Starbucks in Ho Chi Minh City, Vietnam: Green Mermaid Joins Asia's Biggest Coffee-Oriented City
July, 6, 2015
Motorcycle commuters never stop in front of the green mermaid whether their reasons are to go back home early after work or not. At 6 o’clock in the evening, Ho Chi Minh City’s traffics are in full swing and what you see on the streets are the hundreds of thousands of motorcycles pass by, from left to right or the other, along with some popular Toyota vehicles in between. Vietnam is not as wealthy as another socialist country, China, whose per capita GDP is nearly four times higher than the country, while both countries remain communist states, where three others: Cuba, Laos and North Korea, remain so as well. Starbucks started to settle itself in this lively city since the company opened the first store in 2013. Currently, there are 11 Starbucks stores available across Ho Chi Minh City, Vietnam’s largest commercial city.
Ho Chi Minh City, or known as Saigon among the local residents, is located the southern region of Vietnam while Hanoi, the capital of the county, is settled in the northern region. Population of overall Vietnam is about 90 million and its per capita GDP is slightly above US$2,000 (in 2014 according to World Bank Data), which might not be impressive but the growth rate of economy grew more than five percent annually over a past decade. According to Starbucks Store Locator, there are 13 Starbucks stores available in the county while 11 of them are located in Ho Chi Minh City and two are in Hanoi. It makes sense more stores available in the commercial city than in the political center, Hanoi, though there may exist some historical reasons as well.
China, another socialist country, is located just right above Vietnam. Its population is 1.36 billion while its per capita GDP is more than four times wealthier than that of Vietnam. Thanks to growing upper middle-income population in the world’s second largest economy, there are more than 1,500 Starbucks stores available throughout the country. Thailand, Vietnam’s neighbor in ASEAN community (there are Cambodia and Laos in between), which is more comparable, is located west of the country and its per capita GDP is about US$5,500 or 2.7 times higher than that of Vietnam, whose population, on the other hand, yields 35 percent more than Thailand’s. Within the Kingdom of Thailand, there are more than 200 Starbucks stores available and its store expansion is in still progress thanks to popularity of icy Frappuccino among local residents.
Asian region, including China and Thailand, still offers reasonable growth opportunity for Starbucks as well as other multi-national companies. While China is Asia’s biggest economic powerhouse, its growth is not what it used to be anymore, rather the economy is facing major slowdown before the Chinese are getting out of the middle-income trap. Though China still grows at 7 percent but may possibly grow even lower later years, where else can grow faster than that rate with such large population and sound infrastructure? In the meantime, Thailand is also experiencing slowdown of its economy thanks to unfavorable political situation across the Kingdom. With those in mind, Vietnam’s solid economy, which has been growing more than 5 percent annually over a past decade (even grew more than 5 percent during the global financial crisis in 2008-2009), cannot simply be ignored.
Starbucks in Ho Chi Minh City
Starbucks is relatively new to residents of Ho Chi Minh City as its first store just opened a couple years ago. While there are only 11 Starbucks stores available in the city, it is not difficult to find some of the stores as long as you walk along the streets to popular tourist spots or to your international branded hotel. Uniqueness of Starbucks stores in Ho Chi Minh City is that each store is spacious and some stores occupy a multi-story building, mostly up to a third level, where you can enjoy street views from a balcony or through windows. Importantly, Starbucks baristas in Ho Chi Minh City are professional and friendly while they speak reasonable English to serve global customers daily. Most stores are generally quiet, especially on weekdays, as Starbucks drinks are not inexpensive among the local residents. On the other hand, Starbucks popularity in neighboring Thailand or China is intense.
All-time favorite Caramel Macchiato (Tall size, hot) in Vietnam costs 80,000VND or $3.67 (at current exchange rate as of July 4, 2015) while Vietnamese monthly income is about US$170. It is a little surprising to see this price tag because Starbucks drinks in most Asian regions are generally relatively expensive. For instance, the same Caramel Macchiato in China and Thailand costs 31RMB or US$4.99 and 130Bahts or U.S. $3.84, respectively (according to current exchange rates of as July 4, 2015, local prices are up-to-date). Starbucks is probably not pricing its drinks based on the income level of a certain country, but maybe so; however, Vietnam’s coffee production as well as cheaper labor cost should be factored into the price equation.
In fact, Vietnam is the world’s second largest coffee exporter, right behind Brazil, and of course coffee production is a major source of income for today’s Vietnamese economy. Historically, coffee was introduced to Vietnam more than a century ago during the French colonial era. Since its introduction of coffee by French, its production and popularity slowly have grown within the country. While Vietnam’s aspirational coffee culture has been created through today, local people since then enjoy sipping home-grown coffee at one of their favorite cafes whenever they feel to do so. When you walk around Ho Chi Minh City, you will easily find plentiful stylish local cafes, including Vietnamese coffee chain, Highlands Coffee, and foreign branded coffee chains, like Los Angeles-based The Coffee Bean & Tea Leaf. Highlands Coffee, which operate 17 stores in downtown (District 1 area) is probably the favorite one among local residents as you will often see its logo-printed cups in hands while they are walking down the street. Plus, the shop offers a variety of tasty Vietnamese sandwiches at reasonable price. The competition among coffee shops, including Starbucks, seems very intense in this coffee-oriented city.
