Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification.
President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004.
The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007.
Photo courtesy of President Chain Store Corp
City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98 billion in sales posted by Starbucks Taiwan.
Those figures, confirmed at PCSC’s investor conference last month, far outpaced the growing fresh coffee businesses of other convenience store chains operated by Taiwan FamilyMart Co (全家便利商店) and Hi-Life International Co (萊爾富).
Part of City Cafe’s success is the popularity and extensive network of the 7-Eleven chain, and with the number of 7-Eleven stores expected to reach 7,000 this year, analysts believe City Cafe sales could reach a new high of almost NT$20 billion this year.
Diversifying its coffee brands has also paid dividends, PCSC said.
With City Cafe celebrating its 20th anniversary this year, PCSC said that 7-Eleven has recently extended its brand offerings from affordable City Cafe to speciality coffee City Prima.
Having a range of products that makes its coffee appealing to more customers has helped City Cafe maintain its leading position in the freshly brewed coffee market, the company said.
Latte and Americano account for 40 percent of City Cafe sales, respectively, while other flavored coffee drinks account for the remaining 20 percent, it said.
Another convenience store chain, FamilyMart, launched its Let’s Cafe brand in 2006 and hired actor Mark Chao (趙又廷) to serve as its spokesman in 2009.
Let’s Cafe generated about NT$7 billion in revenue last year, with classic coffees and single-origin coffees accounting for 45 percent and 55 percent of its fresh coffee sales, respectively, the company said.
Hi Life is trying to carve out a larger share of the market, and spent up to NT$100 million in April to upgrade and refresh its Hi Cafe brand.
Hi Life’s Hi Cafe generated NT$2 billion in revenue last year. Sales up 50 percent year-over-year this year, on pace to push sales up to NT$3 billion for the year as a whole, the company said.
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