Reason for Success of Korean Coffee Franchise in China

Coffee culture of Korea struck China with Hallyu boom.
Korean franchise coffee shops are giving Starbucks, number one coffee franchise in China, a run for its money with feminine interior, customized menus and services and fine-tuned marketing and sales strategies.
Korean coffee chain stores has emerged as a new force in the Chinese market while have captured the hearts of consumers in China.

In a report, the Korea International Trade Association (KITA) said Monday that more than 1,000 Korean franchise coffee shops will be operating across China by the end of the year.

"They still fall behind Starbucks from the United States and UBC from Taiwan, but Korean coffee stores will be able to narrow the gap quickly with growing brand power and management experience and knowhow," the report said.

Their strongest selling point is the range of available sugar and caffeine boosters. While U.S. and European franchises boast at most 40 items on the menu, Korean franchises offer an average of 76, from ice cream to waffles.

Feminine interior of many Korean coffee shops is what differentiated from Starbucks stores in China as well.
When Starbucks entered the Chinese market in 1999, most of their customers were businessmen so Starbucks has strong business atmosphere interior. On the other hand,"Korean coffee chain stores have captured the woman custmer's heart with feminine interior and relaxed atmosphere," experts said.

Korean coffee chain store's unique management system is their reason for success too.
There are 700 stores as of September. Most of them are running on a master franchise contract, in which the the owner of the brand name hands over control of franchising activities in a specified territory to a person or entity, called master franchisee.

Korean coffee chains avoided downtown areas of big cities opening 69% of their shops at suburb, where competition is less fierce, and opened 87% of their shops at downtown areas in smaller towns where rent is cheaper.

Also with plenty of Korean Wave or Hallyu star employed to promote their brands to Chinese consumers as a PPL (indirect advertising in K-drama) has received well as good marketing plan in China.

However, some experts pointed out that some of Korean coffee shops in China are depending on Hallyu wave too much while ignoring the quality of the coffee.