Southeast Asia’s caffeine wars

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In the last year alone, it seems like there’s been an influx of Asian coffee chains making their forays into Singapore. Within the span of a few months, both Fore Coffee and Kopi Kenangan have opened up outlets in the city-state. Luckin Coffee, too, has made its entry into the country, and it seems to have expanded pretty quickly.

Of course, there’s been a casualty in the space as well – Flash Coffee exited the market in October.

I’ve yet to try drinks from any of these new brands that have entered Singapore. But judging from the queues and crowds I’ve seen around their outlets, things seem to be off to a good start.

However, the coffee war in Southeast Asia has only just begun, as we discover in today’s premium story.

Today we look at:

• Clash of the coffee chains in Southeast Asia
• A cultivated meat startup that’s raised seed money
• Other newsy highlights such as ByteDance’s share buyback plans and Twitch’s exit from South Korea

Premium summary

Caffeine overdose

Image credit: Timmy Loen

A recent report by venture builder Momentum Works estimates that Southeast Asians spend US$3.4 billion annually on modern coffee shops. It’s no surprise then that competition is heating up in the Southeast Asian coffee space, with many players fighting for a slice of this pie.

• That’s a lot of coffee: Brands like Fore Coffee and Kopi Kenangan have expanded outside of their domestic markets, and new contenders like Pickup Coffee and Tomoro Coffee have emerged. At the same time, China’s Luckin Coffee has also landed in Singapore and may use it as a springboard to expand into other parts of Southeast Asia.
• Grow and go: These coffee chains are tech-enabled, merging tech with traditional brick-and-mortar services to streamline business processes while giving customers tailored recommendations and a smoother ordering experience. However, basic tech alone might not be enough to justify these coffee chains’ valuations and accelerate their growth like tech startups. This is where the highly scalable “grab and go” model comes in.
• A local advantage? Southeast Asia is part of the world’s “coffee belt,” countries that have the most ideal growth conditions for coffee plants. However, while Indonesian companies like Kenangan and Fore directly collaborate with local smallholder farmers to secure a steady supply of quality beans, there are limits to that advantage.

Read more: Clash of the cuppas in SEA as China’s Luckin enters the scene

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