Coffee shops are a great place to grab a cup of coffee, hang out with your friends, and get some work done. There are many reasons to love coffee shops; unique ambiances, chill vibes, the beverages. Coffee shops are a great place for us who wants to spend our time alone, or with companies.
The coffee shop business is recently booming. This can be seen from the significant increase in the number of coffee shops that approximately began in 2016–2017.
What really happened in Indonesia’s coffee trend and where does that leave Indonesian’s Local Coffee Shop in its market?
Trend Shifting in Indonesian’s Youth
Indonesians like to hang out, a lot, and that is what coffee shops have been provided. As the local coffee shops established in Indonesia, it has become a trend to find joy in their bitterness.
In the past, the Indonesian youth may see coffee as a beverage that only consumed by older people or to keep them up at night and for a college student who got a deadline in the morning, but nowadays they began to learn the background of their coffee, try to have a deep understanding of what they drink.
Coffee has become a new commodity in Indonesian’s pop culture. With indie trends becoming popular, coffee made its own way in the culture for example through songs, poems, novels, and movies.
For example, when the movie and the novel Filosofi Kopi romanticize coffee in their own creative way to promote freshly brewed coffee drinking helps to promote this activity.
In the development of the local coffee shops, they were eventually segmented by their customers, there are coffee shops to hang out with your friends, and there are coffee shops where you can sit by yourself and increasing your productivity.
Each coffee shops innovating in their own way, some innovates their menu to create new beverages, some innovate by adding roastery as their uniqueness. That is how we as customers served with a broad range of options on how we would like to enjoy our coffee.
The local Indonesian coffee shop established in the youth’s market through its passionate marketing and became new alternative spots to hang out for the people, with uniqueness in every corner and tastes that serve the customers well at affordable prices. It is not only established as a business commodity but also becoming a new trend and lifestyle that suits young Indonesian.
David vs Goliath?
At the first glance, we see this new trend as an alternative for tasting a premium coffee at a more affordable price. So if we look at it from a business perspective we might think that the establishment of local Indonesian coffee shops is a threat to the high-end premium coffee brand such as Starbucks for example. But, is it really what is going on between them?
According to Toffin who conducted independent research back in 2019, they found that the number of coffee shops in Indonesia was 2,950 outlets in August 2019 which is increasing wherein 2016 there were 1,000 outlets.
With their “competitor” developed in a large number, the giant brand such as Starbucks, according to Business Insight in their article, Starbucks Indonesia has the potential to generate revenue of Rp 2.7 trillion throughout 2019. Which we can learn that they were not actually threatened by the developing local coffee shops.
One factor that may reasonable in it was because they targeted a different market. We can see that Starbucks targeted the high-end market as many of its outlets are located in business or office districts.
While the local coffee shops are scattered throughout the city focusing on teenagers to young adults as their target market or we can say they are living in the middle-end.
Turns out, regardless of playing in the same industry, both are competing through their innovations promoting their products to their own markets, for the sake of promoting coffee drinking culture.
