Vietnam’s milk tea market has never been more dynamic. What started as a popular beverage among young consumers has evolved into a billion-dollar industry, attracting both local and international brands. Competition among major players has intensified as they race to expand their networks, enhance customer experiences, and improve product quality to secure a strong foothold in this promising market.
Fierce Competition Among Major Brands
The year 2024 witnessed intense competition between domestic and international milk tea brands in Vietnam. Leading names such as Phúc Long, Katinat, and Phê La continue to innovate and refine their business strategies. Phúc Long attracts customers with high-quality tea and premium in-store experiences at prime locations. Katinat stands out with its modern, aesthetically pleasing spaces, catering to young customers who enjoy social media-friendly environments. Phê La, on the other hand, differentiates itself with specialty oolong tea, appealing to traditional tea enthusiasts.
Recently, a well-known Chinese milk tea brand has begun expanding into the Vietnamese market, further heating up the competition. With strong financial backing and rapid expansion strategies, this brand has successfully penetrated multiple countries across the region. Facing this new challenge, domestic brands must continuously improve product quality, enhance customer service, and innovate to maintain their market share and reinforce their brand presence in Vietnam’s milk tea industry.
Phúc Long’s Commitment to Value Creation and Remarkable Growth
With nearly 60 years of heritage, Phúc Long has not only continued to offer authentic, high-quality tea but has also significantly expanded and upgraded its store network. Since joining Masan Group, the brand has made notable strides in growth and transformation. As of March 2024, Phúc Long Heritage (PLH) operates more than 235 stores nationwide. The company reported net revenue of VND 1,621 billion in 2024, reflecting a 5.6% year-over-year increase.
Notably, 11 renovated stores recorded an average daily sales growth of 13.4% in the dine-in segment, proving that store upgrades and enhanced customer experiences play a crucial role in driving revenue growth.
Phúc Long's store renovation strategy has focused on creating a modern yet warm and inviting atmosphere, with refreshed color schemes and an improved in-store experience. This initiative has yielded remarkable results, with net profit after tax (NPAT Pre-MI) surging more than fourfold compared to the previous year, reaching VND 97 billion. The company’s net profit margin rose to 7.6%, showcasing significant operational efficiency improvements.
According to iPOS.vn, Vietnam’s food and beverage (F&B) market is projected to exceed VND 655 trillion in 2024, reflecting a 10.92% increase from 2023. The milk tea sector is no exception, with Vietnam ranking as the third-largest market in Southeast Asia, valued at USD 360 million (approximately VND 8,500 billion). Additionally, the total number of F&B establishments in Vietnam grew by 1.26% year-over-year, reaching 317,299 outlets in 2023.
Looking ahead to 2025, Vietnam’s milk tea industry is expected to witness even fiercer competition as brands focus on product diversification, particularly healthier tea variants, and optimize their online sales channels. In this competitive landscape, only agile, creative, and constantly evolving brands will maintain their market leadership.
In 2025, Phúc Long aims to elevate customer experiences through a comprehensive store transformation strategy. Stores will be modernized with a refreshed brand identity, while still preserving the brand’s signature elements. Expansion efforts will prioritize strategically located stores, increasing brand visibility and commercial value.
Beyond physical store enhancements, Phúc Long will also upgrade its customer experience across digital platforms and in-store services, ensuring seamless and satisfying interactions at every touchpoint.
For the year ahead, Phúc Long has set an ambitious goal of achieving net revenue between VND 1,910 billion and VND 2,200 billion, representing a growth rate of 18% to 36%. The company remains committed to continuous product innovation and service enhancements, ensuring that customers receive the highest quality tea experience in Vietnam’s rapidly evolving beverage market.