After closing its final outlet in Ho Chi Minh City, Soya Garden is planning to develop the Soya Bistro restaurants in well-known tourism locations in Hanoi, Ho Chi Minh City.
|Soya Garden has suffered hefty losses for two years now |
In addition to serving soybean-based drinks, the newly-established outlets will also offer savoury dishes such as Japanese ramen noodles, bun rieu (crab-meat noodles), and diverse kinds of sushi. Entering the restaurant segment is good preparation as soon as the local economy and the local tourism industry will recover from the health crisis.
Accordingly, Soya Garden is accelerating cooperation with food delivery platforms and intends to partner up with food and beverage (F&B) consultants to develop the restaurants.
The move takes place right after the brand has just shut down its final beverage store in Ho Chi Minh City, while retaining only eight outlets in Hanoi. Just a few days ago, its flagship store at 325 Ly Tu Trong (District 1, Ho Chi Minh City) was filled by banners advertising that it is available for lease.
Facing fierce competition in the F&B sector and the COVID-19 lockdown, the drink brand shut down 42 stores in late 2019. To date, it has only eight stores in Hanoi, including franchise ones.
In a talk with VIR, Soya Garden’s representative said that the closing of its beverage stores and resetting focus on the newly-established Soya Bistro is part of the restructuring plan to optimise expenses for staff members and land leasing. The new strategy is necessary as food delivery is becoming common.
Local media cited a company representative saying that maintaining costly positions is unnecessary and unsuitable in the current situation. Therefore, Soya Garden decided to “close outlets located in large premises to optimise operating costs and improve the revenue”, said the company representative.
Soya Garden spent about $25,000 per month for the location at Ly Tu Trong street since 2019 as soon as the Phuc Long store chain terminated its land leasing contract there, which paid $14,000 a month for the location.
|Soya Garden was launched in 2016 and successfully mobilised VND20 billion ($869,570) from Shark Nguyen Ngoc Thuy, chairman of Egroup, through the TV show Shark Tank Vietnam 2020. |
In early 2019, Egroup poured an additional VND45 billion ($1.96 million) into the brand. As of April of the same year, Egroup’s total investment in Soya Garden hit VND100 billion ($4.35 million). Within three months of the investment, the brand opened 50 stores across the country.
However, its expansion also increased its tremendous losses. According to Soya Garden’s financial report in 2019, the startup recorded an after-tax deficit of nearly VND62 billion ($2.7 million) despite the growth in sales, from about VND96 billion ($4.17 million) of revenue, up 486 per cent on-year.