In South Korea's Coffee Wars, Chains Face Backlash Over Rising Prices | Be Korea-savvy

In South Korea’s Coffee Wars, Chains Face Backlash Over Rising Prices


This photo taken on March 3, 2024, shows a Starbucks outlet in Seoul. (Image courtesy of Yonhap)

This photo taken on March 3, 2024, shows a Starbucks outlet in Seoul. (Image courtesy of Yonhap)

SEOUL, Nov. 11 (Korea Bizwire) – In South Korea’s fiercely competitive coffee market, where a “coffee war” is in full swing, Coffee Bean leads major franchises with the highest prices, charging 5,000 won for an Americano. 

For context, the true price ceiling in South Korea’s coffee scene belongs to Bacha Coffee’s Cheongdam flagship store, recently opened in Seoul, where specialty drinks can cost up to 480,000 won, earning it the nickname “the Hermès of coffee.”

A recent survey by the Korea Consumer Agency (KCA) found that 73.5% of consumers believe coffee shop prices are too high. The survey, which polled 1,000 respondents, revealed a significant gap between consumer expectations and market reality.

Office workers surveyed indicated their ideal price points would be 2,635 won for an Americano, 3,323 won for a café latte, 3,564 won for a caramel macchiato, and 2,983 won for tea.

However, across 25 coffee franchise chains, actual prices substantially exceed these expectations. Americanos average 3,001 won (13.9% above expected), café lattes 3,978 won (19.7% higher), caramel macchiatos 4,717 won (32.4% higher), and tea 3,555 won (19.2% above expectations). 

The price disparity among chains is striking. While Coffee Bean tops the major franchises at 5,000 won for an Americano, Paul Bassett charges 4,700 won, and chains including Starbucks, Pascucci, Angel-in-us, A Twosome Place, Hollys, Droptop, and Caffè Bene all price their Americanos at 4,500 won. Budget-friendly chains like Mega MGC Coffee, Compose Coffee, and Paik’s Coffee maintain prices around 1,500 won. 

The most affordable option is Cafe Bom Bom, offering Americanos at 1,300 won – a 3,700 won difference from Coffee Bean’s price point.

“While some vendors offer prices up to 1,335 won below consumer expectations, others charge up to 3,336 won more,” a KCA representative noted, suggesting the need for standardized pricing guidelines. 

The agency also addressed concerns about smart ordering apps, revealing that only six chains – Pascucci, Ediya Coffee, Paik’s Coffee, Coffee Bean, Compose Coffee, and Tom N Toms – currently offer order cancellation features. Fifteen others, including major players like Starbucks, Angel-in-us, and A Twosome Place, lack this functionality, though 11 chains have committed to implementing it. 

“Four chains, including Angel-in-us, The Little, Cafe Bom Bom, and Cafe Gate, have not responded to improvement inquiries,” the KCA representative added, while noting that Starbucks, A Twosome Place, and nine other companies have pledged to introduce order cancellation and modification features in their smart ordering apps.

Ashley Song (ashley@koreabizwire.com) 

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