The Vietnamese milk tea industry has never stopped being vibrant. From a popular drink among young people, milk tea has grown strongly into a billion-dollar industry with the participation of major brands, both domestic and international. The competition between brands is becoming increasingly fierce, as they constantly expand their systems, improve customer experience and enhance product quality to maintain their position in this potential market.
Wave of competition between big brands
The milk tea market in Vietnam in 2024 will witness fierce competition between domestic and international brands. Names such as Phuc Long, Katinat, and Phe La are constantly innovating and creating business strategies. Phuc Long attracts customers with high-quality tea and a classy experience space in prime locations; Katinat scores points thanks to its modern space, suitable for young people who love virtual life; while Phe La stands out with its specialty oolong tea products, meeting the needs of traditional tea lovers.
However, recently, a famous milk tea brand from China has made its first moves to enter the Vietnamese market, creating a wave of strong competition. With strong financial potential and a rapid expansion strategy, this brand has grown strongly in many countries in the region. In the face of this competition, domestic brands need to constantly improve product quality and improve services to maintain market share and affirm their position in the milk tea market.
Constantly creating value for customers, Phuc Long reaps many positive results.
Established nearly 60 years ago, Phuc Long not only continues to develop quality products with rich flavors but also promotes the strategy of expanding and renovating the store system. Since joining Masan, this brand has made remarkable steps. As of March, Phuc Long Heritage (PLH) had more than 235 stores across the country. In 2024, PLH's net revenue reached VND 1,621 billion, an increase of 5.6% over the same period last year. Notably, the group of 11 renovated stores recorded an average daily sales growth of up to 13.4% in the dine-in segment. This proves the importance of upgrading space and improving customer experience to boost revenue.
With the store renovation strategy, PLH's new stores not only have a new color scheme, creating a light, bright and cozy space, but also enhance the customer experience. This success is also reflected in the impressive improvement in profits, when the profit after tax before minority interests (NPAT Pre-MI) increased more than 4 times compared to the previous year, reaching VND97 billion. The net profit margin reached 7.6%, demonstrating the optimization in the brand's operations.
According to research by iPOS.vn, the F&B market in Vietnam in 2024 is expected to reach a value of more than 655 trillion VND, an increase of 10.92% compared to 2023. The milk tea market is no exception, with strong growth as Vietnam is the third largest market in Southeast Asia, with a scale of more than 360 million USD (equivalent to 8,500 billion VND). Along with that, the number of F&B stores in Vietnam has also increased strongly, reaching 317,299 stores in 2023, an increase of 1.26% compared to the previous year.
Entering 2025, the Vietnamese milk tea market is expected to witness fiercer competition, as brands diversify their products – especially healthy ones – and optimize their online sales channels. In that context, only brands that are flexible, creative and constantly innovating can maintain their advantage.
In 2025, Phuc Long aims to enhance customer experience with a comprehensive upgrade strategy. The store system will have a new, more modern look but still retain the brand identity. At the same time, Phuc Long continues to expand its scale, focusing on strategically located premises, increasing recognition and commercial value. Not only improving the physical space, the brand also promotes enhancing customer experience from online platforms to in-store services, ensuring that every touchpoint brings complete satisfaction.
The company aims to achieve growth of VND1,910 billion to VND2,200 billion, equivalent to a year-on-year growth of 18% to 36%. Phuc Long will continuously improve and innovate products and enhance experiences to serve customers better and better.
Source: https://www.masangroup.com/vi/news/market-news/Vietnams-milk-tea-market-Intense-competition-and-the-rise-of-domestic-brands.html
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