South Korea seeks curbs on growing coffee shops
Source: Agencies |
August 22, 2012, Wednesday
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Print Edition
Print Edition
THESE days, a stroll on the streets of southern Seoul is just as likely to bring the fragrance of fresh-brewed coffee as that of kimchi or more traditional Korean foods.
Nearly one in every two buildings boasts a coffee shop, from Starbucks to local brands such as Caffe Bene and Angel-in-us Coffee. Despite shops being a mere 70 meters apart, it can still be hard to find a seat on some evenings even though a cup can cost more than a meal.
In short, South Korea, home to the world's third largest number of Starbucks stores after the US and Japan, has become a major battleground for coffee chains - so much so that government restrictions may lie ahead.
"There are few places where I can meet my friends comfortably. So I go to coffee shops," said Ko Sun-bee, a high school teacher in Seoul.
Asia's fourth-biggest economy, in fact, now has so many coffee shops that regulators are considering whether or not to impose a "distance" between new franchises to protect them from cut-throat competition.
The Fair Trade Commission, an antitrust watchdog, will start talks with coffee franchise operators on whether to impose distance and other rules.
Though coffee was once a luxury drink, the market in South Korea has grown at a dizzying rate. The number of coffee shops jumped nearly ten-fold to 12,381 during the five years from 2006 to 2011.
South Korean adults consumed an average 338 cups of coffee last year, and coffee imports swelled 44 percent to 130,000 tons over the past four years, said the Korea Customs service.
The value of the market overall has climbed 17 times to 2.48 trillion won (US$2.19 billion) during the same time, said a think tank affiliated with KB Financial Group.
The spark was lit by Starbucks, which entered the market in 1999, analysts said.
"Without Starbucks, there would be no coffee boom here," said Lee Taek-gwang, a culture commentator and professor at Kyung-hee University in Seoul.
"Starbucks is the symbol of US culture and gained widespread popularity among young Koreans who admire it."
The number of Starbucks stores more than doubled to 367 over the past five years. The firm said last year it plans to raise it to 700 by 2016.
The market for espressos and lattes turned out to be big enough to help boost the fortunes of other coffee chains and individual shops.
Nearly one in every two buildings boasts a coffee shop, from Starbucks to local brands such as Caffe Bene and Angel-in-us Coffee. Despite shops being a mere 70 meters apart, it can still be hard to find a seat on some evenings even though a cup can cost more than a meal.
In short, South Korea, home to the world's third largest number of Starbucks stores after the US and Japan, has become a major battleground for coffee chains - so much so that government restrictions may lie ahead.
"There are few places where I can meet my friends comfortably. So I go to coffee shops," said Ko Sun-bee, a high school teacher in Seoul.
Asia's fourth-biggest economy, in fact, now has so many coffee shops that regulators are considering whether or not to impose a "distance" between new franchises to protect them from cut-throat competition.
The Fair Trade Commission, an antitrust watchdog, will start talks with coffee franchise operators on whether to impose distance and other rules.
Though coffee was once a luxury drink, the market in South Korea has grown at a dizzying rate. The number of coffee shops jumped nearly ten-fold to 12,381 during the five years from 2006 to 2011.
South Korean adults consumed an average 338 cups of coffee last year, and coffee imports swelled 44 percent to 130,000 tons over the past four years, said the Korea Customs service.
The value of the market overall has climbed 17 times to 2.48 trillion won (US$2.19 billion) during the same time, said a think tank affiliated with KB Financial Group.
The spark was lit by Starbucks, which entered the market in 1999, analysts said.
"Without Starbucks, there would be no coffee boom here," said Lee Taek-gwang, a culture commentator and professor at Kyung-hee University in Seoul.
"Starbucks is the symbol of US culture and gained widespread popularity among young Koreans who admire it."
The number of Starbucks stores more than doubled to 367 over the past five years. The firm said last year it plans to raise it to 700 by 2016.
The market for espressos and lattes turned out to be big enough to help boost the fortunes of other coffee chains and individual shops.
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