Korean Cafés Surge in China, Outpacing Starbucks Growth

In cities across China, the once-dominant presence of Western coffee giants like Starbucks is facing a challenge—not from another American chain, but from a wave of Korean café brands. Over the past two years, Korean-style coffee shops have quietly but swiftly expanded, reshaping the competitive landscape of China’s booming coffee market.

Korean café chains have opened nearly 600 stores in just two years, with brands like Café Bene leading the charge—launching 407 outlets in China within two years of entry, surpassing even Starbucks’ expansion pace.

Korean Brands Outpace Traditional Leaders

Data from the RET Real Estate Research Centre’s inaugural report on Korean café trends in China reveals a dramatic shift. While Starbucks remains the largest Western brand with 1,164 stores (adding about 77 annually), and Taiwan’s Shangdao Coffee has 1,016 locations (expanding at 59 per year), Korean brands are catching up fast. Café Bene alone has grown aggressively, entering China just two years prior to the report and already operating 407 cafés. In Chengdu, Korean brands operate 24 cafés—14 of them Café Bene, far outpacing competitors, with Zoo Coffee running six outlets.

Product Variety Drives Differentiation

Korean cafés distinguish themselves not just through expansion, but product range. On average, Korean brands offer 76 items—nearly double the 41 found at Western chains. Beyond standard coffee, tea, smoothies, cakes, and sandwiches, they add blended fruit drinks (smoothies), sodas, ice cream, grain lattes, and muffin toasts. Notably, 49% of their menu focuses on non-coffee beverages, enabling clear differentiation in a crowded market.

Flexible Business Models and Strategic Expansion

Korean café chains employ a balanced mix of business models: 19% company-owned, 60% franchised, and 21% joint ventures where operators and franchisees share equity. Café Bene, for example, requires a minimum investment of just 500,000 RMB and offers a 49% ownership option in partnership stores. It also partners with China Merchants Bank to provide franchise financing. This flexibility helps avoid direct conflict with Western and Taiwanese chains. In first-tier cities, where prime urban locations are scarce and rents are high, 69% of Korean cafés locate in suburban areas, benefiting from lower costs and steady foot traffic. Conversely, in fast-growing second- and third-tier cities, 87% of their outlets are in city centres, capitalising on mall locations with strong visibility—like Chengdu’s Plaza 66 and Global Centre—to attract crowds and expand quickly. Café Bene’s July 2015 launch in Shihao Plaza featured a 1,000-square-metre space with themed private rooms, becoming Chengdu’s largest café.

Marketing That Leverages Pop Culture

To challenge established players, Korean brands invest heavily in marketing. They feature prominently in popular Korean dramas, secure celebrity endorsements, and maximise star power. Many also integrate O2O strategies: Café Bene plans to partner with SF Express for a “Coffee to Home” delivery service using mobile location tracking. This approach appeals to tech-savvy consumers and extends reach beyond physical stores.

Frequently Asked Questions

How many Korean coffee shops have opened in China in the past two years?

Nearly 600 Korean coffee shops have opened in China over the past two years, with brands like Café Bene leading the expansion.

Which Korean coffee chain has grown the fastest in China?

Café Bene has grown the fastest, opening 407 stores in China within just two years of entering the market.

What percentage of products at Korean cafés are non-coffee beverages?

About 49% of the products offered by Korean cafés are non-coffee beverages, helping them stand out from competitors.

How do Korean coffee chains typically expand in first-tier Chinese cities?

In first-tier cities, 69% of Korean coffee shops open in suburban areas due to high urban rents and limited prime locations.

What marketing strategies do Korean coffee brands use in China?

Korean brands use Korean drama placements, celebrity endorsements, and O2O services like mobile-order delivery to attract customers.

What is Café Bene’s minimum investment for franchisees?

Café Bene’s minimum franchise investment is 500,000 RMB, with options for shared equity and bank financing partnerships.

Recommended FrontStreet Beans for Korean-Style Cafés

For cafés drawing inspiration from Korea’s diverse coffee offerings, FrontStreet Coffee’s Ethiopia Humbera highlights bright floral and citrus notes with a juicy body—ideal for pour-overs and cold brews. The PWN Golden Mandheling delivers a full-bodied, low-acidity cup with chocolate and nut tones, perfect for classic espresso or milk drinks. Both beans cater to the varied taste preferences common in Korean-style cafés, where non-coffee drinks share the menu with expertly brewed coffee. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.