A subsidiary of the Masan Group conglomerate has signed an agreement to acquire a 20 percent stake in tea shop chain Phuc Long Heritage Jsc.
Masan’s The Sherpa Company Ltd will pour $15 million into the company, established last week to own the Phuc Long brand, which is among the most popular beverage brands in Vietnam with 82 stores nationwide.
The deal puts Phuc Long Heritage’s valuation at $75 million.
It will help establish Phuc Long kiosks in over 2,200 VinMart+ convenience stores to provide tea and coffee to consumers.
In the last three months, four pilot kiosks have been opened in Ho Chi Minh City and another 1,000 will be set up in the next 18-24 months.
“I believe that in combining the Phuc Long products and VinMart+ network of more than 2,200 stores today and 10,000 stores in the next five years, we will provide 100 million Vietnamese consumers with the opportunity to enjoy the freshest, most delicious tea and coffee,” said Truong Cong Thang, CEO of VinCommerce.
Each kiosk will share 20 percent of its revenue with VinMart+, adding 4 percentage points to the profit margin of the retail chain.
Vietnam’s tea and coffee market is valued at $2.3 billion and is expected to grow more than 10 percent per year, according to data from Masan, which also estimates that popular brands like Highlands Coffee, The Coffee House and Starbucks account for 25 percent of the market.