The Vietnamese tea market is experiencing strong growth thanks to domestic demand and a weaker market for coffee, caused by high prices.
Tea has always been in high demand in Vietnam. Its importance for the country is also reflected by the earlier decision of the Vietnamese Ministry of Agriculture and Rural Development to identify tea as one of the six key industrial crops by 2030 with an area orientation of about 120,000-150,000 hectares.
As the demand for tea and its consumption in Vietnam grows, so too does the growth of investment in the market. In recent years, many local tea and coffee chains have expanded their business, with a particular focus on specialty tea products, including so-called ancient tea, to meet the increasingly diverse needs of local consumers.
According to earlier statements made by Vu Viet Anh, the founder of the La Boong milk tea chain, one of the largest tea chains in Vietnam, probably the biggest demand these days is observed in the case of oolong tea. In the past, most of its output was sent for exports primarily to Taiwan (China), but in 2024-2025 the situation has changed, as supplies to the domestic market have significantly increased.
According to Vu Viet Anh, the demand for oolong tea is rapidly growing primarily among Vietnamese youth, while this tea variety gradually replaces traditional Thai Nguyen tea. Many young locals increasingly prefer tea with a light, pleasant aroma, with oolong tea being one of the most favorite choices. He also added that most of this tea is traditionally sourced from the city of Bao Loc, which is one of the centers of tea production in Vietnam.
In terms of taste preferences, historically, milk tea has been in high demand among Vietnamese consumers. However, the recipe has changed in recent years, with tea versus milk beginning to account for up to 70% of the entire recipe.
"Many people say that young people today prefer to drink coffee over tea, but in fact, young people drink quite a lot of tea, it's just that the way they enjoy it is different from the previous generation," said Vu Viet Anh. "They don't drink pure tea but like to combine tea with fruit and other ingredients to create new flavors."
According to the Vietnam Tea Association (VTA), most domestic tea products are mainly green tea and products made from the wild Shan Tuyet tea variety. Domestic tea consumption is gradually increasing from 40,000 tons in 2018 to about 50,000 tons in 2024. The selling price of Vietnamese tea products is also much higher than the export price, averaging about 200,000 VND (US$7,83)/kg in 2023.
"The domestic market has been bringing high income to tea makers, especially in the segment of high-quality and premium teas," said an official spokesman of the VTA.
According to the VTA, in terms of exports, in the period of 2018-2023, Vietnam exported about 125,000-140,000 tons of tea each year, with a turnover of US$220 - 240 million a year. Some enterprises have developed high-end products with prices ranging from 15,000 USD to over 50,000 USD/ton. However, the average export price of Vietnamese tea is only 1,700 - 1,800 USD/ton due to the large proportion of low-priced tea. Also up to 90% of machine-picked tea does not meet technical standards.
According to the Import-Export Department of the Vietnamese Ministry of Industry and Trade, last year, exports increased by about 30%, compared to 2023 with Iran and China being among the largest sale markets.
Mr. Nguyen Dang Ben, founder of one of the leading local players, Thach Co Tra brand (which is part of the local IGV Group Investment), said in an interview with the Vietnamese Nguoi Lao Dong business paper that the bulk of revenue from the Vietnamese tea industry comes mainly from green tea and black tea, which are low-value teas. That means that the overall industry's revenue is generally low, which is contrary to statements of VTA.
In addition, due to the specifics of growing and processing most Vietnamese tea, it can only be used for three to six months, and the product's aroma and flavor are reduced after opening the packaging.
In recent years, the demand has grown to so-called ancient tea, which is grown in primeval forests and processed within five hours of harvesting using a fermentation method. This comes as part of the plans of the Vietnamese tea producers is to repeat the success of Chinese rivals, particularly in the segment of specialty teas.
"China has been very successful with Pu'er tea, and the Chinese specialty tea market is worth up to US$35 billion year," said Nguyen Dang Ben, a founder of the Thach Co Tra brand. "And ancient tea is a product with a higher profit margin compared to other specialty teas because it is not only purchased for immediate use, but also for collection and investment because the longer the product is kept, the higher the price."
Nguyen Dang Ben also believes that the Vietnamese tea market can reach a scale of US$3.5 billion USD/year based on a population of 100 million people with many similarities to the Chinese market.
In addition to domestic consumption, local tea producers are beginning more active exports of ancient and other specialty tea in years to come to create conditions for protection and preserving the unique primeval tea forests of Vietnam. These forests are only owned by five countries in the world: Vietnam, China, Laos, Myanmar, and Thailand.
Pham Vu Khanh, Chairman of Northwest Tea and Specialty Company Limited (Shanam tea brand) also said that Vietnam's ancient tea area is about 20,000 hectares, being considered the largest in the world with the major growing provinces of Ha Giang, Son La, Yen Bai, Lai Chau, Dien Bien, Lao Cai, Tuyen Quang, Bac Kan.
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