By Kim Tong-hyung
Staff Reporter
Korea appears to becoming overcrowded with coffee shops, with the 11 biggest chains running 1,392 branches across the country.
The local market for coffee retailers was valued at 1.9 trillion won (about $1.6 billion) last year, and sales from the 11 major brands accounted for about 29 percent, or 550 billion won.
Starbucks Korea, the local unit of the Seattle-based coffee giant, tops the list with 310 outlets, followed by Hollys with 213 shops and Angel-In-Us with 211.
Coffee Bean has 185 outlets, good for fourth place, followed by Tom N Toms, which operates 149 cafes, and Davinci Coffee with 105.
The fastest riser in the coffee chain hierarchy has been Caffe Bene, a local brand that opened 100 shops after its launch in April.
The company, a new project by former Starbucks Korea manager and Hollys founder Kang Hoon, plans to open 200 new outlets next year alone, which will likely be good enough to establish itself as a top-three brand.
After establishing a stronger presence in Korea, Caffe Bene is looking to expand its corporate reach abroad.
The company is currently in a partnership with Arakor, the local unit of international food service chain Aramark, and local entertainment company, Sidus, to open coffee shops in the United States, China and Southeast Asian countries.
"Despite the slow economy, the local coffee market is defying expectations and seems to be still in the midst of growth. Then again, spending 3,000 won to 4,000 won on a cup of coffee is not a bad choice when you are looking for a place to meet someone for several hours," said a marketing representative from Coffee Bean Korea.
"Unlike 10 years ago, when small, takeout shops led the country's first real coffee craze, it seems that the growth in the industry is led by big, premium outlets that offer better quality drinks as well as a better atmosphere. The competition to differentiate is getting tougher."
Local brand Twosome Place is operating 51 outlets, while Pascucci has 43 shops and Cafe Daily has 18 shops.
Starbucks posted sales of 171 billion won last year, while Coffee Bean followed with 95 billion won, a 30 percent increase from its 2007 revenue.
Angel-In-Us had 65 billion won in sales in 2008, nearly double the numbers of the previous year, while Hollys's 67.1 billion won revenue represented a 50 percent annual increase.