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The KAfe, Coffee Inn died young, but milk-tea chains thriving

While a few coffee chains have had to close, milk tea chains have become popular, especially in the north.


The KAfe, Coffee Inn died young, but milk-tea chains thriving

The KAfe, Coffee Inn and Saigon Café recently shut down, following the closure of big foreign chains Gloria Jean’s and NYDC in recent months. 
Discouraged by the departure of such chains, many investors have postponed their plans to open new shops.
Meanwhile, more and more milk tea chains have been established, especially in the north and in Hanoi. This has been a surprise to analysts, as the north is a conservative market where people prefer coffee to sweet drinks like milk tea.
It is estimated that 170 milk tea brands have appeared in the market so far this year, both privately branded and franchised ones.
While a few coffee chains have had to close, milk tea chains have become popular, especially in the north.


Unlike the ‘milk tea waves’ in previous years, this year witnesses the mushrooming of  milk tea shops in non-Hanoi provinces, especially in Bac Ninh, Hai Phong, Quang Ninh and Phu Tho. 
In Bac Ninh alone, 30 milk tea brands turned up in the market in March and April with hundreds of shops, both small kiosks to larger shops (15-20 tables).
Ding Tea is the best known brand with 100 sale points, followed by Toco Toco with 50 shops. Other brands have been present in the market for a long time, such as Chatime, ChaGo and ChaChaGo. 
Other milk tea chains, franchised ones, such as Bobapop, Citea Fund and Blackball, have been expanding rapidly in the capital city. GongCha and TraTien Huong originated from HCMC, and have also landed in Hanoi.
Amy Truong, the owner of Toco Toco, said milk tea is suitable to different groups of consumers, from youth to office workers.
Two brands, which have just appeared, have been developing at a fast pace – Goky and Mr.Good Tea. Goky has more than 100 shops after five months of operation, while it plans to open six more shops in May. 
Meanwhile, Mr. Good Tea has more than 20 sale points after half a year of making its debut, not only in Hanoi, but in many other northern provinces.
Analysts said there were two reasons that had made milk tea become the favorite investment field.
First, investors don’t have to spend too much money on shop decoration, setup, staff and formula. Second, milk tea is said to bring big profits. Sources said VND2,000 worth of tea powder is used in a glass of milk tea priced at VND20,000.
“It seems that it is now easiest to sell milk tea,” the CEO of a beverage chain said. However, he warned that those who want to jump into the market will have to compete with dozens of existing brands.


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Thanh Lich