Issue link: https://read.dmtmag.com/i/641418
46 STiR tea & coffee industry international / Issue 1, 2016 (February/March) S outheast Asia's branded coffee shop market includes coffee-focused American-style chains across nine countries where 2,040 outlets opened in 2015, representing 14% year-on-year growth in the last 12 months, according to the Allegra Strategies World Coffee Portal report: Project Café 2015 South East Asia. China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam make up a region with exciting opportunities for growth, according to the first definitive report on the Southeast Asian coffee shops. The biggest market opportunities are evident in China, Indonesia, Thai- land, and Malaysia. China is the leading Southeast Asian coffee shop market, with an esti- mated 5,391 outlets. China also displays the strongest percentage growth of 37% after adding 1,462 outlets in the past 12 months. The Chinese market is growing by the equivalent of 4 new branded coffee shop stores per day. The second largest growth market is Indonesia, which expanded by 15% and is a dynamic market displaying excellent potential for development. Vietnam, although the smallest market by size, showed the third strongest percentage growth of 14%, albeit from a small base with just 230 branded cof- fee shops. This locally driven market is defined by the strength of Vietnam's national chains and is yet to see significant numbers of international branded chains demonstrate strong growth (See Vietnam's Cafe Society, pg. 50). With 2,775 outlets, Thailand is the second largest market by number of stores. The Thai market as a whole grew by 7%, adding 168 outlets during 2015. The third largest market by size is Taiwan, with 1,730 branded chain outlets and growth of 5% since 2014. Starbucks leads in Southeast Asia Starbucks is now present in 16 countries across the China/Asia Pacific region and expanding at a rapid rate. Starbucks is present in each of the 9 Asian countries covered in the report, and is market leader in 6 (excluding Malay- sia, Thailand, and Vietnam). Starbucks is the key driver of growth in 5 makrets. Starbucks has 3,213 outlets across the 9 featured countries which is a 22% share of the total Southeast Asian market. This includes more than 1,700 stores in China, its most developed market. Starbucks aims to reach 3,000 stores there by 2020. Taiwan has the second largest number of Starbucks, with 348 stores and Vietnam has the fewest, with 12. Benefiting from the strength of the McDon- ald's brand, McCafé has the second largest share of the market, with 1,517 outlets across all 9 coun- tries. Thai chain Café Amazon has 1,130 outlets in Thailand, making it the third largest chain in the region, with an 8% share of the market, but is yet to expand outside of its native country. Korean chain Caffé Bene expanded quickly into Southeast Asia to reach 727 outlets, adding 394 in the last 12 months with plans to open a new store every 8 hours in China. It is present in 7 of the countries covered, with the exception of the Philippines and Hong Kong. Dunkin' Donuts with 500 stores has a strong presence across 6 of the markets, especially Thailand, appealing to Asian consumers' desire for sweet products. UK based Costa Coffee is the 9th largest chain in the region with 358 outlets across 4 markets (China, the Philippines, Singapore, and Thailand), but is increasing its presence, particularly in China where it has 344 outlets. The Coffee Bean and Tea Leaf (302) was one of the first coffee shop brands in Asia, entering Singapore and Malaysia at the same time as Starbucks. It is now present in 8 of the 9 countries, the exception being Taiwan. The brand recently announced its partnership with South Korean retail conglomerate E-LAND and has re-entered the Chinese market after exiting 2 years ago. Strong competition in Southeast Asia has made market conditions challenging. In Thailand for example, brands must compete with Café Am- azon, Starbucks, and Dunkin' Donuts, which are Asian Café Growth Accelerates The Southeast Asian branded coffee shop market shows solid growth with the total number of outlets estimated at more than 14,300 stores in 2015. Starbucks' Howard Schultz at the Chengdu China partner family forum