Phuc Long Coffee & Tea, operated by Masan Group, is set to shift its focus from WinMart coffee kiosks to the expansion of its coffee shop network in Vietnam’s most strategic cities, World Coffee Portal has reported.
The company has announced plans to open 30 to 60 new stores in Hanoi and Ho Chi Minh City, targeting sales growth of between VND1.79tn and VND2.17tn ($73.3m to $88.9m) for 2024, a year-on-year increase of between 17% and 41%.
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The decision follows a year of profitability, with a 30% increase in earnings before interest, taxes, depreciation and amortisation to VND 255bn ($10.4m) for the 12 months ending 31 December 2023.
Despite a 3% drop in net revenues to VND1.53trn, attributed to kiosk closures and reduced foot traffic, the company remains optimistic about its growth strategy.
The kiosk model was launched in May 2021 with the ambition of opening 1,000 units, but saw a significant decline, contributing 75% less to WinMart’s third-quarter revenues in 2023.
In response, Masan Group has been focusing on expanding its brick-and-mortar presence, adding 28 new Phuc Long Coffee & Tea stores in 2023 and bringing the total to 156 outlets.
To further drive revenue, Phuc Long Coffee & Tea is integrating its loyalty programme with Masan Group’s WIN membership, offering discounts and incentives.
The company also plans to enhance local store marketing and introduce new seasonal products to attract a younger demographic.
Masan Group’s investment in Phuc Long Coffee & Tea has grown substantially since acquiring an initial 20% stake for $15m in May 2021.
By August 2022, the conglomerate had increased its holding to 84%, valuing the coffee chain at $453m.
