make Starbucks more successful in Vietnam.

Sources: Medium, CNBC

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