|Masan Group and Phuc Long will open Phuc Long Kiosks at VinMart+ stores |
Phuc Long Heritage owns the Phuc Long brand, one of the leading tea and coffee brands in Vietnam. The purchase price of the transaction is $15 million.
As a part of the transaction, VinCommerce entered into a strategic cooperation agreement with Phuc Long to jointly develop Phuc Long Kiosks through a network of more than 2,200 VinMart+ stores nationwide. These Phuc Long Kiosks at VinMart+ will not only brings fresh and delicious tea and coffee drinks to 100 million Vietnamese consumers but also play an important part in converting each of the VinMart+ stores into a destination that satisfies the daily essential needs of consumers of all ages.
“After 50 years of experience growing and developing the highest quality of tea leaves and coffee beans coupled with relentless innovation and strong passion, the Phuc Long team has created for consumers coffee and tea drinks with unrivalled quality. We are proud to have achieved important milestones in our first phase of development – building a network of 82 stores and the Phuc Long brand that is trusted and loved by consumers, especially the youth. I believe that in partnering with Masan, Phuc Long will unlock the next phase of growth and continue to offer Vietnamese consumers high-quality products and delightful experiences in enjoying tea and coffee drinks while making Phuc Long a long-lasting brand for many generations,” said Lam Boi Minh, founder of Phuc Long Heritage JSC.
Currently, Vietnam’s tea and coffee market value is estimated at $2.3 billion and is expected to grow more than 10 per cent per annum. However, branded tea and coffee retail chains, including popular brands such as Highlands Coffee (over 300 stores), The Coffee House (over 150 stores), and Starbucks (over 70 stores), only account for 25 per cent of the market.
Given a young consumer base looking to try innovative products and services, both Masan and Phuc Long believe that branded tea and coffee chains will explode in the next decade. With the pilot results of Phuc Long Kiosks in Ho Chi Minh deployed in the last three months, both parties are confident they can achieve the target of 1,000 Phuc Long Kiosks in the next 18-24 months.
“As two Vietnamese power brands who synergise their strengths, VinMart+ and Phuc Long are proud to serve Vietnamese people by uplifting their material and spiritual lives. Masan highly appreciates the achievements of Phuc Long, as well as the passion and enthusiasm of its founder, Lam Boi Minh. I believe that by combining the Phuc Long products and VinMart+ network of more than 2,200 stores today and 10,000 stores in the next five years, we will provide 100 million Vietnamese consumers with the opportunity to enjoy the freshest, most delicious tea and coffee drinks. With the goal of serving daily essential products that meet ‘The Very Best of Fresh’ standards, we believe that each VinMart+ store will transform into a symbol of modern lifestyle, a destination for all ages, from the youth to housewives across Vietnam. In the near future, we hope to bring the Phuc Long tea and coffee brand to go global, contributing to spreading our cultural identity and promoting Vietnam’s signature drinks. At the same time, this partnership also accelerates Masan’s strategy to develop the Point of Life consumer ecosystem,” said Truong Cong Thang, CEO of VinCommerce.
According to the strategic cooperation agreement with VinCommerce, Phuc Long Kiosk will share 20 per cent of its revenue with VinMart+. Based on the results of the pilot model, this partnership will enhance the profit margin of the whole VinMart+ chain by more than 4 per cent compared to the current level.