By Andrea Ayala
American companies, which used to be closed off to the Vietnamese market have been sprouting around Vietnam since its doors opened to foreign commerce over a decade ago. Now, the first Starbucks opens in Ho Chi Minh city, and will compete with Vietnam’s rich coffee culture.
Tiffany Nguyen was excited when she heard Starbucks was coming to Ho Chi Minh City.
“Whenever we have time to travel...we just want to get like a cup of Starbucks you know[it’s] very exciting,” Nguyen said.
After living in the U.S. for a while, Nguyen missed that Starbucks siren when she moved back to Vietnam 12 years ago. She wasn’t the only one. When it launched on February 1, 2013, Starbucks’ first Ho Chi Minh City location caused a buzz across the city. When Nguyen first saw the Starbucks logo on the streets of Vietnam, she immediately logged onto her Facebook account and saw her friends commenting.
“Where is it open?” they were all frantically asking.
“I think that in Vietnam, people [were] just waiting for so long,” Nguyen said.
After defeating the Americans and their South Vietnamese allies over thirty years ago, the Vietnamese government is now inviting the Americans back.
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At 5:30 a.m. in the bustling city streets of District 1 in Ho Chi Minh City, Hoa Voa arrives to work. Voa helps set-up the store's daily offerings. Today they include tiramisu, eclairs and cheesecake. The store is scheduled to open at 6:30 a.m but outside, a line is already forming.
Customers look visibly anxious. Ten minutes early, the store opens its doors and customers flow in.
Hoa Voa may not have guessed he'd be working for Starbucks when he first tried a cup seven years ago in Singapore. But as far as he can recall, he loved it. That's why when he was offered the job after a blind interview earlier this year, he jumped at the chance.
“I know Starbucks is one of the biggest companies in the world,” Voa said.
Walking through Ho Chi Minh City, visitors are bound to see that remnant of French colonialism everywhere: coffee. Coffee is a tradition that has been around for over a century in Vietnam and its place in the culture is almost as strong as Vietnamese coffee itself.
In a city filled with hundreds of coffee shops, it may seem that the story of Starbucks—a company with a lighter, more expensive coffee than local Vietnamese brews-—will end badly, especially in the world's second largest coffee-export country.
Trong Nguyen, director of sales at HSC Securities Company in Ho Chi Minh City, disagrees. He sits in his neatly ironed slacks and long sleeve blouse at Ho Chi Minh’s elegant new Starbucks while he explains why he thinks Starbucks has a shot, and he’s not just talking about espresso. He knows Vietnamese business. He’s worked in the big business industry for years and has lived in Vietnam for most of his life, he even spent a few years living in the U.S. He’s seen countless new businesses both flourish and fail in Ho Chi Minh City.
Trong Nguyen said Starbucks is playing it financially smart. The company is taking small steps he said, (only one store was opened in all of Vietnam) and they chose the perfect time to start a business in Ho Chi Minh City.
Vietnam’s economy has steadily improved in recent years, according to the World Factbook. Since 2000, Vietnam’s standard of living has significantly increased.
“People are starting to spend... on bigger items,” Trong Nguyen said.
In other words, what would have broken the wallets of many a decade ago, is now a reasonable commodity (such as paying $3-$5 on coffee.) That is good news, especially while weighing in the fact that coffee consumption is about 1 kg per person, according to a Starbucks company spokesperson.
And if you’re going to start a business in Vietnam, Ho Chi Minh City is the place to start, assures Trong Nguyen.
That’s because Ho Chi Minh City is the most dynamic city, said Trong Nguyen. He assures that Ho Chi Minh City has always been better at adapting to new ideas than, say, Hanoi, the nation’s capital.
Starting in Ho Chi Minh City might give Starbucks the boost it needs, yet some still argue that Starbuck’s fast-paced environment might not make the cut for some Vietnamese who are used to a slower, more catered drinking and dining experience.
Local coffee has a tradition of full service, he said.
That means you order the coffee at the table after looking at a menu; the waiter brings the coffee to your table; when you are done, they clean after you, they pick it up.
“They take care [of] all the needs you want at your table,” said Trong Nguyen, a drastic difference from the long lines Starbucks has customers wait in.
Long lines are a reasonable point. They are one of the biggest complaints at the new Starbucks according to Voa, this with an average 10 baristas on duty at the same time (not including the cleaning staff) all day.
“If you have no idea, no education, you don’t know English, you can’t order the drink...maybe it feels strange to you. But [if] you’re already exposed, you went to school in the U.S....then maybe you feel more comfortable in the store.” - Trong Nguyen
“We have I [an average of] 15 people in line all the time,” Voa said.
However the long the lines may be, the customers still keep flocking in. Perhaps this is because Starbucks has taken measures to assure customers feel important in other ways.
