Shadowing Practice: Why Starbucks Struggles In Vietnam's $1B Coffee Market - Learn English Speaking with YouTube
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Vietnam knows its coffee.
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Vietnam knows its coffee.
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It's famous for a thick,
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heavy brew sweetened with condensed milk.
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A cup of traditional café suda is made with Robusta beans,
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which have a sharper, bitter flavor and higher caffeine content than more mild Arabica beans.
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The drink is available all over Vietnam,
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served at roadside cafes, restaurants, and at home.
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But you won't find the traditional style in a Starbucks.
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That's because most international coffee chains only serve Arabica beans,
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which are more mild than Robusta beans.
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And while that may work for customers in many countries,
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in Vietnam serving only Arabica is a problem.
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It's one reason big coffee chains have struggled to grow there
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despite the country's more than $1 billion market for specialty coffee and tea shops.
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Starbucks is a global brand with more than 30,000 stores around the world.
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Australian chain Gloria Jeans Coffees has close to 760 cafes in over 55 countries.
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But they haven't cracked the market in Vietnam.
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Gloria Jeans exited Vietnam entirely in 2017,
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after 10 years in the market.
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While Starbucks has grown since it entered Vietnam in 2013,
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the number of Starbucks per capita is low compared to neighboring markets.
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There is just one Starbucks per 1.7 million people in Vietnam.
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That means the competition is fierce as international chains go head to head with local chains.
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On the whole, local chains are expanding faster and performing better than their international counterparts.
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With its long coffee history and abundance of high-quality joe on every corner,
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coffee in Vietnam is a way of life.
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With mom-and-pop coffee shops still occupying a large share of the coffee market in Vietnam,
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a big question remains.
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Do international chains stand a chance in Vietnam?
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Living in the world's second largest coffee exporter,
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Vietnamese people have tons of local options when it comes to coffee.
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The market is highly fragmented,
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with small family-owned and independent shops making up the bulk of coffee sales.
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There are over 540,000 restaurants in Vietnam,
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and over 430,000 of them are street stalls.
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Even the five largest coffee chains in Vietnam collectively hold just a fraction of the market — 15.3%.
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The popular Highlands coffee tops the list with 7.2%.
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Filipino fast food giant Jollibee has a majority stake in Highlands.
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And even though Starbucks holds the number two spot in sales,
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it's still less than 3% of the entire coffee market in Vietnam.
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At those small roadside shops,
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coffee costs less than a dollar.
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They're fast, and some provide services like Wi-Fi and shoeshines.
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And their biggest advantage?
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There are thousands of them.
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Analysts say a cup of coffee at a Vietnamese Starbucks typically
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costs substantially more than a similar drink at a local chain like Highlands.
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In general, Vietnamese consumers spend about two and a half times more money at Western outlets than they do at Asian outlets.
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office workers are able to afford a cup of Starbucks coffee,
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they are also willing to pay a premium for Starbucks' unique in-store experience.
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And especially so if it's like a way to pamper oneself every once in a while.
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And on the other hand,
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the local coffee players would of course enjoy higher purchasing frequencies as the coffee is much more affordable than a Starbucks coffee.
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Vietnam has developed rapidly over the last 30 years from one of the world's poorest countries to a lower middle-income country.
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The middle class is growing too,
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but it's still small compared to other countries.
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Part of Gloria Jean's problem in Vietnam was failing to recognize
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that middle to upper class consumers were still a relatively small segment of the population.
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And I think that when the international brands,
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when they come to Vietnam,
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they bring very new coffee enjoyment to cultures.
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But at the same time,
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we still love our tradition.
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Vietnam's economic transformation is thanks to a policy called Doi Moi,
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which was a series of economic and political reforms that led to rapid growth.
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It also introduced a set of policies that encouraged international companies to set up shop in Vietnam.
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Despite strong population growth and urbanization,
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Vietnam is predominantly agricultural and rural.
