% Arabica Celebrity Coffee Brand seeks New financing

According to the World Coffee Portal forecast, by 2025, China's coffee chain stores will exceed 36,000. Although China has been disrupted by waves of COVID-19 outbreaks since the end of 2019, the development of the catering industry has had its ups and downs, none of which has affected the idea that the Chinese market is considered an important growth market for domestic and foreign coffee chain brands. At a time of falling funding enthusiasm, operators of a popular coffee chain are seeking new financing.

At one time, the largest chain brand in China's coffee market was Starbucks from the United States. Since the epidemic, the rapid growth of China's coffee market has spawned a number of coffee chain brands with similar strength, such as Ruixing Coffee, Manner, M Stand and so on.

According to a Bloomberg report on July 21, a person familiar with the matter said that Fumeng International Co., Ltd., the controlling shareholder of the fine coffee brand %Arabica China operating entity, is seeking to raise about $300 million to support the brand's expansion in the coffee market in China, and relevant personnel have contacted potential investors about the round of financing.

Fumeng International valued it at $800 million to $900 million in its last round of funding, and this round seeks a valuation of $1.2 billion. It is reported that Fumeng International has listed PAG and General Atlantic as investment supporters.

It is understood that %Arabica originated from China Hong Kong and then successfully exploded in Kyoto, Japan. % The biggest feature of Arabica brand is that the decoration, design and packaging in the store adopt minimalist style, with neat lines and pure white elements as visual elements, attracting many netizens to take photos and punch cards.

%Arabica currently has stores in many cities around the world. In February 2018, %Arabica opened its first store in mainland China on Wukang Road in Shanghai, which is also the 14th store in the world. Like many online stores in Shanghai, the store has become a target for people to queue up.

Subsequently, %Arabica opened stores in key first-tier and second-tier cities nationwide. While %Arabica is expanding rapidly in the Chinese market, the brand is expanding its layout in key cities around the world. In just a year and a half, %Arabica has grown 27 stores, with China accounting for 12. Under the management of Fumeng International, %Arabica, as a Japanese coffee brand, has the largest number of stores and the fastest growth rate in the Chinese market.

According to the official website of %Arabica, the brand operates 118 stores in 17 countries and regions, of which 61 stores are opened in the mainland of China, Hong Kong and Macau, which shows the rapid development of China's coffee market.

However, compared with %Arabica's entry into the Chinese market, it is no longer pursuing niche as usual. While the expansion speed is accelerating, the halo of online fame has been gradually weakened. The site is selected from petty and exquisite art galleries, street buildings, etc., but into more popular shopping centers, office buildings, etc. At the same time, the brand is also exploring more possibilities to expand its target customers.

However, such expansion logic belongs exclusively to the Chinese market. Today, %Arabica has only four stores in Japan.

Looking at the distribution of its stores in China, %Arabica has tried to expand in the second, third and fourth tier cities in addition to the dense layout in the first-tier key cities.

If Fuding International can successfully obtain more capital support this time, %Arabica may be a large-scale expansion store in the Chinese market. But China's boutique coffee market is becoming crowded. Arabica's fame aura gradually fades, how to expand while maintaining fine quality, this is every boutique coffee brand is facing the challenge.

Image source: %Arabica official website, network

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