Indonesia’s top coffee chains bullish about Singapore expansion in crowded market
[JAKARTA] The chiefs of Fore Coffee and Kopi Kenangan – two major coffee players in Indonesia that recently expanded to Singapore – remain confident they can succeed there, even after the surprise closure of Flash Coffee’s 11 stores was proof of how unpredictable the business could be.
Vico Lomar, the chief executive officer and co-founder of Fore Coffee, told The Business Times on the sidelines of a conference in Jakarta on Wednesday (Oct 18) that he will “exercise greater caution” in his ongoing overseas push.
Fore Coffee is on track to open its first store in Singapore at the Bugis Junction mall on Nov 9, and Lomar said that his team has done its homework ahead of its big debut in the Lion City.
“We don’t want to rush things. We’ve been planning to enter Singapore since 2021. We want every store that we open to be profitable,” he said, adding that competition in Singapore’s increasingly saturated coffee market is “fierce” with many major international brands such as China’s Luckin Coffee making significant inroads.
He said that Fore is on track to open a total of 200 stores this year, the bulk of which are in Indonesia.
James Prananto, the president-director of Kopi Kenangan, expressed his optimism about the Singapore market despite Flash Coffee’s shock pullout last week.
Flash Coffee, which opened in Singapore in 2021, said the closure was part of a consolidation of the business and to focus on other promising markets.
“(Their exit) is not a systemic problem in the industry,” said Prananto. If it were, then you would see other coffee chains collapse as well. This is just one company.”
He noted that coffee consumption in Singapore is about 2 kg per capita, higher than the 1.4 kg in Indonesia, and this presents plenty of opportunities for new players like Kopi Kenangan.
Kopi Kenangan recently opened its first two outlets in Singapore, with two more on the way by the end of December. Earlier this year, the company began operations in Malaysia where it currently has 20 stores. In its home market of Indonesia, there are more than 850 stores scattered across the country.
“We are confident in ourselves. We want to create a coffee business that is disruptive to the market and liked by our customers. We feel that we are accepted in Indonesia and Malaysia, and in Singapore too,” said Prananto.
While he always has one eye on his competitors, Prananto said the key when going overseas is to prepare well and execute the business plan effectively.
“For us, the preparation is very important. It took us a year before we were ready to go to Malaysia, and we are very careful when we decide on which market to expand to,” he said.
Both Lomar and Prananto were speakers at a session titled “Caffeine wars: The importance of coffee in Indonesia’s direct-to-consumer sector” on the first day of the Tech in Asia Conference.
Indonesia – the largest economy in South-east Asia – is one of the world’s biggest producers of coffee and a leading exporter. Last year, the country produced 794,800 metric tonnes of coffee – a sizeable jump from the 765,415 tonnes in 2021.
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