Koreans Prefer Chains Or Convenience, Report Suggests

A report from the USDA Foreign Agriculture Service suggests that there is a change happening within the South Korean coffee industry.

The sector is growing at an astronomical rate, recording a growth in sales of 50% in the three years ending in 2014. One of the biggest beneficiaries of this upward trend has coffee shop chains.

Specialist independent shops have been surprisingly one of the biggest losers in the boom.

“Independent specialist coffee shops performed negative value growth while chained specialist coffee shops showed a sharp increase in both value and volume sales during the same period,” the USDA’s report says.

It goes on to add that the traditionally independent shops are falling behind “due to a lack of strong brand power and low customer loyalty” and that many consumers use “coffee shops as a place to gather.”

TLDR: If you are a Korean coffee shop geared towards providing Ray Oldenburg’s concept of a third space, you are onto a winner.

Looking further into the data, another beneficiary of South Korea’s rapidly expanding coffee sector has been convenience coffee stalls and shops, such as those found in gas stations and fast-food areas.

This, the USDA suggests, is that consumers are looking for value for money with their coffee purchases. A chain may offer social value money with the offer of free WiFi and a space to meet, but strip that away and people seem to be content picking up an inexpensive (and mediocre) cup of joe.

TLDRA: If you can offer a decent product at a cheap price and in an accessible location, you are also onto a winner.