Despite Vietnam’s vibrant coffee culture and history, introduction of Starbucks Coffee into the country just happened a few years ago. In Ho Chi Minh City, everyone from local to foreign residents knows where to experience good coffee. Local people tend to like usual domestic roast coffee, which is strong but sweet condensed milk is mixed with it in a cup when served. Importantly, local coffee is reasonable. While Highlands Coffee is considered to be a part of a local higher-end coffee shop, its popular iced Vietnamese-style coffee costs just 30,000VND. Within such competitive environment, Starbucks is not just sitting behind. It is no reason Starbucks in Vietnam offers local customers its special iced Dolce coffee to respect traditional Vietnamese coffee.
Ho Chi Minh City is a coffee-oriented city. (L) Highlands Coffee is a local leading coffee house in the city and probably the leading coffee house among competitors, including Starbucks. (R) Australian Gloria Jean's Coffee as well as many other local and international coffee shops are settled in the city.
You may have tasted Vietnamese coffee in one of many Vietnamese restaurants or cafes in the United States. Some shops offer sweeter iced coffee and the others offer bitter iced coffee but mixed with sweet milk. Either way, they are said to be Vietnamese style coffee but the later one is more likely be the one you will taste when you sip coffee in a local café in Vietnam. What you may want to order if you choose to enjoy Starbucks experience in Ho Chi Minh City is Dolce Misto or Asian Dolce Latte, which are available only in Vietnam. “Starbucks Asian Dolce Latte, which had been inspired by Vietnam’s coffee culture and habits, is tasted strong yet, smooth and flavored,” said Starbucks. “This is Starbucks’ commitment to providing locally relevant offerings in the region.” Plus, they are reasonable at 55,000VND and 75,000VND (Tall size), respectively, like you would probably pay at one of local (air-conditioned) cafes nearby. It is worth a try while you also get complimentary Wi-Fi access during your stay at any Starbucks stores in Vietnam.
Although it is your choice to decide which café you would like to find a table to sit back, relax, and enjoy, which Starbucks stores you may want to visit in Ho Chi Minh City if you like to do so is probably the first store, which opened in the city in 2013. It is a flagship store and very identical. The store is vast and there is second floor available, where you can enjoy Vietnam’s typical motorcycle traffic at the roundabout in front through the large windows throughout the day. The location of this store is a little off from the center, but depending on which hotel you stay, but is nicely located between parks, many local hotels, restaurants, and residential areas. Popular tourist spot, Unification Palace is just a quarter mile away from the store.
Other stores you may want to visit, if necessary, are at De Tham or at Dong Du. Both are conveniently located in downtown while the former is settled in the global backpackers’ town, where many Western restaurants are also available around the store. Plus, this store occupies a whole three-story building that you can go all the way up to the third level to enjoy the street views from an open balcony. Since it is nearby the residential areas and parks, where local people like to rest, exercise, and play balls, you will enjoy your coffee with local people, like hard working college students. The latter is more in a commercial district yet is close to popular tourist spots, like Saigon Opera House, and most international branded hotels, including Renaissance Riverside Hotel Saigon, as well as department stores, such as Vincom Center Shopping Mall, which offer a variety of restaurants in downstairs. While these stores are not as busy as the flagship store, baristas are always very happy to communicate with you should you have any questions or so.
There are 11 Starbucks stores available in the city. (L) De Tham store occupies a whole three-story building, where you can enjoy an open balcony on the third level. This store is located nearby the residential area and baristas are very friendly to communicate with customers when it is not busy. (R) Dong Du store is located within a commercial district and most international hotels. This store is also settled in a three-story building, where you can enjoy outside views through windows.
Despite Ho Chi Minh City’s competitive coffee market, Starbucks is not probably there to compete against neighboring coffee houses. Rather, the company prefers living together with them and creating more coffee options for local residents. As always, Starbucks likes to offer a third place for local residents, who can use it as office, living room, reading place, and so on. Vietnam is Starbucks’ 12th market to enter the Asian region after India and the newest place in Asia for the company to unlock its innovative products and services. Unlike modernity-looking customers often seen in China or Thailand, who believe Starbucks is the place to attain modernity, Vietnamese are not, rather they are coffee-oriented customers, who truly look for their own best coffee in town. Starbucks cannot simply sit behind to be in a wait-and-see mode in this country. Vietnamese will soon like to figure out which coffee shops offer the best coffee, delicious pastry and sandwiches, and their favorite third place.
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