South Korea has seen a remarkable surge in the number of coffee shops in recent times, with the industry becoming a beacon for entrepreneurial spirit. Data reveals that Koreans are avid coffee enthusiasts, drinking an average of over 400 cups per person annually. Last year, coffee imports in Korea surpassed 1 trillion won, marking the second consecutive year reaching the $1 billion milestone.
The number of coffee shops in Korea has seen a significant expansion, growing from less than 70,000 in 2019 to over 100,000 last year. This growth is comparable to the combined size of convenience stores and chicken restaurants, which are considered representative of the booming self-employed sector.
(source: Brand Reputation Index, October 2023)
The diverse landscape of Korea’s cafe culture offers consumers a wide range of options, from well-known chains to unique, themed cafes and specialty coffee houses. This variety allows individuals to find a space that caters to their personal preferences. For the younger generation, cafes have become more than just places to enjoy a cup of coffee, evolving into hubs of daily activity where people can study, work, socialize, and resting.
The low start-up costs and relatively accessible skill level required to operate a coffee shop are cited as the primary factors driving the increase in new coffee ventures. Unlike in the past, when people often chose to start a business after retirement, more younger individuals in their 20s and 30s are now actively engaging in entrepreneurship, opening coffee shops as a means to challenge themselves and pursue their dreams.
However, the coffee market has become increasingly competitive, with low-cost franchises rapidly expanding and reshaping the industry landscape. Consequently, many cafes are facing closure, as entrepreneurs grapple with challenges like exorbitant rents and market oversaturation. Furthermore, the lack of regulatory measures, such as restrictions on the proximity of cafes, has been identified as a contributing factor to the fierce competition, prompting calls for industry-wide regulations to safeguard small business owners.