A group of friends in a restaurant
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Singapore was Luckin's first big push outside China, where it has opened 30 outlets since March, according to a CNBC examination. Kenangan Coffee has opened four stores since arriving in September, while Tim Hortons has two outlets, and Fore Coffee and Louisa Coffee each have one outlet.
“We have a very high ambition for our international expansion. We think Singapore and Malaysia are just a starting point. We want to expand to many more countries than we are today,” Edward Titanata, co-founder and CEO of Kopi Kenangan, a leading café chain in Indonesia, told CNBC.
Launched in 2017, Kopi Kenangan operates more than 800 stores in 45 cities in Indonesia and 22 stores across Malaysia.
The brand, known as Kenangan Coffee in Singapore, has opened outlets at Changi Airport Terminal 2, Jewel Changi International Shopping Centre, as well as Raffles City Shopping Center and Takashimaya Shopping Center – all locations that typically feature high-end brands and goods.
“There is no better country to launch our global expansion plan than Singapore. Why? Singapore is a defining hub for Southeast Asia. [People] “All over Southeast Asia, flights are flying into Singapore, just to transit, to travel or to do business,” said Kobe Kenangan's Tirtanata.
“Therefore, we believe that with a successful entry into Singapore, we will be able to strengthen our brand further as we expand into more and more countries.”
Singapore's reputation as a global financial center has attracted coffee brands to the country.
“It's one of those things, if you have a restaurant chain, and you want to open it in New York City, in London,” said Peng Thi Ong, co-founder and managing partner at Monk's Hill Ventures.
“I think they are here in Singapore because we are a financial centre. They want their future investors to know about us,” Ong said.
“It gives them, especially venture funders, very good visibility to international investors,” said Jiangjan Li, founder and CEO of technology research firm Momentum Works.
Luckin Coffee declined to comment, saying it was “still a startup” in the overseas market. It overtook Starbucks as the largest coffee chain in China this year.
“We welcome competition as it expands the coffee market and accelerates the adoption and offloading of coffee consumption,” a Starbucks spokesperson told CNBC.
Singaporeans of all ages, genders and income levels love coffee. A July 2022 survey in Singapore revealed that nearly 55% of respondents said so Bought coffee a week Before scanning.
This compares to the wider Asia-Pacific region which has Lowest per capita consumption of coffee In the world, as revealed by a study conducted by Euromonitor International. The report also noted that coffee consumption is growing slowly as the dominant instant coffee category matures.
The world's largest café chains such as Starbucks and Dunkin' Donuts already have an established footprint in Singapore.
Starbucks has more than 140 stores in Singapore, while The Coffee Bean & Tea Leaf has more than 70 outlets and local chain Huggs has 20 stores, according to their websites.
There's a lot of local competition too. The Housing and Development Board of Singapore said in May that there is 776 cafe They are located in residential areas or neighboring shop houses.
Many international café chains are opening locations in upscale shopping malls and business districts. Their prices also tend to be higher than local options.
A cup of cold brew coffee from Starbucks costs about S$6.30 ($4.73). a cup of Black coffee at a local retail coffee shop For S$1.20 on average, according to CEIC data.
according to Data from Momentum Works Accounting for the cost of living and disposable income in major global cities, Starbucks is seen as having a lower premium in Singapore. This gives Singapore a “broader base for global brands”.
“If you sell coffee for S$4 or S$5, I don't think people will have problems paying that amount of money,” Momentum Works' Lee said.
“The question is how big do you want to be in Singapore? But I think everyone knows they can't get too big in Singapore, but having Singapore as a market is relatively easy to operate in,” Lee said.
Singapore retained the lead As the best business environment in the world for the next five years, thanks to factors such as economic and political stability, according to the Economist Intelligence Unit’s rankings for the second quarter of 2023.
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