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Coffee chains are crowding Singapore to jumpstart their global expansions


Group of friends at a restaurant

Santiago Nunez | Klaud9 | Getty Images

The Singapore coffee market is already crowded, but brands continue to open new locations in the city-state in hopes success on the island will kickstart international expansions.

In the last few months, at least five players – China’s Luckin Coffee, Indonesia’s Kenangan Coffee and Fore Coffee, Canada’s Tim Hortons and Taiwanese specialty coffee chain Louisa Coffee have set up shop in Singapore.

Singapore was Luckin’s first major push outside of China, opening 30 outlets since March, according to a CNBC check. Kenangan Coffee has opened four stores since its September arrival while Tim Hortons has two outlets and Fore Coffee and Louisa Coffee each have one outlet.

“We have a pretty grand ambition for our international expansion. We do believe that Singapore and Malaysia are just a stepping stone. And we want to expand to a lot more countries than where we are today,” Edward Tirtanata, co-founder and CEO of Kopi Kenangan, a leading grab-and-go coffee chain in Indonesia, told CNBC.

Launched in 2017, Kopi Kenangan operates more than 800 stores across 45 cities in Indonesia and 22 stores across Malaysia.

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Known as Kenangan Coffee in Singapore, the brand has opened outlets at Changi Airport Terminal 2, Jewel Changi Airport mall, as well as Raffles City Shopping Centre and Takashimaya Shopping Centre — all locations that typically feature upscale brands and goods.

“There’s no better country than Singapore to jumpstart our global expansion plan. Why? Singapore is a definite hub of Southeast Asia. [People] all over Southeast Asia fly to Singapore, simply just to transit, to travel or do business,” said Tirtanata of Kopi Kenangan.

“Therefore, we do believe that with a successful entry into Singapore, we will be able to propel our brand further as we expand to more and more countries.”

Singapore’s prominence as a global financial hub has attracted coffee brands to the country.

“It’s one of these things where if you have a restaurant chain, you want to open in New York City, in London,” said Peng T. Ong, co-founder and managing partner at Monk’s Hill Ventures.

“I think they’re here in Singapore because we are a financial center. And they want their future investors to know about us,” said Ong.

“It gives them, especially venture-funded ones, very good visibility for international investors,” said Jianggan Li, founder and CEO of tech research firm Momentum Works.

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Luckin Coffee declined to comment, saying that it is “still a beginner” in the overseas market. It overtook Starbucks as the largest coffee chain in China this year.

A Starbucks spokesperson told CNBC: “We welcome competition because it expands the coffee market and accelerates adoption and vacancy of coffee consumption.”

Crowded Singapore market



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