Fall of a Giant

By now, TenRen shouldn’t be too uncommon of a name to boba tea lovers. Throughout its years of presence in Vietnam, TenRen has been a crucial part of the milk tea ecosystem, marketing and selling cold beverages consisting of their signature tea – the Oolong 913, as well as their imported tea from Taiwan. Many consider TenRen their favorite place for meet-ups, and their shops are usually packed after dinner time. TenRen also runs plenty of weekly promotion, slashing their price by half across all delivery platforms, resulting in (at times) ridiculously long wait lines of shippers. For the outsiders, TenRen is a working business model, while for tea fans, TenRen is here to stay.

However, TenRen’s reports tell a different story. After 100 billion VND of initial investment, only 23 shops were up and running in November, 2018 instead of 40 as in early planning stages. TenRen’s revenue has also been mediocre at best. As TenRen’s spoke-person put it: “It’s a back-and-forth between making and losing money.”

So what has happened to TenRen?

For a start, TenRen’s mother company – The Coffee House, presented the chain to the public at a time when milk tea is on its decline. With a strong movement towards a healthier life style in 2017, more and more young people change up their diets, replacing milk tea with healthier alternatives, such as detox drinks or fruit juice. This was also a bad year for tea shops in general, with numerous articles citing milk tea as the main source of diabetes, obesity and other cardio-vascular diseases.

TenRen also struggles to set them apart from other giants in the industry. The chain is a late-comer compared to Hot&Cold, Hoa Huong Duong, Uncle Tea or Bobapop, which have already accounted for 43% of the Southern market share. TenRen’s pricing also targets the wealthy youth, in direct competition with Gongcha, Koi or R&B, which is not necessarily bad with a great marketing scheme. However, TenRen hasn’t been associated with any break-through in milk tea trends, while their competitors constantly came up with new ideas for drinks (The Alley’s Sua tuoi tran chau duong den, Koi Thé’s macchiato, or at least R&B’s peach green tea). In simple words, TenRen is that guy at the gym who looks quite muscular, but not strong enough to fight other muscular guys, and not many people know about its fights anyway.

To make matter worse, TenRen also failed to have good financial planning. Being late to the show, the brand has to settled down with locations often far away from “hot spots”. In Ho Chi Minh City, TenRen couldn’t score its name on Nguyen Hue walking street or their nearby Ngo Duc Ke, Ho Tung Mau. In other places, TenRen either opened a shop after the street had already had several tea brands, or on streets that normally not many people would come for milk tea. The result is that TenRen had to open shops at places with high rent and much lower potential customer count.

TenRen’s tea supply is also problematic. As no Vietnamese tea suppliers had met the standards given by the company, TenRen had always outsourced their tea from Taiwan, keeping ingredient cost at an all-time high in comparison with Phuc Long, whose tea comes from their domestic farms. Tea is also imported periodically at a fixed amount, which was then distributed to every TenRen shop. This meant that unconsumed products were stacking up or reaching their expiration date, which is also a huge problem.

Finally, TenRen unsuccessfully penetrated the Vietnamese market by failing to target the right audience. While it is true that gen X (born in the 90s) were the first to experience milk tea, it is gen Z (born after 2000s) who are obsessed with this drink. TenRen wanted to keep a hint of tartness in their original recipe, which is more suitable for grown-ups. However, these people would choose Phuc Long over TenRen any day thanks to a more diverse menu of desserts, hot drinks and coffee offered, while the same items cannot be found on TenRen’s. Tart tea is also, literally, not the youth’s ‘favorite cup of tea’. With young Vietnamese having familiarized themselves with a sweeter, subtle taste of tea for their milk tea fix, TenRen isn’t the most popular choice.

All in all, the closure of the milk tea chain wasn’t a sudden decision made by the company but a summative one backed by all given data and numbers. With all of its shops officially ceased to function from August 15th, 2019, it was truly the fall of a giant.

Special thanks to YEA Vietnam for their wonderful post on the same topic in Vietnamese. Most of what is written about comes directly from their post. You can check theirs at:

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