Low-Cost Coffee's New Expansion Phase
Combining Value, Standardization, and K-Emotional Appeal
Expanding Reach to Southeast Asia, Mongolia, and North America
Korean low-cost franchise coffee brands are creating new opportunities overseas. As the domestic market becomes saturated due to sluggish demand, the standardized operating methods, reasonable pricing strategies, and rapid menu development capabilities accumulated in Korea are emerging as competitive advantages abroad, driving the spread of 'K-value-for-money' cafes. With growing global interest in Korean lifestyle, fueled by K-content, Korean-style low-cost coffee brands are expanding their influence not only in Southeast Asia, Mongolia, and Japan, but also in North America.
According to industry sources on December 5, major domestic low-cost coffee brands are actively entering overseas markets. These brands maintain almost identical store interiors, menu selections, emotional posters, and music abroad as they do in Korea. Rather than simply selling coffee, they are essentially exporting a 'Korean-style cafe experience.'
This sense of familiarity, experienced by overseas Millennials & Gen Z who have encountered Korean cafe culture through K-dramas and YouTube, has become a key factor in brand selection. Reasonable prices compared to local living costs also serve as a competitive edge.
The most notable example is MegaMGC Coffee. After opening its first store in Ulaanbaatar, Mongolia last year, MegaMGC Coffee expanded to five locations within a year. The brand quickly established a foothold in the region, gaining popularity as a 'Korean-style emotional cafe.' Paik's Coffee is leading the charge in Southeast Asia, operating a total of 18 stores in the Philippines, Singapore, and other locations. Compose Coffee opened its third store in Singapore this year, while Mammoth Coffee launched its first store in Japan. The Venti has already entered Japan and Canada, and plans to open its first store in Las Vegas, United States, in the second half of next year. In the U.S., the brand is implementing a menu strategy that combines regional consumption trends with K-beverages such as yulmu (Job's tears) and misutgaru (mixed grain powder).
While the number of cafes in Korea has already surpassed 100,000 and the pace of new store openings is slowing, the industry notes that the same operating model is being received as something new overseas, fueling rapid expansion.
Stores of domestic low-cost coffee brands located in a building in Jongno-gu, Seoul. From the left, Mega Coffee, Compose Coffee, Paik's Coffee, and The Venti Coffee, skipping one. Photo by Hyunghan Heo
However, there are clear hurdles to overcome in the process of expanding abroad. It often takes at least a year just to prepare for launching a store, including building brand awareness, finding local partners, and selecting locations. Country-specific regulations and licensing procedures are also variables. For this reason, many brands are actively recruiting models with global recognition. Son Heung-min (Mega Coffee), V of BTS (Compose Coffee), and G-Dragon (The Venti) are prime examples. The strategy is to use these figures as 'symbolic assets' that can quickly communicate the brand to overseas consumers.
The industry believes that, since Korean cafe franchises already have a 'fully developed operating format,' the pace of business expansion in overseas markets will accelerate even further. Based on price competitiveness and trend responsiveness, analysts expect that 'K-value-for-money cafes' are highly likely to establish a unique position in the global market.
An industry official commented, "Overseas consumers do not visit Korean cafes simply because the prices are low. Fast turnover, consistent quality, and clean store management-these Korean-style operating methods are being accepted as a standard of service." He added, "This operating model is difficult for local brands to easily imitate, which gives Korean low-cost coffee brands a competitive advantage."
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