The other four leaders are Starbucks, Phuc Long, Trung Nguyen and The Coffee House.

According to research firm Vietnam Industry Research and Consultancy JSC (VIRAC), the country’s biggest coffee chains all saw double digit revenue growth in 2018.

The Cao Nguyen Coffee Service JSC, which owns Highlands Coffee, recorded revenues of VND1.6 trillion ($68.67 million) in 2018, an increase of nearly 31 percent from the previous year.

Highlands Coffee was founded in 2002 by a Vietnamese-American. In 2012, it was bought by Philippine fast food giant Jollibee. The brand takes a relatively different direction compared to competitors, focusing on coverage rather than consumer tastes.

Although the chain maintains a simple, easy-to-choose beverage menu, many of its stores can be found positioned in large buildings, commercial centers, and other prime locations.

According to VIRAC, because it had invested huge sums in shops, land and marketing, Highlands Coffee has only been really profitable in the past two years.

In 2018, the chain earned pre-tax profits of VND129 billion ($5.54 million), down slightly from VND132 billion ($5.67 million) in 2017. Despite a 31 percent increase in revenue this year, the chain’s profits fell slightly as its operating costs shot up from VND600 billion ($25.75 million) to nearly VND850 billion ($36.49 million).

Race for second place

In 2017, Starbucks reported the second highest revenue in Vietnam, but its position was usurped a year later by local chain The Coffee House with a 100 percent revenue growth 2018. According to data from VIRAC, sales of The Coffee House chain reached VND669 billion ($28.72 million) in 2018, while Starbucks was relegated to third place with nearly VND600 billion ($25.75 million).

The Coffee House does not invest in stores in premium locations, but focuses on providing a rich menu of drinks, reasonable prices, high speed wifi, spacious shops, all geared towards the young customer segment, it said.

"We aim to open about 700 stores across Vietnam in the next 5 years, which translates to around 10 new outlets each month," said Nguyen Hai Ninh, founder and CEO of The Coffee House.

While domestic coffee chains are accelerating, foreign chains have been slower to rise. After over 6 years in Vietnam, Starbucks has just 49 stores, compared to over 330 in Thailand, over 320 in Indonesia and over 190 in Malaysia.

Domestic dominance

Domestic brands Phuc Long and Trung Nguyen took fourth and fifth place in 2018, respectively

As coffee chain that also sells milk tea, Phuc Long earned more than VND470 billion ($20.17 million) in revenues in 2018, an increase of 39 percent compared to the previous year.

Originating in southern Vietnam, Phuc Long differentiates itself by offering many bold and sweet flavors typical of Southern culture.

The chain opened its first store in Hanoi this January, and has attracted lines of people waiting in front of its shop to try out its drinks.

Compared to the other coffee shop chains, Trung Nguyen’s market share has been falling. From 2015 to 2018, the chain’s revenue remained around VND300-350 billion ($12.88 million - $15.02 million), with growth negligible compared to the breakthroughs of the rest.

Trung Nguyen’s strategy is not to cater to young people, who like youthful and vibrant environments, or office workers to need space to work. It targets customers who like to enjoy coffee in quiet spaces.

With the rapid growth of coffee chains, coffee consumption by Vietnamese has also risen sharply.

According to a study by BMI Research, a subsidiary of ratings firm Fitch, consumption grew from 0.43 kg per person in 2005 to 1.38 kg in 2015. This is the highest growth rate of any global coffee exporter, and the figure is forecast to reach 2.6 kg by 2021.