(Part 3 in the series "Reading the Highlands Coffee Map")

At the end of the previous article, I posed a question: which city is bringing in the most money for Highlands Coffee — and not the city many people think it is?

Most people would answer: Ho Chi Minh City. The biggest, most populous, and most dynamic city. But when I carefully read the financial report of Jollibee Foods Corporation — the parent company that holds 60% shares in Highlands — combined with location data on Mapdy, my answer leans towards: Hanoi is giving Highlands the best profit margin, not Ho Chi Minh City.

It's not because Hanoi has more stores. It's because Hanoi is a market where Highlands has virtually no competition — and in business, a market without competitors is a truly profitable market.

To explain why, I need to tell the story of each city and put it alongside the numbers from the report.

Before delving into each market, there are some background figures I'd like to present to give this article a factual basis, rather than just subjective analysis.

Jollibee announced that Highlands Coffee's revenue growth in FY2025 is expected to be double-digit compared to FY2024. In Q3/2025 alone, EBITDA reached PHP 666 million (~$11.3 million) – the highest quarterly figure since Q3/2023, when Jollibee began reporting separately for Highlands. Same-store sales in that quarter increased by 17.21 TP3T – a figure that any chain in the industry would envy. In Q1/2026, EBITDA is projected to reach nearly PHP 692 million (~VND 297 billion), with same-store sales continuing to grow by 81 TP3T. Jollibee used the phrase “best-in-class store-level economics” to describe Highlands – meaning that the business performance at each location is among the best in the group's entire portfolio.

This isn't a random number. It's the result of a point selection and operation system that has been optimized over many years. And to understand why that system works so well, you have to look at the Mapdy map by market.

Ho Chi Minh City — A battlefield where neither side is allowed to ease up.

Looking at the Mapdy map of Ho Chi Minh City, what I see is competition taking place on multiple levels simultaneously. Highlands Coffee has a dense presence from the city center to the outskirts. But unlike Hanoi, the red color of Highlands Coffee in Ho Chi Minh City has to share the map with brands strong enough to steal customers at any time.

Data from InsightAsia Vietnam at the end of 2025 reveals a very clear competitive landscape: Phuc Long operates 237 stores, Katinat 114 stores, and Starbucks 140 stores. The majority of the presence of all three brands is concentrated in Ho Chi Minh City. Phuc Long originated in Ho Chi Minh City and understands this market in many ways. Katinat is rapidly encroaching on street corners that the two giants haven't yet captured. Starbucks doesn't compete directly in terms of density but cherry-picks the most valuable locations — especially the ground floors of Grade A office buildings, areas that Highlands also wants to occupy.

A few years ago, Phuc Long expanded its store network through the Winmart+ system, placing Phuc Long counters directly inside mini-supermarkets — a distribution channel that Highlands hasn't yet responded to. When customers become accustomed to buying a cup of Phuc Long coffee while shopping at the supermarket, this habit directly competes with the habit of stopping by Highlands on their way to work, a problem that remains unresolved, and currently only a small number of customers still shop at Winmart+ stores.

This creates a very different operational pressure compared to other markets. In Ho Chi Minh City, Highlands must simultaneously defend and attack — keeping existing locations from being poached by competitors, while continuing to expand to avoid losing new territory. Ho Chi Minh City is the city that generates the most revenue — but also the one that consumes the most competitive costs in the entire system.

Hanoi — Where Highlands are harvesting with almost no need for further planting.

The Mapdy map of Hanoi tells a completely different story.

When Highlands' data is fed into the office sector on Mapdy, the map becomes incredibly clear: Highlands' red dots perfectly align with concentrated office clusters — from Hoan Kiem and Ba Dinh districts to Cau Giay and My Dinh districts. And in Hanoi, there are almost no competitors strong enough to challenge them for those locations.

Phuc Long has a presence, but it's sparse and lacks a clear expansion strategy in the Northern market. Katinat is almost absent—this brand is still consolidating its market in the South. Starbucks appears in some upscale locations but doesn't create widespread competitive pressure. The reality of the Hanoi market shows one thing: when Northern office workers want to drink mid-range chain coffee, their default choice is almost exclusively Highlands.

What does this mean in practical terms? Highlands in Hanoi doesn't need to spend heavily on marketing to retain customers — because there aren't enough comparable alternatives. Habits are formed over years, visit frequency is stable, and customer retention costs are significantly lower than in Ho Chi Minh City. CEO David Thai once shared that Highlands prioritizes resources for product quality first, then marketing — a strategy that can be more effective in a market where the brand already dominates the minds of consumers, like Hanoi.

