“At the beginning of last year, I signed a franchise agreement with a party from Singapore. It is possible that the store will open in March or April“, Mr. Vu Truong Giang – Founder … Ka Coffee recently revealed in a podcast episode of the Rising Vietnam series on the F&B industry in 2024.
Mr. Vu Truong Giang – Founder … Ka Coffee (middle).
Established in 2020 and currently with 4 branches in Hanoi, 1 branch in Ho Chi Minh City, … Ka Coffee is one of the pioneering F&B brands for the high-quality coffee business trend, with collaborations with Uniqlo and bringing the image of coffee bottles to the T-shirts of the Japanese fashion brand.
Sharing about the plan to “ring the bell in the land of others”, Mr. Giang said that in the Singapore market, the Luckin Coffee brand from China is almost ubiquitous with very small kiosks.
According to CNBC, as of the end of 2023, Luckin Coffee has opened 30 locations on the island nation since its appearance in March 2023. In their home country of China, Luckin Coffee has surpassed Starbucks to become the largest coffee chain, despite being established in 2017, with over 13,000 stores.
The formula of Luckin Coffee is quite similar to a successful brand in Vietnam called Mixue: franchising model, compact premises mainly for take-away sales, affordable prices, and popular products.
Regarding the popularity of Luckin Coffee in Singapore, Mr. Giang said that the party interested in franchising asked whether …Ka wants to start with such a compact model or open a large store for customer experience.
“The rent in Singapore is very expensive, it is very difficult to open a large store. However, I requested that we do the opposite of what Luckin is doing, that is, open a large store for experience. I can’t compete with brands that have many strengths in technology, apps, chain scale… so I have to position ourselves almost the opposite of them.
The rent in Singapore costs a lot, sometimes up to 200-300 million for an 80m2 two-story store, but it has to be done that way“, the owner of … Ka stated his point of view.
Talking about the plan to expand to Singapore, Mr. Giang said that …Ka might look for brands to collaborate in selling traditional Vietnamese products in the store. The rented premises are quite spacious, the business model includes both food and drinks, while the food now includes bread. In addition, the combination of brands also helps to create novelty, interest, and attract customers.
The interior of a … Ka Coffee branch. Photo: Facebook Ka.
Referring to the business situation in 2023, Mr. Giang said that thanks to opening an additional branch, the overall sales of … Ka increased. However, the average sales per store decreased compared to 2022, due to the general consumption situation in the market. Nevertheless, the profit of … Ka increased thanks to optimizing the operating process.
Regarding the plan for 2024, Mr. Giang hopes that the new … Ka branches will enter the city center instead of being located on the outskirts as they are now.
“In the retail industry in general, the clearest factor that builds a brand is the location. Over the past 3 years, …Ka has chosen to position itself in alleys, not too central to compete in terms of products. After a period of accumulation, we also have certain resources. I evaluate 2024 as the year when …Ka can expand, with the goal of entering the center“, he shared.
