Café Amazon retreats, Mixue scales down in Vietnam over intense competition

Vietnam’s food and beverage (F&B) sector is seeing a wave of closures and market exits as rising competition and shifting consumer preferences squeeze profit margins.

After five years in Vietnam, Café Amazon - Thailand’s biggest coffee chain - has recently shut down its operations in the market.

A Café Amazon outlet next to the GO! supermarket in Hanh Thong ward, Ho Chi Minh City has been replaced by a noodle shop, and many of its other locations have also disappeared from Vietnam.

The brand’s Vietnam fanpage automated response also stated that it has “officially ceased operations.”

A management-level employee told local media that the stores have stopped serving customers, noting that any official announcement on the Vietnam exit must come from the brand’s owner in Thailand.

Café Amazon entered Vietnam in November 2020, opening its first store in HCMC.

Its exit from Vietnam had been widely anticipated. In a filing to the Stock Exchange of Thailand in early October, Central Plaza Hotel Public Company Limited (Centel) announced the dissolution of ORC Coffee Passion Group (ORCG) - the joint venture operating the chain in Vietnam.

ORCG is a partnership between Central Restaurants Group (Vietnam) - a Centel indirect subsidiary holding 40% equity interest - and PTTOR International Holdings (Singapore), a unit of PTT Oil and Retail Business with a 60% stake.

In its announcement, Centel explained that “the dissolution is due to the highly competitive market conditions in Vietnam, which necessitated an adjustment of the company's strategy and business objectives.”

As of August 31, 2025, Centel's carrying investment value in ORCG amounted to THB56 million ($1.73 million).

At the time of its exit, Café Amazon operated 12 stores, offering Thai-style coffee and milk tea, Vietnamese-style brewed coffee, assorted teas, and seasonal drinks. Most outlets were concentrated in HCMC and surrounding areas.

Despite being Thailand’s largest chain, Café Amazon faced stiff competition from both domestic and international players in Vietnam, including Highlands Coffee, Phuc Long, Katinat, Trung Nguyen Legend Cafe, and Starbucks. Highlands Coffee remains Vietnam’s largest chain, with 928 outlets as of end-September, and posted its highest quarterly profit in two years in Q3.

Café Amazon is one of Asia’s largest coffee chains, with over 5,000 outlets. The majority are in Thailand, mostly at gasoline stations - a model that gives it a competitive edge it lacked in Vietnam.

Inside Retail magazine said in Q2 of FY2025, the company sold more than 107 million cups of coffee, up nearly 5% from a year earlier.

The coffee chain is shifting its focus to Laos, the Philippines, Japan, Oman, and Bahrain, where it is growing through a franchise model aimed at maintaining consistent brand standards across design, quality, and service.

“The investor’s exit marks a shift in Cafe Amazon’s approach to the Vietnamese market, where competition from local and international chains has intensified,” Inside Retail wrote.

Other brands scale down

The Mixue outlet at Ha Do Apartment on Nguyen Van Cong Street, Hanh Thong ward, HCMC, has closed and been replaced by another brand. Many other Mixue locations have also disappeared from the southern metropolis.

The Chinese affordable ice cream and tea franchise said in its 2025 Interim Report that “In Indonesia and Vietnam, we are focused on optimizing existing stores’ operations to support their long-term, sustainable, and stable operations. During the reporting period, the number of stores in these two countries decreased.

“Meanwhile, we successfully expanded into the Central Asia market, opening our first store in Almaty, the most populous city in Kazakhstan.”

KrASIA, which tracks Chinese businesses, cited Cai Weimiao, executive director and head of frontend supply chain, as saying that “the company closed underperforming stores in Indonesia and Vietnam, its two largest overseas markets. As of September 30, 2024, the countries had 2,667 and 1,304 Mixue Bingcheng outlets, respectively, according to its IPO prospectus.”

Cai said the closures were part of a shift toward “refined operations” that improved efficiency, with relocated stores in both markets seeing average daily sales rise by more than 50%.

Mixue has brought overseas staff to China for training since late 2024. This year, it plans to establish a global business support center to strengthen back-end operations, according to KrASIA.

In its report, Mixue said it recorded a revenue of RMB14,874.8 million ($2.1 billion) for H1/2025, representing an increase of 39.3% as compared with RMB10,677.1 million for the first six months of 2024.

In China, Mixue has steadily grown its store network and deepened its penetration in lower-tier markets, while comprehensively enhancing the quality of store operations.

As of June 30, 2025, its extensive store network spanned over 53,000 stores worldwide, serving consumers with high-quality value-for-money products.

The fierce competition in Vietnam’s F&B sector is also reflected in the withdrawal of local brands, such as Banh Mi Oi - a modern-style banh mi (Vietnamese sandwich) chain once popular among young consumers.

On October 20, the chain unexpectedly posted a farewell message on its fanpage, stating “It’s time to close this chapter.”

The announcement drew attention as Banh Mi Oi, operated by Big Belly Co., had rapidly expanded in major cities and was considered a “new-generation banh mi” concept, blending traditional elements with a modern F&B style.

The chain’s closure notice did not specify a reason, nor did it address the fate of its existing stores or the founders’ future plans.

Layers of competition squeezing profit margins

The departure of such major brands from Vietnam has raised questions about the current F&B market.

F&B expert Nguyen Thai Binh, director of Vietnam Concepts School (VCS) specializing in F&B operations and chain development in Vietnam - highlighted three layers of competition that are squeezing profit margins in his talks with local media.

The first layer lies in the store format, he said, explaining that Café Amazon opted for large outlets with heavy architectural investment, creating cost pressures that exceeded the pulling power of the mass-market segment.

The second stems from Vietnam’s coffee culture as Vietnamese consumers visit cafes to meet friends, work, sit for hours, and enjoy the space. They are also loyal to Vietnamese flavors, which local brands understand best and leverage effectively to meet customer preferences.

The third lies in store locations and real estate, Binh said, elaborating that the past two years have been challenging: rents have remained flat without falling; consumers have tightened purse strings, reducing foot traffic; “prime” locations no longer guarantee revenue as Gen Z prioritizes experience over prestige; and competition has intensified from brands offering Instagram-worthy spaces or packaging.

Binh cited data from Q&Me - a leading Vietnam market research company - showing that 89% of Vietnamese had chosen Vietnamese coffee in the past 30 days, with iced milk coffee and drip coffee still dominating. In contrast, Café Amazon focused on international-style drinks like lattes, mochas, cappuccinos, and frappes, failing to meet the “flavor” preferences of most Vietnamese consumers.

For Mixue, he said, the company focuses on franchising to collect initial brand fees and supply ingredients, leading to rapid expansion with many outlets opening too close to each other, competing to the point of closure. This has caused significant losses for franchisees, given the high initial investment costs.

This strategy has succeeded in China but failed in Vietnam, where population density and consumer demand are lower.

The expert held that sustainable growth in Vietnam requires foreign coffee chains to follow four principles - Fit, Fast, Feel, and Finance - meaning a model that fits the market, adapts quickly, delivers a Vietnamese-inspired experience, and tightly controls costs.