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Outside of cities, experts say coffee culture looks a little different.
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It's easy to say Ho Chi Minh City,
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Saigon is the focus of coffee consumption
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or Hanoi is the new focus of coffee consumption or some of these growing cities on the Central Coast,
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these are coffee-consuming cities in Vietnam.
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But to do that is to forget
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that there's a lot of people who don't live in those cities
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and there's a lot of people in Vietnam who don't have the money to spend at even a Chung Win
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or a Highlands cafe, which are relatively expensive compared to those street-side cafes or a local cafe.
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There are two main types of coffee being traded internationally, Arabica and Robusta.
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is famous for its Robusta coffee,
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which has a sharper flavor and a higher caffeine content than the more mild Arabica bean.
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Most coffee consumed from chains in the U.S is brewed from Arabica beans.
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Robusta beans typically cost less than Arabica beans because producing them is less resource-intensive.
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In Vietnam, Robusta beans account for about 97% of the country's total coffee production.
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But international chains like Starbucks and Gloria Jeans have long shunned the use of Robusta beans.
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It's perceived as a lower quality,
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cheaper alternative to Arabica, and is often used in instant coffee and espresso blends.
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But most Vietnamese consumers look for the taste and energy bolt of high-caffeine Robusta beans.
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Not to mention the fact that many drinks sold at international chains,
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like lattes and flat whites,
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don't resemble anything close to traditional Vietnamese coffee.
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Vietnamese coffee offers more variety than just cafe suda.
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There are varieties made with egg yolk, yogurt, and even fruit.
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While some chains attempted to adapt to local tastes,
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they didn't go for it 100% of the way.
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For instance, Gloria Jean's added condensed milk to replicate traditional drinks.
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But it still served Arabica bean coffee,
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which lacks the punch of Robusta.
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Starbucks also added Arabica bean coffee with condensed milk and ice to its menu.
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This is just anecdotal, but my friends in Vietnam,
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when they walk into a Starbucks,
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There's really nothing that they want to drink on the menu, right?
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There's nothing that resembles Vietnamese coffee.
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So I think some of it is familiarity.
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But there's a shift in some corners of Vietnamese coffee culture thanks to the so-called third-wave coffee movement.
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That's a global coffee trend that focuses on quality and sourcing of the coffee bean.
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Third-waivers in Vietnam, for example,
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are experimenting with the Arabica bean to add variety to their coffee habit.
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In Vietnam's urban centers like Ho Chi Minh City and Hanoi,
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analysts say the interest in third-wave coffee and specialty cafes is on the rise.
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But it's still a small portion of the population.
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But there's still a lot of people who aren't
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that kind of consumer and they aren't at that class level or socioeconomic status yet.
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So I think you're right.
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There's a lot of street-side coffee consumption,
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local cafes, and that, you know,
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those are They're still small pieces of the market,
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but they're important pieces of the market.
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And menu differences between local and international chains go beyond just the type of being.
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I think local chains understand the customer much better than international chains,
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and hence they are more responsive to adopting change when customer preference evolves or shifts.
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So I think this flexibility of the local chains over the international has been reflected in the frequency of changing the menus.
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For example, I say that Mule Farm tea or peach tea was super popular three or four years ago.
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And then the local chains like Highland Cafe or the Coffee House,
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the two most popular coffee chains at the moment,
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they were very prompted to include their favorite drink into their menus.
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In Vietnam, some of consumers' top reasons to visit Western chains are to try something new,
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celebrate a special occasion, or treat themselves.
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Asian chains are visited due to convenient location and good value for the price.
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In other words, Western outlets are visited less frequently than Asian outlets across the board,
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according to research firm Decision Lab.
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When locals do go to international chains to spend a lot on fancy coffee,
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they're also paying for the experience.
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Analysts say a recognizable brand name and Instagrammable experience draws in curious customers.
