Viet Nam's first Starbucks Coffee store in HCM City. Following the appearance of Starbucks in Viet Nam in February this year, the race for market share in the domestic coffee industry is hotter than ever. — File Photo

HA NOI (Biz Hub)— Following the appearance of Starbucks in Viet Nam in February this year, the race for market share in the domestic coffee industry is hotter than ever.

Recognising that boosting domestic consumption is highly lucrative, domestic coffee makers have tried to outdo one another by introducing their own new products.

In late April, G7-X2, the latest product from Trung Nguyen coffee, made its debut.

Also in April, the Passio Coffee chain opened another shop in HCM City, raising the total number of its shops nationwide to 11.

Even retailer Saigon Co.op has released a new three-in-one instant coffee product under the Co.op Mart brand. Co.op Mart Deputy General Director Nguyen Thanh Nhan said the demand for instant coffee is increasing and Co.op Mart had a chance to co-operate with suppliers to launch its own brand.

Experts predict that domestic coffee consumption will increase sharply, contributing to gradually reducing raw coffee exports and promoting coffee processing, therefore raising the value of domestic coffee.

Statistics from the International Coffee Organisation (ICO) show that Viet Nam's coffee consumption continued to increase, from 48,000 tonnes in 2005 to 94,980 tonnes in 2011.

The increase was the result of European-style coffee brand marketing strategies and a positive response from consumers.

However, according to the ICO, Viet Nam's annual coffee consumption per capita of 1.08kg remains low, compared to that of Brazil (5.2 kg), the EU (4.83 kg) and the US (4.13 kg). This means big opportunities remain for Vietnamese coffee producers.

Starbucks Viet Nam has surpassed expectations after opening its first outlet in February in HCM City, the company's country head says.

"We have been humbled by the support and love we have seen from our Vietnamese customers, right from our opening day on 1 February," said Patricia Marques, General Manager of Starbucks Viet Nam.

She declined to provide any specific sales figures to back up her claim.

Marques said many Vietnamese customers have chosen the global coffee shop chain's only outlet in the country as a gathering place where they can chat, meet friends or even work, and "we could not be happier about it."

She said Starbucks is committed to a long term presence in the country and plans "thoughtful, disciplined growth that sets up for success over time."

Asked about challenges that the company has faced in the Vietnamese market, Marques said "we want to see these more as opportunities to better integrate into the local community."

She said they were "learning new things from Viet Nam's coffee heritage and culture".

Marques responded to comments that Starbucks coffee is not as good as Vietnamese coffee and that its prices and style do not suit local tastes by saying they are committed to delivering a "locally relevant" experience.

Viet Nam is the 12th market that the company has entered in the Asia Pacific region. — VNS