In retail finance, this is characteristic of high-margin markets: absolute revenue may be lower than in Ho Chi Minh City, but the retention rate after operating and marketing expenses is significantly higher. The phrase "best-in-class unit economics" that Jollibee used to describe Highlands — I believe Hanoi is the market that contributes the most to that "best-in-class" status.

Da Nang — The dilemma of those who place deposits before the market matures.

Da Nang is smaller than the other two cities in terms of size. But the Mapdy map here tells a story about strategy that, in my opinion, is the most interesting of the three cities.

Highlands Coffee has a strong presence along the most important routes: along Ham Nghi Street — the city's densest concentration of offices and commercial hotels, the area around Da Nang train station, near the international airport, and the eastern coastal road. Katinat is just starting to appear in a few locations. Phuc Long is scattered. Starbucks is present but focuses on the high-end tourist segment — a completely different customer base.

It's important to reiterate: Highlands entered Da Nang in 2009, before the city experienced the wave of 5-star beachfront resorts and the real estate boom of 2015-2019. They came when the market was still green and land costs were low. As Da Nang grew, the best locations had long since been acquired.

This is the pioneering principle in choosing a location that I always tell my clients: opening early isn't because the market is ripe, but because when it's ripe, there won't be any good spots left. If Katinat or any other brand wants to enter Da Nang now to compete directly with Highlands on the same street, the cost of space will be much higher than in 2009 — both in terms of rent and the scarcity of remaining prime locations.

The bigger picture: the market still has plenty of room for growth.

One figure I found noteworthy in the Cafely 2025 report: Vietnamese people currently drink an average of about 0.4 cups of coffee per day. This compares to Japan's 1 cup, South Korea's 0.9 cups, and European countries' 2 to 5 cups. Meanwhile, according to Mordor Intelligence, the Vietnamese coffee market could reach $1.1 billion by 2030, with a compound annual growth rate of over 8%.

This means that all three cities—Ho Chi Minh City, Hanoi, and Da Nang—are not yet close to reaching true saturation point. Vietnamese people are drinking more and more coffee, and every increase of 0.1 cup/day across a population of nearly 100 million represents a huge amount of revenue flowing into the chains that are dominating consumer habits.

This is why Highlands' strategy—spreading early, establishing habits first—is not just a story of today. It's how they're placing their bets on a market that will be much bigger in the next few years.

When comparing the three cities, what I noticed most was that Highlands doesn't use a single formula. In Ho Chi Minh City, they operate on a defensive and offensive basis — investing heavily to maintain their territory and continuously improving to avoid losing customers to competitors. In Hanoi, they are in exploitation mode — focusing on efficient operations to maximize profits from a market with virtually no comparable competitors. In Da Nang, they are investing for the long term — accepting some less-than-optimal aspects to ensure no one can snatch up prime locations as the market grows.

Many F&B brands fail when expanding because they find a template, replicate it everywhere, and then wonder why the same model fails in one market but succeeds in another. Three cities, three different business environments, three different resource allocations — but all stem from the same mindset: understand the market conditions first, then decide what to play.

All I've just analyzed is about Highlands in itself. The really more interesting question is: How are Phuc Long, Katinat, and Starbucks responding? Who is filling the gaps on the map left by Highlands — and who is quietly building an advantage that few people realize? Part 4 will answer that question.

P.S.: This is my personal perspective based on data and real-world experience. It's neither entirely right nor entirely wrong, so please read it as a reference. I'd be happy if you could share your opinions so we can all learn together.

Minh Phan — Choosing the right location

(Part 2 in the series "Reading the Highlands Coffee Map")

When I asked several F&B brand owners planning to open a chain what they could learn from Highlands Coffee, the most common answer was: "They chose beautiful locations, prime spots." That answer isn't wrong, but it only describes the result, not the mindset.

After more than 12 years in store development and observing hundreds of location selection decisions by large and small chains in Vietnam, I've realized that Highlands Coffee isn't simply about "choosing a good location." They follow a completely different logic, and once you understand that logic, you'll view Highlands locations on the Mapdy map in a completely different light.

Before getting into the content, I want to clarify my approach to this article so you can verify it for yourself, not just read and believe it.

I use three main sources: store location data from Mapdy.vn To observe the geographical distribution pattern; to compare the quarterly financial reports of Jollibee Food Corporation (the parent company holding shares in Highlands) to assess business performance across different expansion phases; and to observe the situation on-site at store clusters in Ho Chi Minh City, Hanoi, and Da Nang. These three sources complement each other: maps show the pattern, financial reports show the results, and on-site observations reveal the reasons.

Three store models and the strategic implications of each type.

What few people notice is that Highlands Coffee doesn't just have one type of store. Looking closely at their system, I see at least three models operating in parallel, each serving a different strategic objective.

