Buzzed up: Customers fill up the inside space of Starbucks Coffee after the US giant opened the first of three shops in Ha Noi on July 23. Can the American-style drinks compete with locally made beverages?

by Nguyen Khanh Chi

HA NOI (VNS) — A few days after internationally-renowned Starbucks Coffee opened its first shop in Ha Noi, people still had to queue up for a cup of American-styled coffee.

"I have come because I am curious. I've heard about this brand name, but never tried it," said Nguyen Manh Ha, wondering how many people in the long queue, all of varying ages, were also curious.

"I have gotten used to Vietnamese-styled iced black coffee, which is much stronger," said the 45-year-old Ha, sipping his Cafe Latte. "If I come back, I will try another type, but not coffee."

"The Vietnamese coffee is cheap but tasty. Additionally, we do not have to think about our wallet when sitting down for a cup of coffee, which costs around VND20,000 (less than US$1).

"With a higher price [Starbucks average prices range from VND55,000 – 85,000], it's unlikely to become our daily drink, even if Starbucks beverages meet our taste and flavour expectations," added Ha, who said he has been a coffee and tea addict for some twenty years.

Located at the corner of Hang Bai and Ly Thuong Kiet streets, the shop is the first of three Starbucks outlets opened in the capital city during the final days of last month.

Joining the established chains, with Trung Nguyen, Highlands, Vinacafe, Gloria Jeans, and The Coffee Bean selling coffee in the Vietnamese market, the US cafe giant arrived in Viet Nam, the world's second largest coffee exporter, last February.

Since Starbucks opened its first coffee house in HCM City, the country's economic hub, the number of shops has now expanded to eight.

This figure looks positive, but, will the Starbucks network survive?

The Seattle-based coffee provider faces fierce competition from the already firmly-standing names, such as Highlands Coffee and Trung Nguyen, which have more than 40 and 70 outlets respectively, let alone thousands of independent cafes throughout the country.

Trung Nguyen, which opened in 1996, reported global sales of some 13 billion cups by 2013. Known as one of the leading Vietnamese coffee processors, the firm also has outlets outside Viet Nam and exports its coffee to over 60 countries.

Yet, Starbucks officials remain optimistic.

"We have been in HCM City for 18 months. And now we have opened in Ha Noi. Vietnamese consumers have embraced our products and I'm confident that we will continue to grow in Viet Nam," said Patricia Marques, general manager of Starbucks Viet Nam.

"Competition is good for everybody. Competition brings attention to that business, and, in particular, to the coffee industry," Marques noted.

"I'm sure that coffee growers are super happy that there are so many coffee shops, and so are customers. Everybody has customers. It's good for the industry and good for customers. They have one more option."

Classic cafe: Customers enjoy coffee at a newly-opened cafe in Nam Dinh Province. Viet Nam has a rich coffee culture, with coffee shops continuing to spread across the country. — VNS Photos Viet Thanh

"We are extremely pleased with the response from Vietnamese customers, both in Ha Noi and HCM City. How big a welcome we have had!" said Marques, adding that the majority of their customers were, by far, Vietnamese, and a mix between the old and young.

"We couldn't be happier with the welcoming by Hanoian customers. We see young, interesting Viet Nam as a fantastic market for us. We see Viet Nam as a great opportunity," Marques told Viet Nam News, prior to the opening of their third Starbucks outlet in Ha Noi on Thursday.

With diverse offer of sweets, cakes and others, besides drink highlights and uniquely designed stores, Marques believes her company has done their best to make Starbucks cafes become part of the local community and appealing to customers, who come not just for coffee but for the artistically decorated environment.

"We don't copy recipes from overseas. We are very local," she added.

Is that persuasive enough?

"I did drink Chai Tea Latte [a soothing blend of black tea and exotic spices combined with steamed milk] in Singapore, Hong Kong, and South Korea, and loved it. When I try it here in Viet Nam, I couldn't feel the same," said HCM City dweller Nguyen Le Hoa.

"Basically, Starbucks is not my frequent destination for drinks. I prefer something pure and strong, either tea or coffee, like Trung Nguyen coffee, without the added fatty cream," the 30-year-old woman added.

Viet Nam has a rich coffee culture, with retail coffee shops continuing to spread across the country.

Some 2013 statistics show that about seven per cent of the coffee produced by Viet Nam every year is consumed by locals. An estimated 2 million bags of coffee has been consumed domestically in the marketing year 2013/14, up 10 per cent from the previous year. Viet Nam produced up to 1.5 million tonnes in 2012-13.

"I drink black coffee with ice every morning. The habit goes back some 30 or 40 years," said an old Hanoian, lifting the cover of a coffee filter and putting some cubes of ice into the black liquid. "Sometimes I go with my wife, my friends or just myself."

"This is an old-style of coffee drinking. I enjoy waiting for drops of the coffee to fall into the cup, while watching the streets to absorb the vibrant life out there in Ha Noi's Old Quarter," said Truong Dinh Tri, feasting his eyes on the busy Duong Thanh Street in a summer morning.

"I will visit Starbucks one day. I'm quite curious," said Tri, when asked whether he would try the US-fashioned drink. — VNS