A reputation can take years to build but seconds to break. Following a mega-deal with Masan Group, Lam Boi Minh, founder of the Phuc Long Coffee & Tea brand, spoke with VIR's Thanh Van about his expectations for the future of Phuc Long while taking a look back at the 50-year-old brand.
Masan Group’s active engagements in mergers and acquisitions has helped it gain entry into new sectors in recent years and complete its retail consumer ecosystem.
Many beverage chains have been forced to close their out-of-date business models, despite being effective during the pandemic and being good for brand building.
Changes in operating patterns are taking place at many beverage chains as the number of kiosks begins to dwindle, making way for the return of flagship stores.
Many bubble tea makers are expanding their operations to conquer the domestic market, which is estimated an equity valuation of nearly $400 million.
Vietnam is a huge potential market for the bubble tea business. This drink is gradually becoming a favourite and popular drink among generations Y and Z.
With the synergy of resources from Masan’s consumer-retail ecosystem, Phuc Long has quickly scaled up its operation in terms of revenue, stores, and enterprise valuation.
The United States and Vietnam, with the high consumer demand and fast-growing markets, are continuing to be promised lands for coffee and beverage brands on both sides.
Masan's latest deal with popular tea and coffee chain Phuc Long, which led the former to acquire the majority stakes in the latter, was accompanied by experienced and long-standing partners of Viet Capital Securities.
Big-name cafe and beverage brands such as Starbucks, Highlands Coffee, and Phuc Long are promoting the development of kiosk models and closing larger stores in central areas – but it remains to be seen whether this strategy will bring long-term success.
Dealmaking in Vietnam is showing signs of recovery after a subdued year, and domestic figures are even surpassing pre-pandemic levels.
Masan has been continuously opening multi-experience stores CVLife to integrate more services from its latest acquired startup Mobicast. At CVLife stores, customers can buy necessities at WinMart+, make financial transactions at Techcombank, buy medicine and functional foods at Phano, enjoy famous Phuc Long tea and coffee, and soon use Mobicast’s digital services.
Cooperating with other brands to develop a kiosk model may not only help coffee and beverage chains save costs on opening stores, but also increase competition and create a breakthrough in market share.
Today, The Sherpa Company Limited – a subsidiary of Masan Group (HSX: MSN) – announced the signing of definitive agreements to acquire 20 per cent stake in Phuc Long Heritage JSC.
Functioning as the bridge between the northeast and Mekong Delta’s pivotal economic zones, Phuc Long Industrial Park has grown into an investor magnet in the southern province of Long An.