Consumerism, with a jolt of caffeine gets caffeinated

Starbucks Coffee Company, the largest coffee chain in the world, on January 31, 2013 officially opened the doors to its first store in Vietnam, following an expanded long-term relationship with Hong Kong Maxim’s Group.

The flagship store, which has been designed to reflect Starbucks 42-year coffee heritage while embracing Vietnam’s distinctive local traditions and coffee culture, is conspicuously featured on a traffic circle in the aspirational lifestyle neighbourhood of Ho Chi Minh City’s District 1.

According to Starbucks, the opening of the two-story store “marks the beginning of the global iconic brand’s Vietnam journey.” Vietnam is Starbucks’s 12th market across the China and Asia Pacific region.

“Vietnam is one of the most dynamic and exciting coffee markets in Asia and we are proud to be entering the market with Hong Kong Maxim’s Group, a close and long-term partner that shares many of the same values that Starbucks was founded on,” said John Culver, president of Starbucks China and Asia Pacific.

One day before Starbucks opened first store in Vietnam, Dunkin’ Donuts, another famous American chain for coffee and baked goods, announced it had signed a franchise agreement with Vietnam Food and Beverage Co. Ltd., to develop the brand in Vietnam.

The agreement calls for the development of Dunkin’ Donuts restaurants across the country over the next several years, with the first locations planned for the Ho Chi Minh City area. This  makes Vietnam the 33rd market for Dunkin’ Donuts in the world.

“We are excited to partner with Vietnam Food and Beverage Co. Ltd., which has a deep knowledge of the Vietnamese consumer, to open the first Dunkin’ Donuts restaurants in Vietnam,” Giorgio Minardi, president of Dunkin’ Brands International, said in a statement. “We look forward to working with them to bring Dunkin’ Donuts’ delicious offerings to guests across the country.”

Apart from Starbucks and Dunkin’ Donuts, McDonald’s, a well-known American fast-food chain, is also considering to enter Vietnam market – especially in Ho Chi Minh City, a senior official of McDonald’s revealed when visiting the Ministry of Planning and Investment (MPI) last August for studying the market potential.

Vietnam has already been attractive to international chain brands like Paris Deli, KFC, Pizza Hut and Lotteria over the past decade. So why do giant brands Starbucks, Dunkin’ Donuts and McDonald’s want to enter Vietnam market at this time but not sooner?

One reason is rising prosperity. There is no poor country in the list of markets where Starbucks and Dunkin’ Donuts have been presented so far. Starbucks in the statement noted that it “firmly believes that its success is only possible when there are thriving communities where it does business.”

The senior official from McDonald’s said in the meeting with MPI that the rapidly growing economy and increasing income of young population in Vietnam made the firm care about this market.

He revealed that a delegation of the McDonald’s Corporation last year came to Vietnam several times for studying feasibility to set up its restaurant chain in this country. The visits also aimed at learning about Vietnam’s policy for fast-food industry, franchising and its real estate market. He added the potential in Vietnam market had been bigger since the country joined the group of middle income nations in 2010.

According to Vietnam’s General Statistics Office, the average income per capital in Vietnam in 2012 was $1,600. The average income per capital in Ho Chi Minh City, where there brands are planned to debut, was $3,600 in 2012. Certainly, when the income increases, the purchasing power in the market also increases.

“The market presents tremendous opportunity for Starbucks over the long term. Ho Chi Minh City is our first stop and we aim to open our stores in key metropolitan cities across Vietnam, including Hanoi, in the future,” John Culver from Starbucks said in the statement. Culver, on the occasion of the opening in Vietnam, even told media Starbucks could open hundreds of stores in this market.

For Dunkin’ Donuts, it may have experience in penetrating into Vietnam market as its sister brand, Baskin-Robbins, entered Vietnam in January 2012 and currently has 13 locations in the country.

“We’re delighted to bring the brand to cities across Vietnam in the years ahead, and look forward to making Dunkin’ Donuts the coffee and baked goods brand of choice for our Vietnamese guests,” said Le Hong Thuy Tien, chairman of Vietnam Food and Beverage Co. Ltd., Dunkin’ Donuts franchisee in Vietnam.

Baskin-Robbins, the world’s largest chain of ice cream speciality shops, signed a master franchise agreement with Blue Star Food Corporation, a Vietnamese food manufacturing company, to develop the brand in Vietnam.

The agreement calls for approximately 50 Baskin-Robbins restaurants to be opened in that country over the next several years.