Kiosk model (5-10m²), usually located at gas stations or transfer points.

This is the latest model and, in my assessment, is most likely still in the testing and refinement phase. The logic of this model is clear: serving on-the-go customers, those who don't need to sit down but just want a cup of coffee on the go. A space of 5–10 m² means virtually zero rental costs compared to a standard model, and revenue per square meter, if operated well, will be extremely high.

However, the kiosk at the gas station raises some unanswered questions.

Firstly, this is a completely different customer group from those who sit for two hours in a standard cafe. Will the Highlands brand be diluted by appearing in this format?

Secondly, kiosk orders are primarily grab-and-go, meaning there's no upselling or loyalty loop like when customers are seated in the shop.

Third, operating a kiosk with a small team requires a very high level of process standardization, something that even large global chains take years to get right.

I'm not saying this model will fail. I'm saying this is a problem without a complete solution, and Highlands is using real-world scenarios to find one. That's how an organization conducts controlled testing before scaling up.

Standard model (100-150m²), the backbone of the entire system.

This model accounts for the majority of Highlands' current 1,011 stores. When I look at the Mapdy map and zoom in on any Highlands cluster in Hanoi or Ho Chi Minh City, most of the locations I see fall into this category.

According to Highlands' franchise information, the minimum area for a standard store is 150–250m², preferably a corner location at a T-junction, ground floor, and with a wide storefront. However, interestingly, when I visited the site and compared this with Mapdy data, I found many Highlands locations operating effectively with actual areas of only around 100–200m², especially on older commercial streets in the centers of Ho Chi Minh City and Hanoi, where large, reasonably priced spaces are almost non-existent.

This model optimizes three things simultaneously: enough space to create a true "coffee shop" atmosphere, controllable rental costs, and sufficient service capacity to achieve break-even quickly. This is also why the 8% increase in same-store sales in Q1/2026 is significant; it shows that these benchmarks are performing better over time, not just at the time of opening.

The flagship model, spanning over 200m², is more than just a coffee shop.

This group is small in number but crucial to brand strategy. These are Highlands stores that, upon entering, immediately make you understand why they are called "flagship"—spacious, iconic locations, often situated in high-value landmark areas. A prime example is Highlands Coffee at 74 Bach Dang, Da Nang, the brand's first location in the city, opened in 2009, with a direct view of the Han River. Or locations on the ground floor of Grade A office buildings in the heart of Ho Chi Minh City and Hanoi.

These locations aren't optimal in terms of revenue per square meter due to high rental costs, large areas, and more staff. But they do something that standard locations can't: they are living billboards. Every time a customer sees Highlands in a prime, iconic location, they associate the brand with quality and reputation, even if they don't make a purchase. This effect spreads throughout the entire system, including the regular standard locations.

So what logic does Highlands follow in choosing its locations?

When I overlay Highlands Coffee data onto a Mapdy office building map, what you can clearly see in the images below becomes very clear. In District 1, Ho Chi Minh City, the red dots of Highlands Coffee almost completely surround the clusters of offices along the Dong Khoi, Le Thanh Ton, and Ham Nghi axes. In Hanoi, the highest density of red dots is in the Hoan Kiem and Ba Dinh areas, which also have the highest concentration of offices in the city. In Da Nang, the chain of Highlands Coffee locations runs along Ham Nghi and the Han River, two main streets with a high concentration of offices and commercial hotels in the city.

The consistent principle I've drawn after looking at the maps of all three cities is: Highlands doesn't choose prime locations; they choose locations situated on the commuter traffic flow. Prime location is a subjective concept. Commuter traffic flow, however, is measurable, and when you overlay these two layers of data, you'll see that Highlands' location selection decisions aren't based on intuition but are very systematic.

Starbucks takes a different approach, selecting the most upscale locations and accepting smaller customer bases. Phuc Long is more flexible in terms of space, able to enter smaller spaces within commercial areas. Katinat is infiltrating street corners that neither has yet occupied, a strategy of a latecomer but one that is accelerating. Highlands chooses a middle ground: large enough to create an experience, numerous enough to cover a wide area, and always located on the daily commuter routes.

The next question I want to ask is: if the criteria for selecting locations are as stated, why is Highlands' approach in Ho Chi Minh City, Hanoi, and Da Nang completely different? And which city is generating the most revenue for them—and not the city many people think it is? The next article will answer that question.

(Map data in the article) Mapdy.vn – Vietnam's chain store data platform.

Image source: Highlands Coffee

P.S.: This is my personal perspective based on data and real-world experience. It's neither entirely right nor entirely wrong, so please read it as a reference. I'd be happy if you could share your opinions so we can all learn together.

