Beverage chain Phuc Long’s revenue plunges 14%

Phuc Long’s pre-tax profit declined by a third to VND63 billion.

In the first six months its revenue fell 4.6% year-on-year to VND780 billion, while pre-tax profit dropped 8.5% to VND128 billion.

Masan said in a note that the setting up of new Phuc Long stores and kiosks was facing difficulties as the food and beverage sector as a whole reported challenges.

Last year Masan closed 150 Phuc Long kiosks in the second half of the year and only focused on opening new flagship stores.

Masan initially expected the kiosk model, in which Phuc Long products were sold in small spaces inside WinMart retail stores, to make Phuc Long the biggest tea and coffee company in Vietnam.

But the group last year admitted that the model did not bring about the expected results.

Flagship stores accounted for more than 73% of Phuc Long’s VND1.5 trillion in revenues last year, implying that kiosks only brought in a minor amount of cash.

Masan is now trying a new model in which the kiosks are tasked with making online orders when nearby flagship stores are overloaded.

The company wants to open 25 new Phuc Long flagship stores by the end of the year.