People line up at a Hollys coffee shop in Osaka, Japan, Aug. 1. Courtesy of Hollys F&B By Ko Dong-hwan Korean coffee franchise companies are accelerating their global expansion as the domestic market becomes increasingly saturated with both franchise and independently-owned coffee shops, according to the companies and industry experts, Wednesday. The trend is also a sign of the dynamic coffee market in Korea, where renowned international brands such as Bacha Coffee, Intelligentsia and Ralph's Coffee are looking to expand their presence. Hollys F&B, which has been operating the Hollys coffee franchise since 1988, opened its first overseas store in Japan in May. The directly-managed store is located at Namba Marui shopping mall in Osaka. The store features a selection of beverages with Korean-themed ingredients, including "yakgwa" a deep-fried, honey-infused traditional confectionery, and Hallabong oranges from Jeju Island, alongside the brand's standard menu items. The Yakgwa Cream Latte has become the store's signature drink, selling 1.5 times more than the regular Americano, according to a Hollys official. Ediya Coffee is also expanding its presence in overseas markets, especially in the United States and Malaysia. After opening its first U.S. store at Micronesia Mall in Guam last December, the company plans to open a third store in the country within this year. Localized menus, along with Korean desserts such as bungeo-ppang, fish-shaped pastries stuffed with red bean paste, have become popular among local consumers, according to the company. An employee at Ediya Coffee's store at Micronesia Mall in Guam serves a customer in this undated photo. Courtesy of Ediya Coffee Ediya Coffee also signed a master franchise agreement with a local company in Malaysia in June to open its first cafe in the country this year. The company noted that the cafe's successful business in Malaysia, which has a predominantly Muslim population, positions it well for expansion into the global halal market. Additionally, Ediya aims to grow its franchise locations in Malaysia to 200 over the next five years. Paik’s Coffee, a major low-cost coffee franchise, currently operates eight shops in the Philippines and two in Singapore. Additionally, Mega MGC Coffee, another low-cost coffee brand, opened its first overseas shop in Ulaanbaatar, Mongolia, in May. The coffee shop market in Korea has been steadily growing for years. By the end of 2022, the total number of coffee shops surpassed 100,000 for the first time, more than doubling the number from 2016. An official at the Korea Coffee Barista Association, a private organization advocating for baristas' business opportunities, said that compared to other foods, coffee and desserts are generally easier to market to local consumers worldwide. This is due to their simpler recipes and limited varieties. He added, however, that the global popularity of Korean food and beverages, known as K-Food, might be fleeting. Coffee franchises venturing overseas should develop strategies that are not overly reliant on this global trend.
