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A bubble unlikely to burst soon

Last update: 11:04 | 13/11/2017

Customers queue up for a free promotional drink at a Sharetea outlet in Ha Noi. — Photo kenh14.vn.


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It came, it kind of burst, and it’s come back stronger.

When bubble tea, the Taiwanese tea-based beverage with chewy tapioca pearls in them, first burst on the scene in Viet Nam about 15 years ago, it was instant hit, especially among children and the youth.

But the thrill failed to last very long, and dogged by fears triggered by rumours of imported plastic bubbles being used by unscrupulous businesses, it soon became difficult to find the drink as some shops stopped serving them and some almost exclusive bubble tea outlets shut down.

Today, its one of the easiest drinks to find with an almost ubiquitous presence in major cities and several popular brands jostling for greater space in a highly competitive market.

The comeback has happened in fits and starts, but over the last two years, it has firmed its position and look set to stay. There are several factors that have helped bubble tea’s resurgence and strengthened its staying power this time around.

One is the product’s establishment packaging. There has been much heavier investment in the tea shops, showier displays and harder hitting promotions.

A boom in supporting services and products accompanying the bubble-tea wave has also helped. Some market observers say that bubble tea brands are expanding faster than other restaurant or coffee chains, especially in urban areas, thanks to their simple and franchise-friendly business model.

App promotions

The key demographic for bubble tea in Viet Nam are the youth and office workers, whose regular use of smart phones influence all aspects of their lives. Hence, many bubble tea brands have incorporated their promotions, including discount codes, into distribution applications on mobile platforms, aiming to increase brand awareness and sales.

Price reduction via discount codes has been the go to sales boosting method for almost every brand of bubble tea in the market, whether it is to push a new product or even a new brand.

Sellers can choose between short and specific periods of validation for their discount codes, aptly named golden hours, or apply such discounts during an opening week or even a whole month worth of promotion and free samples. These are designed to give customers the motivation to experience the newly introduced brands or products, which is key to hold one’s own in an increasingly crowded and competitive market.

One familiar application is Jamja, a discount codes promoting search engine with nearly a million users. The company behind Jamja has been collaborating strategically with other startups specialising in restaurant reviews and food deliveries.

Bubble tea brands have also managed to take full advantage of their customer-base to spread their image via social media in exchange for further discounts. This form of advertising has contributes greatly to the industry’s sudden surge, as it were.

Sales management

For food and beverage businesses in general and bubble tea chains in particular, cutting costs and controlling losses are extremely important, especially as the business develops into a franchise.

Without good management procedures and tools, total operational costs can be overwhelming.

With thousands of cups being sold per day, well known bubble tea brands like TocoToco, Goky, or Gongcha cannot use a manual billing service, nor any amateur, cumbersome software lacking in features like labels and bills printing, as lengthy waiting periods will lead to customers’ dissatisfaction and plummeting sale.

As these direct selling brands are increasingly competitive, they are constantly demanding more effective promotion means than their rivals by maximising positive customer experience and optimising revenues.

In response to this need, many technology companies have jumped into the fray, providing Point of Sale (POS) software to restaurants and coffee shops. With the explosion of bubble tea chains, it is an effective strategy for managers to work with such third parties to boost sales and business productivity.

One such software provider, iPOS.vn, is a partner for many big tea brands like GongCha, Tocotoco, and Royal Tea.

Additionally, more and more bubble tea brands are opting for multi-channel sales through their own websites or social media pages such as Facebook or Zalo, to varying degrees of success. The Tocotoco chain, for instance, saw the deployment of a mobile application increase daily online orders from approximately 100 to more than 1,700.

The rest

Other issues that come to focus are related to product and personnel, as bubble tea brands are currently being evaluated as being almost identical in terms of taste and presentation, and service provided by the staff fails to pull its weight.

This has lead to a demand for training centres and the use of higher quality ingredients, though few companies are looking to invest in research for creating pioneering products.

With white-collar workers who can afford higher quality drinks in sophisticated settings being the current target audience for bubble tea brands, sellers are prompted to invest strongly in both taste and presentation.

Thus raw materials and formulas are imported from Taiwan or reputable partners in Japan or Korea, and expensive central locations are chosen four bubble tea outlets. This has improved product quality and consumer safety.

The bubble tea market is now moving to its next development phase, expanding from central cities like Ha Noi or HCM City to suburban areas as well as other localities like Bac Ninh, Hai Phong and Can Tho. — VNS

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