As foreign café brands rapidly enter the South Korean market, domestic coffee companies are increasingly focusing on international expansion. With the South Korean market nearing saturation and global interest in K-food rising, these brands are looking abroad to secure their future.
In May, Hollys opened its first overseas store in Osaka, Japan. Located in the bustling Namba Marui area, this marks Hollys’ first international outlet since launching in South Korea in 1988. The café is positioned in front of the Marui department store, a prime spot in Osaka.
Hollys established a local subsidiary in Japan to tap into the popularity of Korean-style coffee drinks and desserts among Japanese consumers in their twenties and thirties. The store offers not only standard drinks available in South Korea but also limited-edition items like the Yakgwa Cream Latte.
“The Yakgwa Cream Latte, inspired by traditional Korean desserts, outsells the regular Americano by about 1.5 times and has become the signature menu item at the Namba Marui store,” a Hollys spokesperson said.
Ediya Coffee has set its sights on the world’s largest coffee market, the United States. In December, Ediya Coffee opened its first overseas franchise store at the Micronesia Mall in Guam. The company plans to open its third store in Guam this year.
“In our Guam store, Korean-inspired items like Honey Hotteok, Dalgona Latte, and Black Sesame Bungeoppang are particularly popular,” an Ediya Coffee representative said. “Our locally tailored menu has attracted both tourists and locals.”
Ediya Coffee also plans to enter the Malaysian market this year. In June, the company signed a master franchise agreement with a local food service and distribution company in Malaysia. Malaysia is expected to be a key market for Ediya Coffee to showcase its competitiveness in the halal sector. The company plans to open 200 stores across Malaysia within the next five years, using this experience to expand into other global halal markets.
Meanwhile, Paik’s Coffee, a brand under The Born Korea and managed by chef Paik Jong-won, currently operates eight stores in the Philippines and two in Singapore. Paik’s Coffee began its overseas expansion in 2016, with its first locations in China and Singapore.
Mega MGC Coffee also ventured into the international market by opening its first overseas store in Ulaanbaatar, Mongolia, in May. The store is located on the first floor of AsiaPharma’s headquarters.
“Mongolia has a high percentage of young people and a favorable perception of Korea, which we believe will contribute to our success,” a Mega MGC Coffee representative said. “With more than 150 menu items, including coffee, ades, and frappes, we aim to cater to diverse consumer preferences.”
The South Korean coffee industry has faced challenges due to market saturation in recent years. According to Statistics Korea, the number of coffee shops in the country surpassed 100,000 for the first time in 2022, nearly doubling from 51,551 in 2016.
Recently, foreign brands like the U.S.-based Intelligentsia, Canada’s Tim Hortons, and Japan’s No Coffee have entered the Korean market, intensifying competition by catering to the increasingly refined and sophisticated tastes of local consumers.
“Unlike other food items, beverages and desserts like coffee face relatively low entry barriers in terms of consumer preferences and production methods, making it easier for Korean brands to expand overseas,” said a Korea Barista Association representative. “However, many of the countries they are targeting already have well-established coffee brands dominating the market. Additionally, the popularity of K-food could be a temporary trend, so careful planning and strategic operations are essential for long-term success.”
