Nov 11, 2009 0
Could the coffee chains be facing stiffer competition?
The title of this post came to me this morning whilst getting a coffee at Croissants de France. Recently, the Croissants de France near my apartment put in a new coffee bar with coffee, lattes, cappuccinos and milk teas at half the price (8-12RMB $1-2USD) of the coffee chains who charge 18-36RMB ($3-6USD). The Coffee chains in Shanghai include Starbucks(USA), Coffee Bean(USA), Gloria Jeans(Australia), Costa(UK), Jamica Blue(Australia) and Wagas (local chain of 14 stores started in 1999) .
So does cheaper coffee from bakeries mean that the coffee chains will starting getting more competition from non-sit down coffee shops/bakery chains. Will Bread Talk (aka Bread Top) start serving coffee? Will the recently entered Donut King, Dunkin’ Donuts & soon to be launched Krispy Creme have the same effect in Shanghai on the coffee chains as they did in the USA?
My opinion is that the competition is getting fierce in a quickly growing market. Over the last ten years international coffee chains keep entering the Shanghai market and now the Donut chains are moving in. The market is relatively new(10 years old) however it has grown fast, with its first Starbucks opening in Shanghai in 2000 and then exploding across the city and soon to open its 112th store in a nation of tea drinkers is pretty impressive. However, there has also been an explosion of other coffee chains across the city, add to this the rapid rise in small milk tea bars that offer beverages from 4-8RMB, it appears that the beverage market is getting more and more fragmented.
