With the announcement to open 1,000 coffee shops in China, Trung Nguyen International (under Trung Nguyen chairman’s wife Le Hoang Diep Thao) is declaring war on its parent company Trung Nguyen Group.
|The frst King Coffee shop was launched on July 10. Photo: ttvn.vn |
Trung Nguyen International Co., Ltd. has just opened its 1,200sq.m coffee shop in theCentral Highlands province of Gia Lai. This is the first of the 1,000 high-end coffee shops across the country.
Thao said that Trung Nguyen International is developing new coffee shops serving a large customer base, mainly international tourists, which is the key to dominate the domestic market and develop franchises in international markets, including the US, China, and Singapore.
In addition, its instant coffee product King Coffee are now distributed in China, the US, India, South Korea, Singapore, and Australia. In China, King Coffee in 2017 was listed among the four best selling brands of T-Mall Super Market—one of Alibaba’s three e-commerce websites with over six million accounts. In South Korea, King Coffee has been distributed via 300 e-commerce websites and supermarkets.
Entering into competition with parent company
As the long-going divorce dispute between Trung Nguyen chairman Dang Le Nguyen Vu and Thao as well as the dispute over G7 instant coffee products shows no signs of ending, in last March Thao and China-based Hello Oyster (LaoJiao Group) jointly signed a memorandum of understanding to distribute King Coffee products in the country.
Trung Nguyen Legend Corporation (under Vu) on May 24, 2018 announced entering into a co-operation with China-based Shanghai Qinzhou Trade Co., Ltd. to distribute G7 instant coffee products in East China, including Shanghai, Hangzhou, Suzhou, and Nanjing, with the revenue target of $1.6 billion.
Both Vu and Thao focus on extending business in China and are shaping up to be direct rivals in the 1.4-billion people market.
Furthermore, nearly one month after Vu made his first media appearance at Trung Nguyen’s latest event to launch the new products and the plans to boost the development of the Trung Nguyen Legend Café chain and the E-Coffee grocery chain over the country, Thao officially opened her first King Coffee store on July 10.
Thus, Thao will compete with her husband not only in China but also in the domestic market.
Despite the fact that the winner of this battle remains uncertain, Trung Nguyen’s renown will be certainly impacted, which could cost the company business and empower its rivals.
In the middle of June, Trung Nguyen Corporation JSC asked the General Department of Vietnam Customs to temporarily halt the exports of all G7 products manufactured by Trung Nguyen Instant Coffee JSC (Trung Nguyen JSC)’s Bac Giang branch (under Le Hoang Diep Thao, the wife of the chairman of Trung Nguyen JSC) due to violations of intellectual property rights.
Additionally, Trung Nguyen Corporation JSC has also requested the market regulator to stop the domestic sales of G7 products manufactured by Thao.
On June 26, Thao responded to Trung Nguyen’s accusations, asking why the parent company (Trung Nguyen Group) accuses its own subsidiary (Trung Nguyen IC) of violating intellectual property rights and why it has repeatedly requested the authorities to slow down the export of its products.