|
|
Coffeemania In Korea
Baristas at Starbucks Coffee Korea are set to begin serving up Green Tea Lattes on Wednesday for the first time in the world. After observing how the new product is received in the Korean market, Starbucks plans to expand the market where the drink is offered into other parts of Asia and in the United States starting in the second half of this year.
A leader in the information technology field, Korea has often served as the "antenna" market for IT companies. IT firms have long launched their new products first in the Korean market to test their marketability but now it seems as though the Korean market is also serving as an antenna for the coffee market as well.
S.K. Chang, the CEO of Starbucks Coffee Korea, said the Korean division of the coffee giant is fifth largest in the number of stores and sales in the world, excluding the North American region. "Because the young generation makes up a large part of the customers, and they are keen to fashion, it is easy to get feedback on the products and services we provide," said Chang.
Some 80 take-out coffee companies and 40 sit-down coffee shop companies are battling it out in Korea. The number of new coffee shops that will open this year is expected to total more than 300 as the trend spreads from Seoul's Gwanghwamun, Jongno and Gangnam areas to other cities and suburban areas.
The rise of Korea's coffee culture follows the fast-growing trend of eating out, and more people are switching from cheaper instant coffees to more expensive brews like espresso and cappuccino. But experts say that instant coffee brands are ready to fight back and that the coffee market is just beginning to heat up.
The high-end coffee market has grown by more than 30 percent in the past few years, to its current W300 billion (US$1=W938) size. Starbucks, an American chain, is the dominant brand with sales last year of W109.4 billion. The company is preparing to expand by 44 shops this year, about the same as last year. Meanwhile, Coffee Bean & Tea Leaf from America is planning a massive expansion of 100 new shops this year, while Pascucci from Italy plans to open 50 new shops.
Domestic brands are also stretching out. Hanwha Galleria announced that it will open a coffee shop subsidiary called Beans & Berries. Lotteria's Angel-In-Us says it will open 100 shops this year, and Ediya, a take-out chain, plans to open 60 more outlets this year to bring its total to 270.
Much cheaper instant coffee is still the market leader, though. The market size of instant coffee, which includes coffee from vending machines and coffee mixes, was W745.2 billion last year, according to researcher AC Nielsen. But growth has been slow, with an increase of just 2.5 percent in 2006 from the year before.
Korea's flourishing cafe culture has prompted rising sales of coffee makers for the home, figures show. Coffee shops have raised consumer expectations about what the drink should be like, and people are shelling out big money for new home machines.
Hyundai Department Store said it's selling about 100 expensive imported machines a month, more than twice as many as last year. The coffee makers are made in Italy and Switzerland and cost up to W2.5 million. Meanwhile Hyundai Home Shopping sells a cheap domestic-made machine for just W100,000. The store claimed it sells about 1,000 of the machines an hour, five times the amount it was selling last year.
Industry experts say that Korea's coffee craze is just beginning to boil. An executive with Pascucci said that as Korea's average per capita income nears US$20,000, consumers who are not satisfied with instant coffee are increasingly turning to high-end java.
But an executive with Dong Suh Food, an instant coffee maker, said that instant coffee is still very popular in Korea and that consumer tastes aren't likely to change overnight.
english.chosun.com
|
|