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Its high profile brand may have been what set Starbucks apart from some of its other international competitors.
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Starbucks brand recognition gives it an edge on other foreign chains in Vietnam.
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So coffee bean and tea leaf has not been doing very well in Vietnam.
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And the key reason is that coffee bean does not have a unique brand position in the country.
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So from a price perspective,
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coffee bean is not as affordable as local places like Highlands coffee
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and neither does it offer as many seasonal drinks or events like Starbucks in order to justify a price premium.
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Starbucks' loyalty program and smartphone app also appeal to young, tech-savvy Vietnamese consumers.
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Starbucks' unique and welcoming environment remains one of its distinguishing features in a crowded market.
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While Starbucks doesn't break out financial results by country,
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country, it's been adding new stores in Vietnam,
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slowly and steadily building its presence there.
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So what does the future look like for international coffee chains in Vietnam?
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Vietnamese Gen Z consumers, who were born between 1994 and 2002,
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spend a higher proportion of their money on eating out — about $40 a month.
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They're also more likely to try foreign chains.
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But there is bad news for coffee chains.
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generation drinks more tea and milk than coffee.
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According to research firm Decision Lab,
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Gen Z consumers are responsible for the boom in bubble tea in Vietnam,
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a product most international coffee chains don't offer.
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And local chains have another advantage here.
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It's easier for them to adapt their menu quickly to local tastes.
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Vietnam is a coffee market full of challenges and competition.
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And it's not just the type of bean that international chains can change to appeal to consumers.
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Thank you.
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Context & Background
The video titled "Why Starbucks Struggles In Vietnam's $1B Coffee Market" discusses the challenges faced by international coffee chains, particularly Starbucks, in penetrating the Vietnamese coffee market. Vietnam is renowned for its unique coffee culture, heavily leaning towards robusta beans which are stronger and richer in caffeine compared to the Arabica beans favored by many international chains. Despite Vietnam's burgeoning economy and the enormous coffee market worth over a billion dollars, local coffee shops maintain a significant portion of consumer loyalty, rooted in affordability, tradition, and taste.
Top 5 Phrases for Daily Communication
- Café giàu vị: Rich coffee (used frequently to describe the bold flavor of traditional Vietnamese coffee)
- Uống cà phê ở quán vỉa hè: Drinking coffee at street-side cafes (a common practice in Vietnam)
- Thưởng thức cà phê: Enjoying coffee (often used when discussing coffee culture)
- Cà phê có mùa đông: Seasonal coffee (referring to specialty coffee that changes with the seasons)
- Dịch vụ Wi-Fi miễn phí: Free Wi-Fi service (an appealing feature in coffee shops for young consumers)
Step-by-step Shadowing Guide
If you're looking to improve your English pronunciation and communication skills using the shadowing technique, here’s a tailored guide based on the video’s content:
- Listen Actively: Start by watching the video carefully. Pay attention to the speaker’s tone, emotion, and pronunciation. Note how they emphasize specific words related to coffee culture.
- Break Down Phrases: Identify the key phrases from the transcript (like the ones listed above) and repeat them out loud. This will help you mimic the intonation and rhythm of natural English speech.
- Practice Shadowing: Play the video again, this time speaking simultaneously with the speaker. Try to match their pace and pronunciation. Focus on articulating the unique sounds and rhythms of the English phrases.
- Record Your Voice: Record yourself while shadowing. Playback your recording to identify areas where your pronunciation differs from the speaker’s. This reflection is crucial to understanding how to improve.
- Engage in English Speaking Practice: Use the learned phrases in conversation. Whether with friends, in practice sessions, or online exchanges, applying your knowledge in real dialogues is essential for mastery.
Using the shadowspeak approach not only aids in improving pronunciation but also helps deepen your understanding of conversational nuances. With consistent practice, you will notice a remarkable improvement in your English speaking skills.
What is the Shadowing Technique?
Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.
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