At the end of 2022, KIDO made a rather unexpected decision: divested from Chuk Tea & Coffee – where they contributed 61% of capital and had high hopes to “successfully capture the Vietnamese F&B market and the world”. So now who is the new owner of the F&B chain with nearly 60 stores in 5 big cities in Vietnam?

KIDO – Chuk’s fiery start-up ‘fire’ in the beginning…

TTV Trading Investment Joint Stock Company (the owner of Chuk Tea & Coffee) has a business license in December 2020. However, due to Covid-19, it was not until June 2021 that KIDO officially held a press conference to launch the new brand. At that time, because Covid-19 was still raging everywhere, they were forced to hold an online press conference. Right after that, Ho Chi Minh City entered the 3 months of the fierce Covid-19 climax.

At the launch press conference, KIDO said: Chuk (back then it was Chuk Chuk) had a charter capital of about VND 100 billion, KIDO Group held 61% of the shares. The representative of KIDO did not disclose the specific identity of the shareholder holding the remaining 39% capital contribution, only sharing: the founding members all made important contributions to the new brand.

The eldest daughter of KIDO CEO Tran Le Nguyen – Tran Tuyet Van (then 25 years old) will take on the role of General Director, with the help of Mr. Pham Cao Nghia – Deputy CEO; and Mr. Tran Le Nguyen is the Chairman. The company name is TTV.

In addition, Mr. Tran Le Nguyen does not hide his ambition to turn Chuk into the leading F&B chain in Vietnam and the world, like Starbucks has done. The goal of having 1,000 Chuk stores by 2025 is based on three things: a unique coffee – ice cream – tea combination model; taste – the color of Chuk’s food and drinks will stick to the target customers; Chuk has the cheapest franchise fee in the market, plus the parent company’s wide distribution system.

“We have been testing Chuk Chuk for over a year. The results have been very positive and this is an effective business model, because in the first year it was profitable. This is very rare for F&B chains to do.

We have also just signed a tenancy agreement for ten locations in District 1. Thanks to Covid-19, now the price of premises in this central district is only ½ compared to before, helping Chuk Chuk’s rental costs lower than other F&B chains. Moreover, many homeowners, upon learning about Chuk Chuk, also want to cooperate long distances – at least for the first 3 years. With Chuk Chuk, it is indeed ‘in danger'”, KIDO Group CEO confirmed in June 2021.    

To realize the goal of ‘successfully capturing the F&B market in Vietnam and the world’; At the end of 2021 and the beginning of 2022, Chuk has stepped up marketing by hiring singer Hoang Thuy Linh as a brand ambassador, signing cooperation agreements with Son Kim – GS25 Vietnam, Central Retail – GO!, Tops Market, BigC… Through Central Retail and GS25 Vietnam, KIDO also has ambitions to export Chuk to Thailand and Korea.

However, for unknown reasons, these two cooperation deals did not develop smoothly and seemed to have ‘dead prematurely’.

…. And gradually less ‘heat’ after more than 1.5 years

Obviously, “life is not like a dream”, the fierceness of the Vietnamese F&B market and the general difficulties of the times, made every step of Chuk extremely difficult.

As an example, they have to maintain the number of 50 to 60 stores from the beginning of 2022 to 2023 – unable to pop up according to the set plan (120 stores in 2022). After that, they had to leave the central districts – in District 1, Ho Chi Minh City, they now only have 3 large stores and 2 kiosks. At the same time narrowing the store area – currently nearly half of their stores are kiosks, mainly serving take-out (in Hanoi 7/10 stores are kiosks).

The change in brand name and store concept over the years of Chuk.

Along with changing the name – brand identity, store concept – cups, staff uniforms, Chuk also constantly changes and tests new product lines. Now, Chuk’s menu is very different from when it was first released.

According to some experts, Chuk’s problem lies in the story of poor product and brand positioning. As shared from KIDO on the first day of its launch, the Chuk Chuk brand name is inspired by Thailand’s Tuk Tuk car with the main orange color, from the store design to the product (mixture and color) are all colorful.

However, as we know, although Thai cuisine is very famous in the world, it is only in the food segment, not Beverage – drinks. Walking around 2 big cities, Ho Chi Minh City and Hanoi, we can easily name the outstanding Thai food chains, but not the drinks. Thai-style coffee is not suitable for Vietnamese people in general, and milk tea is not as prominent as Taiwan or Korea.

The big cafe Amazon from Thailand also has only 19 stores in the South after 2.5 years in Vietnam. The main marketing method of Café Amazon in Vietnam is ‘going to Café Amazon to experience Thai culture’. Not to mention, Chuk’s brand and store concept are inspired by Thai but to honor Vietnamese… agricultural products!?

The names of The Coffee House and Highlands Coffee represent the brand’s development orientation (each store of The Coffee House will be as warm as your home, while the delicious coffee growing regions of Vietnam are in the high mountains); brand positioning and unified store concept ‘honoring Vietnamese coffee culture’. Both use English names just for the convenience of later export.

In the F&B industry, product quality is a vital factor that determines how long a brand can live.

Chuk’s first menu is different and unique, unlike any other chain: there is a lot of cheese in coffee or milk tea (sometimes up to 1/3 cup) and there are strange combinations like Ổi Xá Lị Phô Mai Muối Biển và Nước Xoài Xanh Muối Ớt… It can be said that the taste (fatty – sweet – salty) from the combination of Chuk’s ingredients in the drinks is quite strong – in the spirit of the original Thai cuisine.

According to the experience of many customers, Chuk’s products at the first time were quite unique, but not really friendly to ordinary Vietnamese users.

At present, after many changes, Chuk’s menu still has tea – coffee – milk tea with many colors, but the combination of ingredients is quite familiar – more friendly such as Roasted Rice Tea, Honey Lemon Peach Tea, etc.

Innovation and creativity to win a lot of customers is not an easy story!

At the end of 2022, after reviewing the general picture, plus Chuk’s poor performance, KIDO announced to withdraw capital from TTV – Chuk. At the financial statement of the third quarter of 2022, KIDO is investing VND 308 billion in TTV.

KIDO (KDC) profit after tax was only 5 billion dong in the fourth quarter of 2022 – down 97%, nearing the bottom in 10 years. Accumulated in 2022, their net revenue reached VND 12,519 billion, profit before tax reached VND 510 billion, profit after tax reached VND 374 billion – down 42.7%.

However, at present, the legal representative of TTV Trading Investment Joint Stock Company is still Mr. Tran Le Nguyen. Accordingly, it is possible that TTV – Chuk has not updated the representative or new owner, or Tran Le Nguyen’s father and son and the remaining Shareholders spend their own money to continue to feed and find a way out for Chuk. According to the information we have, Mr. Pham Cao Nghia is still the main executive of Chuk Tea & Coffee.

Source: Market Times