Has Trung Nguyên Legend by Mr. Dang Le Nguyen Vu in Shanghai been profitable in less than a year?
“On September 21, 2022, in the cool breeze, crowds flocked to the Trung Nguyên Legend coffee shop in the Taiguhui commercial center on West Nanjing Road, Shanghai. More than 10 baristas in white T-shirts, dark blue jeans, were busy at coffee machines,” excerpted from an article on “Startup Media” website in China, recounting the opening event of the Trung Nguyên Legend Coffee World in Shanghai in September 2022.
Less than a year later, in an interview in June 2023, when asked the question “There’s a Trung Nguyên coffee shop in Shanghai, it’s the ‘must-go’ place when visiting Shanghai. Very crowded! But is the revenue stable or is it just for branding, sir?”
Mr. Dang Le Nguyen Vu answered: “It’s profitable, despite the significant investment.”
This information is quite surprising because the Trung Nguyên coffee shop mentioned here is located in West Nanjing Road, Shanghai, and at the time Mr. Vu answered the interview, it had only been in operation for over 9 months.
Although Trung Nguyên did not disclose the investment cost, with the location, area, and space of the coffee shop on West Nanjing Road, there is no doubt that they have invested a lot in this first shop in China.
If Shanghai embodies China’s economic dream, Nanjing Road is the busiest street in the city with over 1 million visitors per day.
The rental price of an office (1 m2) in a skyscraper on Nanjing Road ranges from 3.8 CNY to 8 CNY/day, equivalent to 400,000 – 840,000 VND/m2/month, depending on location and building. With the convenient location for business, large facade, according to a reference source, it could reach from 700 to over 800 million VND/month for an area of 500m2 like the Trung Nguyên Legend coffee shop.
Regarding interior investment, the Trung Nguyên Legend Coffee World in Shanghai covers a total area of about 500 square meters with over 150 seats and is furnished with “luxurious furnishings comparable to Starbucks stores in the US,” according to a reviewer.
“Each table set, every small corner inside the shop is meticulously decorated in a luxurious, modern, and extremely tasteful style,” the reviewer said.
Overall, the space is divided into three areas: front, middle, and back, with black and white as the main colors. From the main entrance, customers can see a delicate model of the Vietnamese Coffee Museum, surrounded by a curved bar counter where they can watch the traditional Vietnamese coffee brewing process in progress.
Going further inside, there is a coffee production area, a bar counter, and a center that combines the cultural elements of both countries.
Regarding salary expenses, according to statistics from the website www.jobui.com, the staff’s salary cost at a coffee shop in Shanghai ranges from 6,000 to 8,000 CNY/month, equivalent to 21 – 28 million VND for an employee. The number of employees at Trung Nguyên Legend West Nanjing Road is 12 (as shown in the picture) or may slightly fluctuate depending on the season and revenue.
How many years will it take to realize the dream of 1,000 franchises in China by Mr. Dang Le Nguyen Vu?
The Trung Nguyên Legend coffee shop on West Nanjing Road, Shanghai, is the first “shot” for Mr. Dang Le Nguyen Vu’s ambition of 1,000 shops in the population-intensive market.
Trung Nguyên Legend stated that through the form of franchise cooperation (franchising), they will expand and develop 1,000 shops in various provinces and cities in China. This is a significant ambition of Mr. Vu in an extremely potential market full of opportunities such as China.
Up to now, Trung Nguyên Legend has 3 coffee shops in Shanghai. On December 28, 2023, Trung Nguyên Legend opened its first franchising space at 107-109, Building 14, Libo Center, Lane 379, Nan Hong Road.
This Trung Nguyên Legend coffee shop will be the starting point for the development of nearly 130 branches across China in 2024. To achieve this plan, Trung Nguyên Legend needs to open an average of about 11 shops per month in the remaining 11 months of 2024 to fulfill the KPI for new shop openings this year.
If the plan for 2024 is completed and the speed is maintained, Trung Nguyên Legend will need over 6 years to realize Mr. Dang Le Nguyen Vu’s dream of 1,000 shops in China.