Starbucks in Vietnam

I came across an interesting video by CNBC on Starbucks’ alleged struggle in Vietnam.

I agree with several points brought up in the video clip, but there isn’t much data to back up their thesis that Starbucks is struggling in Vietnam. The only corroborating data is a Starbucks store per capita. Apparently, the figure in Vietnam is much lower compared to that in our neighboring countries.

Nonetheless, there is no financial data that indicates Starbucks is struggling in our country. Moreover, Starbucks has been expanding slowly yet steadily in Vietnam.

To show that Starbucks is struggling, the video reported that the chain owns less than 3% of the market. Well, which market? If you’re talking about the market that involves every mom-and-pop shop in every province and everybody across all income brackets, then I am not surprised at the low market share. Coffee at street stalls is significantly cheaper than coffee at Starbucks and I doubt you can find the chain outside of the major cities such as Hanoi, Saigon or Danang. But Starbucks isn’t for everyone. To make the market share figure more relevant, it has to be for the upscale market. Compare Starbucks with Runam, the Workshop and stores in shopping malls, and see how the green brand fares. My experience with Starbucks in Saigon is that it never lacks traffic. It always seems popular to the citizens. The point is that the video lacks quantitative evidence to make the case.

There is one more example that I want to add regarding how Starbucks doesn’t really fit in the Vietnamese culture. We Vietnamese people like to go to coffee shops and spend hours there working or browsing the Internet. In Starbucks stores in Vietnam, you are given one Wifi code for each receipt and each code is good for two hours, I believe. Asking for one more code is possible, but if a customer forgets, it will be inconvenient for an average Vietnamese customer.

Wanna annoy your readers away? Force them to turn off ad blockers

It’s officially 2020 and I find it baffling to see websites that literally force readers to turn off ad-blockers or sign in and give away personal information before being able to read content that may not even require a subscription. Take Forbes and BusinessInsider as examples. Here is what you’ll be greeted with when arriving at a Forbes article

On BusinessInsider

There are sites that require readers to subscribe before consuming content such as The Information or Washington Post. That’s fair game. When readers subscribe, the policy brings in immediate revenue. Some prominent publishers such as Bloomberg offer a trial in the form of a few articles or a significant discount before the actual commitment. With ads, the most common result of forcing an ad-block turn-off is just views. The downside is that the audience is annoyed. We are demanding consumers. Even one more unnecessary click can affect our experience with a brand or a website. When they don’t visit, websites risk not being able to show the sponsored content.

The Internet brings frictionless access to information. Websites will re-distribute your content, if it is good, in one way or another. Asking the audience to subscribe is a risk worth taking. Forcing the audience to turn off adblocks for some views isn’t, in my opinion.

CNBC provides a respectable example of how to ask audience to turn off adblocks while giving them an option to continue on

Egregious lack of competition in the sky

I came across this short clip by CNBC on the dominance of Boeing and Airbus in the sky. The two companies are the two major players in a lucrative industry with incredible high entry barriers. They or at least Boeing has a close tie to the government as it is the second biggest vendor for government contracts.

It’s a bit ironic that Boeing enjoys the influence and the lack of the competition that it has while government officials all seem eager to publicly end the alleged monopolies of tech companies. I said alleged since it’s not really clear cut to determine whether companies like Amazon are a monopoly even though many deem it to be. I am not saying that tech companies should be allowed to function in a monopolistic competition. But if fighting to avoid monopolies and to preserve consumers’ best interest is necessary, Boeing should be one of the first companies to be scrutinized.

If you remember the saga Boeing has had with its 737 Max this year, it’s even more unbelievable to see Boeing dominate the market. Even with its position and power, Boeing still tries to cut cost and bolster the bottom line at the expense of the very utmost thing they should be responsible for: safety.

News Outlets and How NOT To Stand Up Paywalls

News websites generate revenue mostly through either subscriptions, contributions or ads. Some offer exclusive content via subscriptions such as Washington Post, some offer content for free such as cnbc, bbc and others operate as a hybrid, providing free access to most articles while holding out a select few for only subscribers.

To get readers to subscribe, you need to deliver not only great content, but also a pleasant user experience. TechCrunch has been particularly awful in this regard of late. As a frequent reader or at least I used to be, I am disappointed by their new approach. A short while ago, you could read TechCrunch with your adblock app on. Now, here is what you are greeted on the website

Unless you turn off your adblock or subscribe, you can’t even see what is available. Even Washington Post lets you see the homepage and only shows the paywall after you click on a specific article. But even after you turned off all ads blockers, the annoying message still shows up

Meanwhile, CNBC, which is another major business news outlet, takes a much more user-friendly approach with adblock

The design trick is aimed to implicitly persuade you to turn the blocker off, but you can certainly leave it on and continue reading CNBC articles.

Saigoneer, a news website that covers happenings in Vietnam, has a similar idea to CNBC, though the homepage is covered completely by this message. I turned ads blocker off a few times before I realized that clicking on the black bar will allow me to continue reading it freely.

Or news outlets can just follow what The Guardian does: offer content for free and ask nicely for contribution

Here is the success that The Guardian had from their approach

Today the Guardian has 650,000 regular paying members, 360,000 of which are recurring paying members and 290,000 pay for print papers and digital memberships, according to the publisher. In the last year, it received more than 364,000 single contributions from around 318,000 contributors. In the last three years, the title received 1 million paid donations — a mix of one-offs, recurring paying members, and print sales.

Source: Digiday

In short, I hope that whatever TechCrunch is trying to do has been working for them. Personally, I became frustrated with their paywall and since their free articles are available on other news channels anyway, I have frequented to other websites more and abandoned what used to be one of my favorite sites.

McDonald’s and Burger King’s failure in Vietnam

CNBC released a short video clip on McDonald’s and Burger King’s failure in Vietnam despite glowing success in other countries and particularly other Asian countries such as China and Japan. While McDonald’s and Burger King have struggled in Vietnam, Pizza Hut and KFC have managed to attain some success in the market.

The video mentioned the following as the main reasons for the failure:

  • A lot of substitutes at a much cheaper price from street vendors
  • Burgers don’t fit Vietnamese cuisine preference of sharing food during meals

Personally, I have lived in the US for more than two years and I can count on one hand the number of times I have been to chains such as Wendy’s, McDonald’s, Burger King or Chipotle. All of them were with friends or on our way back from trips. Burgers don’t appeal to us. We have a quite similar dish in Banh Mi, which is very delicious, quick to prepare and significantly cheaper. I lived in Danang for a year, the 3rd biggest city in Vietnam. It is half an hour of a scooter ride from Hoi An, where you can find some of the best Banh Mis in Vietnam. The price for local is about 50cents (maybe 1 dollar for foreigners), but the price at McDonald’s or Burger King’s restaurant is several times more expensive.

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Banh Mi Hoi An (Credit: Hoi An Fun Bike Tours)

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This is how Banh Mi is prepared and delivered, in about 1-2 minutes maximum. (Credit: Hoi An Tour Food)

I still remember the buzz when McDonald’s came to Vietnam the first time. People lined up to experience it. Nonetheless, when the hype wore off after a while, it comes down to whether McDonald’s offerings are competitive and whether they fit the culinary buds of the Vietnamese people. Apparently, they don’t. This is a failure of not understanding the end users’ preferences.

Towards the end of the clip, it was mentioned that McDonald’s is trying to localize the menus with Pho and Broken Rice. Well, I am not sure that will work because the same thing will happen. There are hundreds of street vendors whose product is so tasty and much cheaper than the well-known chain’s.