Global Coffee Chains Struggle In Korea's Saturated And Stratified Coffee Market – CoffeeTalk

Global coffee chains like Blue Bottle and Tim Hortons are struggling to adapt to Korea’s cafe culture, as they struggle to localize their offerings. Blue Bottle, which entered the country in 2019 with its artisanal brewing rituals, has recently traded some of its signature slowness for speed, with its focus on customer interaction losing some of its gravitas. The company’s operating profit plunged to 200 million won, from 1.9 billion won the previous year and 2.7 billion won in 2021. As of October last year, only five of its 17 locations offered delivery, but that number has since doubled to 10. Industry insiders believe this shift risks diluting the brand’s identity, though it seems a necessary concession to Korean consumer culture.

Tim Hortons, another notable entrant, is at a crossroads in Korea, having closed its flagship store in Cheongna, Incheon, in June. The backlash stems from Tim Hortons’ premium pricing strategy in Korea, where prices are 1.5 to 2 times higher than in Canada despite its reputation for affordability and everyday value. Fast-growing, budget-minded Korean chains like Mega Coffee, whose 2,000 won Americano delivers enough caffeine kick to stand up against Tim Hortons’ 4,000 won and Blue Bottle’s 5,900 won Americanos, have launched promotional campaigns slashing prices on their signature Iced Capp by 60 percent and offering free Americano coupons to customers who purchased donuts. Starbucks, a dominant force in Korea’s cafe scene, is an early mover in delivery, continuing to anchor customer loyalty by doubling down with expanded app rewards and discounts of up to 60 percent.

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