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The Divergent Expansion Strategies of Local and International Coffee Brands in Vietnam

What's the difference between the store expansion strategies of local coffee brands and international coffee giants in Vietnam?
Unravel the secrets of Vietnam's coffee shop success Insights from local brands


中文版傳送門: 越南咖啡市場的發展與競爭:國際品牌與本土品牌的不同策略


Vietnam, the world’s second-largest coffee producer, is a country with a rich coffee culture. The history of Vietnamese coffee can be traced back to the mid-19th century when French colonizers introduced coffee to Vietnam. Coffee quickly spread across the country and became a beloved beverage among locals.


With the infiltration of Western culture and renowned coffee brands, international coffee giants like Starbucks have opened branches in Vietnam, offering a new coffee experience for Vietnamese consumers. These international coffee brands typically provide a more comfortable environment and more refined coffee beverages to attract Vietnamese consumers from the middle class and above.


The increasingly sophisticated and changing tastes of Vietnamese consumers have also led to the development of unique flavors. In addition to traditional Vietnamese coffee, many new coffee flavors have emerged in Vietnam, such as coconut coffee, egg coffee, and chocolate coffee. These new coffee flavors are popular among Vietnamese consumers and have brought new growth momentum to the Vietnamese coffee market.


In Vietnam, coffee shops are not just places to drink coffee; they are social venues. Vietnamese people enjoy chatting with friends and conducting business in coffee shops. Coffee shops have also become important places for leisure and entertainment for Vietnamese people. The unique flavor of Vietnamese coffee and the comfortable atmosphere of Vietnamese coffee shops attract more and more international tourists. Vietnamese coffee culture has become one of the must-experience cultures for tourists visiting Vietnam. According to a report by Mordor Intelligence, the size of the Vietnamese coffee market is expected to grow from $472.61 million in 2023 to $706.06 million in 2028, with an annual growth rate of 8.36%.


The following diagram and description reveal that the store expansion strategies of local coffee brands and international coffee giants are quite different.


Local Coffee Brands: Widespread Distribution, Deep Local Penetration

1. Highland Coffee

▷ 165 branches in Hanoi
▷ 241 branches in Ho Chi Minh City
▷ A total of 719 branches distributed in 53 cities nationwide


The store location of highlands coffee


2. Phúc Long Coffee & Tea

▷ 138 branches in Hanoi
▷ 389 branches in Ho Chi Minh City
▷ A total of 867 branches nationwide, making it the brand with the most branches


The store location of Phúc Long Coffee & Tea


3. Trung Nguyen Coffee

▷ The famous G7 instant coffee in Taiwan is one of its brands
▷ Created a popular store with unique feature, paved with white sand
▷ A total of 547 branches nationwide
▷ 67 branches in Hanoi
▷ 185 branches in Ho Chi Minh City
▷ Opened its first overseas flagship store in Shanghai in 2023


The store location of Trung Nguyen Coffee


4. The Coffee House

▷ A young brand that particularly attracts young people, students, and office workers
▷ A total of 150 branches nationwide
▷ Although the number of branches is not large, its revenue ranked second nationwide in 2019
▷ Launched a high-end new brand, Signature by The Coffee House, in Ho Chi Minh City in January 2023


The store location of The Coffee House


International Coffee Giants: Concentrated in Large Cities, Taking the High-End Route

1. Starbucks

▷ Entered the Vietnamese market for ten years and finally expanded to over 100 branches
▷ 55 branches in Ho Chi Minh City


The store location of Starbucks


By the end of 2023, Starbucks had already opened 105 stores in Vietnam. In addition to Hanoi and Ho Chi Minh City, it gradually moved to second-tier cities such as Haiphong, Da Nang, and Binh Duong Province.


After the COVID-19 pandemic, the retail and catering industries in various countries are facing the pressure of rising raw materials, rents, and personnel costs, forcing them to adjust their brand strategies. Although the Vietnamese coffee market has huge potential and prospects, it also faces many difficulties and competition. Major coffee brands are expected to achieve a revenue growth of 15-30% in 2024, but this means that each brand needs to be able to continuously create and innovate to meet the diversified and high-quality needs of Vietnamese consumers.


  By Evelyn Lin 
  Product Sales Manager

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