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Business

Coffee chains battle over newly blossoming markets

BANGKOK -- Coffee consumption remains low across Asia, but local and international players are locking horns over the region's rapidly growing markets.

     The U.S. consumed 4,240 grams of coffee per person in 2011, while Japan consumed 3,290 grams, according to the International Coffee Organization. In contrast, the figure was just 430 grams in Thailand and 830 grams in Indonesia. Chinese consumption was even lower at 10 grams per person that year.

     In Thailand, U.S.-based Starbucks and British Costa Coffee are winning over the market with their brand images, while local chains are focusing more on their roots with the community. True Coffee, Thailand's number two chain and a member of the Charoen Pokphand Group, is utilizing the procurement chains of Charoen Pokphand Foods  to differentiate itself from Western coffee shops through its various food offerings.

     A small latte at both Starbucks and True Coffee costs about twice as much as a typical lunch from a food cart. But an industry source says customers aren't concerned with the price, since they are there for the social image.

     In China, Costa Coffee has created joint ventures in the north and south, and operates about 260 branches across the country. For its part, Hong Kong's Pacific Coffee chain entered the mainland in 2011 through a partnership with China Resources Enterprise. It now has a 230-branch network across 25 cities, and aims to hit the 1,000-store mark.

     Some Asian coffee markets are more developed than others. Strong local chains in Singapore are basically competing on even ground with Western names. Meanwhile, the coffeeshop markets in Vietnam and Laos have just started to bloom, drawing companies that found success in Thailand and Singapore.

(Nikkei)

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