On her second visit to Starbucks, Hoang Tran, 27, an English teacher in Ho Chi Minh City, said she hates the long lines at Starbucks, too. But while the long lines may make first-time Starbucks visitors feel like a sheep in a crowd, Starbucks is special toTran because they personalize drinks by putting the customer’s name on it. And not just that, Starbucks has variety, which for Tran is important: she doesn’t drink coffee.
To an American visitor walking into Starbucks Ho Chi Minh City, the items available for purchase might come as a bit of a surprise. Hungry? Why not grab a roasted duck wrap? Need some dessert? How about passionfruit cake? And since you’re going to need something to wash it all down with, might as well try the “Asian dolce latte,” Starbuck’s new drink, not available in the U.S.
That’s not the only way Starbucks has taken efforts to adapt to local culture. The new Starbucks features a mural design by local artists, a community table recycled from a local villa and a bicycle traditionally used to transport goods in the past as a central artwork on the store’s ground floor, according to a Starbucks press release.
“I think they’re more open...very support to new ideas, willing to listen with two-way communication,” Voa said.
Adjusting to local culture is good. But while the Asian dolce latte may be successful, it’s the brand keeping the customers loyal, said Trong Nguyen.
This is because Starbucks is a sort of statement, a symbol of status, said Trong Nguyen. The menu at Ho Chi Minh City is in both Vietnamese and English but an understanding of English makes orders easier to make. Speaking English is a sign of education.
“If you have no idea, no education, you don’t know English, you can’t order the drink...maybe it feels strange to you,” said Trong Nguyen, “But [if] you’re already exposed, you went to school in the U.S., other country, then maybe you feel more comfortable in the store and that attracts your friend, too.”
According to Voa, it is very important for baristas at Starbucks Ho Chi Minh City that they be able to speak English. Voa, who lived in New York for three years, said this is also because there are a large number of foreigners visiting Starbucks daily. About 30 percent of customers are foreign according to Voa.
However, Trong Nguyen said that if you observe closely, it’s only in the morning that well-educated businessmen and foreigners drop-in. In the evening, it’s mostly young local people.
Starbucks is also a sign of American culture, a very strong force especially among the young in Vietnam, said Trong Nguyen. The influence of the culture impact dates back to the Vietnam war era, when the U.S. was stationed in Ho Chi Minh City.
“A lot of Vietnamese are already exposed to American culture, they like it a lot, especially in terms of pop culture,” said Trong Nguyen.
This influence is stronger on Vietnamese who have travelled or even studied abroad in places such as the U.S.
Over 60,000 Vietnamese are currently studying overseas according to TNS Vietnam, a business research website. A majority of parents preferred their children to study overseas in the U.S.
“A lot of people mistakenly [think] that Vietnamese culture is very strong so the market is just for Vietnamese locals but but they didn’t know that Starbucks actually attracts...the people who are already exposed to the western culture which is students...usually these people are very high income people,” Trong Nguyen said.
In a country where the median age is 28.2 (compared to 37 in the U.S.) according to the World Factbook, a well-travelled young population can make a huge difference for business. There are currently over 20 million students in Vietnam.
This may explain why most U.S. companies wish to expand their business in South East Asia according to TNS Vietnam. By the way, 75 percent have their eye on Vietnam as their No. 1 choice for expansion.
Especially in this generation, news among the young spreads fast.
“When they line up and other people see their friend come from a very rich family line up, they will automatically line up,” Trong Nguyen said.
Having the Starbucks name on a resume is not a bad deal, either. Take Voa, who said working for Starbucks could help launch his career in the future.
“I was so happy that I know Starbucks finally came to Vietnam and they start hiring,” said Voa, who had heard rumors about Starbucks’ arrival for over two years.
His friends were ecstatic for him when they found out the news.
“They think it’s a good opportunity, and they are so happy for me working here,” Voa said.
While working for Starbucks in Ho Chi Minh city might be a symbol of status, in the U.S. Starbucks is just another minimum-wage job. When Voa told his friends back in New York about his new job, they were less thrilled.
“[In Ho Chi Minh city] Starbucks is a very, very big company but in America it’s a big company. So they were not really excited compared to my friends in Vietnam. I think this is a very good start for me,...good working experience,” Voa said.
Among its goals, Starbucks aims to encourage responsible coffee-growing traditions within Vietnam.
Starbucks currently employs over 50,000 people in the Asia Pacific region, according to the website.
Still, Starbuck’s presence is brand new and it’s tough to tell whether the store will be successful right now, said Trong Nguyen. As for him, he said while he enjoys the Asian dolce latte he won’t make a huge effort to make it out to Starbucks when he needs a cup of Joe.
“I’m a kind of a mature customer, you know ….I don’t care if it’s Starbucks or local brand or even on the street as long I have coffee.”