“The 3rd Place” - Starbucks
It’s the second topic of my guidebook. Starbucks has been No.1 coffee shop brand in Korea, both in name and reality.
Let’s look into Starbucks Korea’s business and their performance. Please enjoy our journey.
1. Corporate Overview
Starbucks Coffee Korea started its business as a joint venture of which Shinsegae and Starbucks Coffee International, Inc., owned 50% of each, with the first store in front of Ewha Women’s University in 1999. After then, Starbucks Korea opened the 100th store in 2005, and finally reached 1000th Cheongdam-star store in 2016. For now, Shinsegae’s 50% stake was transferred to Emart(a representative hypermarket retailer in Korea), an affiliate of Shinsegae Group.
Company Name | Starbucks Coffee Korea
Homepage | https://www.starbucks.co.kr/
Business | Coffee shop operation, wholesale of coffee and related goods
Sales(Y2019) | 1869.6 billion won
Number of employees(Y2018) | 14,846
Business Units & Product Portfolio
(1) Business Units
- Stores:
Store positions made up of in the order of Barista → Supervisor → ASM (Assistant Store Manager) → SM (Store Manager) → DM (District Manager). From ASM employees can enjoy all the benefits given to an regular employee of Shinsegae, as the Shinsegae employee. - Supporting departments:
The support department is mainly divided into Business management / Procurement & Logistics / Sales & Marketing. The marketing department consists of PR & CSR / Customer Relationships / Brand marketing (event and promotion) / Digital marketing / Category (drink, food, MD) Development.
(According to Starbucks’ recruiting website.)
(2) Product Portfolio
- Beverages: Based on espresso using the finest Arabica beans, about 40 kinds of coffee drinks, about 20 kinds of non-coffee drinks and whole beans
- Foods: About 40 kinds of products that go well with coffee, such as bakeries and snacks.
- Merchandising: A variety of coffee-related products, such as mugs, tumblers and coffee brewing equipment.
(According to Starbucks’ recruiting website.)
2. Business Results
Market Share
It’s hard to find statistics on the accurate market share of coffee shops. According to industry officials, Starbucks ranks first with 25-30% of market share, No. 2 company Twosome Place estimated to be around 5~8% and The Coffee Bean & Tea Leaf estimated to be around 4 percent, while following Hollys, Ediya, Angel-in-us and Tom N Toms are competing in the coffee shop market as the top seven major brands in market share.
Financial Information
Starbuck Korea recorded about 1869.6 billion won of sales and about 175.1 billion won of operation profit in 2019.
source: NICE evaluation, graphic by Saramin(Korean job portal website)
The next article will cover the industry trends and the marketing strategies and activities.
Please stay tuned!