Starbucks has closed a few stores, but new names like Ten Thousand and Cotti are looking to expand, photo Le Toan

Ten Thousand, an Australian speciality coffee brand, has made aforay into Southeast Asia with a flagship store in Hanoi, inaugurated in late September in the capital’s new Lotte shopping centre.

In terms of market placement, Ten Thousand aligns itself within the same pricing bracket as its nearby Starbucks, with its signature offerings priced around $4.20 per item.

Ted Park, director of the Global FC Department at Ten Thousand, elaborated on the chain’s distinct market approach, setting it apart from other competitors like %Arabica.

“Our strategy diverges from the typical independent outlet growth. Ten Thousand embraces a franchising model, expanding speciality coffee’s reach beyond metropolitan areas into more localised settings, akin to the model Starbucks and McDonald’s adopt in the US and Australia, especially outside city centres,” he stated.

Despite a modest inception, with just one store in Australia, three in the US, and two in Taiwan, Ten Thousand ambitiously targets a global footprint of 500 stores within the next five years.

Meanwhile, Cotti Coffee, a Chinese coffee chain co-founded by former Luckin Coffee executives, is intensifying its expansion worldwide, with Vietnam one of the names dropped.

“To further solidify its supply chain prowess, Cotti Coffee is in the preparatory stages of establishing coffee bean and raw material supply chain bases in South America, Ethiopia, Vietnam, and other regions,” the chain said in August.

“By amassing global top-tier resources, the company is building a robust foundation of global supply chain infrastructure and capability to support its international expansion,” it added.

Cotti Coffee commenced operations in August last year and opened its first store in Fuzhou city of China. In less than a year, the chain has unveiled over 5,000 outlets across China, according to a World Coffee Portal report in August 2023.

That same month, the company opened new stores in Seoul, Jakarta, and Tokyo.

Plans for a second Tokyo location are already underway, alongside an ambitious foray into the North American market with three stores set to open in Toronto, as confirmed by a company spokesperson to World Coffee Portal.

Vietnam’s food and beverage market, valued at an estimated $30.7 billion in 2023 by iPOS.vn, is projected to grow to around $40 billion by 2026.

At the end of 2022, Vietnam boasted nearly 338,600 restaurants and cafés, with Ho Chi Minh City alone accounting for 39.78 per cent, almost triple that of Hanoi.

Amidst this growth, international brands’ strategies vary: some are eagerly entering the Vietnamese market, while others have revised their approaches or exited altogether, highlighting the sector’s dynamic and challenging environment.

Starbucks, having just marked its milestone 100th store opening in Hanoi in September, unexpectedly announced a month later the closure of its Dong Du store in Ho Chi Minh City’s District 1.

This move follows a series of shutdowns for the coffee giant starting in 2021, with the cessation of operations within the Rex Hotel on Nguyen Hue Street District 1, and Starbucks Press Club in Hanoi’s Hoan Kiem district.

The sequence continued as the Starbucks Lan Vien, also in Hoan Kiem, ceased operations at the end of June 2022, underscoring a strategic recalibration in its Vietnamese market presence.

Likewise, in April, Mellower Coffee, the Chinese coffee chain, announced its cessation of operations in Vietnam, marking an end to its presence in the bustling coffee scene of Ho Chi Minh City. The brand, originating from China, boasts 50 stores across the mainland, Singapore, and South Korea.

According to an F&B market survey by iPOS.vn earlier in the year, 40 per cent of businesses were optimistic about a market upswing in the latter half of 2023, while approximately the same figure anticipate tougher times ahead. Another 20 per cent predict minimal changes in the market landscape.

Vu Thanh Hung, CEO of iPOS.vn, provided a more cautious outlook. “The latter part of 2023 is likely to represent a low point for the F&B market. This year, I believe we’re going to see end-of-year holidays characterised by maximum savings from consumers,” he said.