The Starbucks Journey in Vietnam

Summary

In this interview, Patricia Marquez, the leader of Starbucks in Vietnam, shares her journey of establishing the brand in the country. She discusses the challenges of breaking into a coffee culture dominated by local preferences, the company’s strategies for localizing its offerings, and how Starbucks has integrated into Vietnamese daily life. Patricia also reflects on the brand's resilience during the pandemic, emphasizing the importance of customer loyalty and the role of digitalization in Starbucks' continued success in Vietnam. Looking ahead, she highlights the company's commitment to long-term growth and its evolving presence in the Vietnamese market.

Takeaways

• 😀 Patricia Marquez moved to Vietnam 12 years ago after being contacted by a friend to help with Starbucks' operations, capitalizing on the challenges faced by the fashion industry during the 2008 financial crisis.
• 😀 The first Starbucks store in Vietnam opened in 2013 at the back of the New World Hotel in Ho Chi Minh City, and it took time to convince landlords to sign long-term leases, a departure from the short-term contracts typical at the time.
• 😀 Starbucks successfully integrated into the Vietnamese culture by aligning with the country's strong coffee house tradition, offering a comfortable 'third space' for customers to gather.
• 😀 The Frappuccino and limited-time offerings played a major role in drawing in Vietnamese customers, keeping them engaged with the brand through frequent new product introductions.
• 😀 Starbucks stands out in Vietnam not only because of its global brand recognition but also through its focus on offering a variety of international coffee beans and localized offerings that cater to local preferences.
• 😀 The brand's growth during the pandemic (2020-2021) highlighted the strength of Starbucks' loyal customer base, especially in the wake of supply chain challenges and the shift to home delivery.
• 😀 The pandemic accelerated digitalization, with Starbucks leveraging technology through apps, digital loyalty programs, and the integration of local payment platforms like Momo to enhance customer experience.
• 😀 Vietnam’s young, tech-savvy population is embracing digital innovations in consumer services, and Starbucks continues to push boundaries by using technology to improve customer convenience, including advance ordering and pickup.
• 😀 Starbucks' long-term growth strategy in Vietnam involves expanding into suburban areas and second-tier cities, focusing on community integration rather than just high-traffic commercial districts.
• 😀 The company sees its future in Vietnam as promising, with continued expansion across provinces and cities, emphasizing long-term relationships with both customers and local employees, contributing to the development of local talent.

Q & A

What was the initial reason Patricia Marquez moved to Vietnam and joined Starbucks?

Patricia Marquez moved to Vietnam 12 years ago due to a recommendation from a friend in the coffee industry. At the time, the fashion industry was struggling after the 2008 financial crisis, so she saw an opportunity to help a friend with his coffee business in Vietnam, which led her to Starbucks.

What was one of the early challenges Starbucks faced when entering the Vietnamese market?

One of the main challenges Starbucks faced was convincing landlords to accept long-term leases, as commercial spaces were typically rented on short-term contracts, making it difficult for Starbucks to secure the necessary real estate.

How did Starbucks integrate into Vietnamese culture despite the local coffee culture?

Starbucks integrated into Vietnamese culture by offering a 'third space' for customers to meet, which aligned with the social aspect of coffee drinking in Vietnam. Additionally, products like the Frappuccino became popular, and limited-time offerings kept customers engaged with the brand.

What sets Starbucks apart from local coffee brands in Vietnam?

Starbucks stands out by offering a variety of coffee beans from around the world, which local brands can't replicate due to their more limited selection. Starbucks also brings international coffee flavors to Vietnam, and customers can purchase these beans to enjoy at home.

How did Starbucks respond to the challenges posed by the COVID-19 pandemic?

During the COVID-19 pandemic, Starbucks faced difficulties, such as limited access to supplies like coffee beans and disruptions in business. However, the brand's strong loyalty from Vietnamese customers helped them survive, and they saw a shift in domestic tourism, which contributed to business recovery.

How does Starbucks' loyalty program contribute to its success in Vietnam?

Starbucks has built a strong base of loyal customers in Vietnam, partly due to its loyalty program. However, customer loyalty also comes from consistently offering new products and understanding local preferences, which encourages frequent visits.

Why has Starbucks expanded its presence beyond city centers into suburban areas in Vietnam?

Starbucks expanded into suburban areas as part of its strategy to reach more customers. By offering convenient locations closer to where people live and work, Starbucks aims to serve families and local communities who may not have access to city center stores.

What role has technology played in Starbucks' evolution in Vietnam?

Technology has played a significant role in Starbucks' strategy in Vietnam, especially post-COVID. The brand has embraced digital tools like the Starbucks app, QR codes, and cashless transactions to make the customer experience more convenient and to stay competitive in the digital age.

How does Starbucks maintain a competitive advantage in the Vietnamese market?

Starbucks maintains a competitive advantage by continuously innovating with new product offerings, digital solutions, and a strong global brand. This, combined with the company's ability to adapt to local preferences and the growing demand for coffee in Vietnam, gives them a sustainable edge.

What lessons has Patricia Marquez learned from her journey with Starbucks in Vietnam?

Patricia Marquez has learned the power of the Starbucks brand and its ability to open doors, both with customers and employees. She also emphasizes the importance of long-term relationships with landlords and how employees' sense of ownership and pride in the brand contributes to the company's growth.