Minh Phan – Choosing the right location

Lately, while surveying locations and browsing maps of bubble tea chains in Saigon, I've had a strange feeling: the market is packed with brands, but whenever CG opens a new location, the entire surrounding area becomes bustling. People flock there out of curiosity, landlords start asking for higher prices, and real estate agents whisper to each other about a major tenant moving in. I'm not trying to argue about right or wrong here. It's simply... curiosity.

I was curious about the business viability of a high-end tea shop model in a context where consumers increasingly prefer low prices, quick purchases, and immediate consumption. Even more curious was the financial strategy behind renting premises for hundreds of millions, or even nearly a billion VND per month.

Looking at the store distribution map, it's easy to see that CG isn't spread out evenly like other kiosk chains. They choose prime locations in the city: corner stores, major thoroughfares, and areas with high concentrations of offices and residential buildings, where simply putting up a sign will attract the attention of a stream of cars. Wherever they open, it becomes a check-in point. It feels more like they're buying locations rather than just renting a space to sell drinks.

Then, when flipping through the rental price lists, the story started to get more interesting.

There are apartments in Binh Thanh, Phu Nhuan, and Tan Binh districts being offered for 180-230 million VND per month for large units with proper ground floor and upper floor arrangements. In the city center, many locations are priced at 30,000-35,000 USD per month, not to mention those approaching 1 billion VND. This is a price range previously seen at banks, car showrooms, or international fashion brands.

I naturally asked myself: with such high rent, how can the shop possibly operate and survive?

Let's take a very common example. Suppose a store rents 200 million VND per month. In the F&B industry, to be safe, rent should generally be somewhere around 10-15% of revenue (I'm giving a simplified perspective so we can easily understand, but in reality, the cost of premises is a fixed expense and cannot be calculated as 1% of revenue). This means that the store needs to generate around 1.5-2 billion VND in revenue each month for the calculation to become manageable. If each drink sells for an average of 60,000-70,000 VND, then it needs to sell around 800-1,000 drinks per day, consistently for 30 days.

That number isn't impossible, but it clearly requires a very good location, a very smooth operating model, and a brand strong enough to attract repeat customers, not just a few weeks of high demand.

But for properties costing $30,000 a month, it's a different story. At this point, it's no longer about selling bubble tea, but about organizing an entire destination. You have to create a habit of visiting, have a stable customer flow, and make the store an integral part of the neighborhood's daily routine. Otherwise, the rent will become a heavy burden hanging over your cash flow.

From a market perspective, the emergence of a brand willing to pay a high price like CG has a very clear effect. Homeowners see someone willing to spend, so they raise their expectations. Brokers see a high-priced deal and immediately secure new properties. And so, the price levels along an entire street are reset. This isn't necessarily bad, but it makes me even more curious about the real effectiveness behind those flashy numbers.

While rents are rising rapidly, consumer purchasing power doesn't always keep pace. Young people still enjoy new experiences, but are also increasingly price-sensitive. The market is highly polarized: on one side, there are cheap kiosks covering specific locations, and on the other, large, branded stores. The middle ground is very difficult to navigate.

From the outside, I don't think the story is about whether "high rent is foolish" or "low rent is smart." Each model has its own strategy. But what's certain is that the game now is no longer simply about finding a good location and opening a business.

The real question is: can my business model handle the significant fixed costs? Is the revenue target clear enough to know which game I'm entering? And when the market slows down, will I still have room to maneuver?

For those preparing to open a store during this period, perhaps what they need to learn is not just about beverage preparation or design, but about seriously considering the financial aspects: understanding the cost structure, knowing what percentage of revenue is accounted for by rent, calculating the break-even point, and anticipating cash flow for months that don't meet expectations. Along with that, they need to think strategically about choosing a location for the long term, rather than just basing their decision on "where there's a lot of customers, there's a good opportunity.".

Looking at the bigger picture, the story of prime locations is no longer just a competition for the bubble tea or F&B industries. Today's business owners are directly competing with banks, showrooms, gyms, retail chains, fashion chains, convenience stores… all vying for the same "golden spots" in the city.

A prime corner location, a busy street, a highly visible spot – it's no longer a one-person exclusive domain. And when large chains from other industries are willing to pay high prices to acquire such locations, the battle for prime real estate naturally becomes much more intense.

Therefore, opening a store now is not just about making delicious products or decorating beautifully, but a comprehensive game involving finance, operations, branding, and sustainability. Business owners need not only passion, but also courage, discipline, and the ability to go the distance.

The market is getting increasingly difficult, but that also means those who survive will become stronger. I wish you all the clarity of mind to make the right decisions, the courage to pursue your chosen path, and the perseverance to see it through to the end.

Minh Phan – Site Plus | Choosing the right location.