South Korean cafe model brings big rewards for firms

South Korean entrepreneurs are brewing a success story in China with their unique blend of coffee shops in shopping malls and other major locations.

According to industry sources, a growing number of Chinese consumers are sipping coffee at these trendy locations, thanks to the influx of South Korean TV dramas and movies, said Pei Liang, secretary-general of the China Franchise and Chain Store Association.

China is now the largest overseas market for South Korean coffee chain entrepreneurs, said Pei.

"Most of the investors are in their early 20s, and are attached to South Korean brands and products," he said, adding that the number of investors, particularly from the franchising sector, has been rising steadily.

Caffe Bene, a South Korean coffee chain brand, plans to open more than 5,000 cafes in China by 2015.

A Twosome Place, an affiliated coffee chain of South Korea's largest food company CJ Group, opened its first shop in Beijing in 2010 and now has 13 stores in five cities n China.

A spokesman for Twosome said there is great potential for second- and third-tier cities to develop and popular Korean actors have quickly raised their brand awareness last year. Maan Coffee, which launched the first ever South Korean cafe in the Chinese capital, now has over 60 outlets in the country.

Cafe Ku, a Chinese owned coffee and bar chain based in Beijing, introduced business models from South Korea two years ago.

Li Jiangtao, vice-president of Cafe Ku, which has 10 outlets in Beijing, said that the coffee shop business still has huge market potential in China.

"Coffee shops are becoming a social and flexible working place for Chinese people to meet their business partners and friends," he said. "In second- and third-tier cities, family members are gathering at the coffee shops during leisure time."

Wang Hongtao, spokesman of the China Franchise and Chain Store Association, said coffee shops with more coffee and less food are becoming popular and providing a fashionable environment and lifestyle for busy urban dwellers.

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