Malaysia’s Coffee Showdown

The Malaysian coffee market is heating up, especially with the potential entry of Luckin Coffee through a partnership with $BJFOOD / 5196 (BERJAYA FOOD BERHAD), and ZUS Coffee secured RM250 million in private equity funding for expansion. The competition is growing fierce.

According to data from The Edge, ZUS Coffee currently has the most outlets and a profit margin of 4.9%. Starbucks Malaysia, operated by Berjaya Food, follows with 408 outlets and a higher profit margin of 11.8%. Alongside these key players, the market is crowded with familiar names like OldTown, CBTL, Bask Bear, HWC, San Francisco Coffee, Kenangan Coffee, Dome Cafe, Costa, and Oriental Kopi. It's worth noting that some of these brands, like OldTown and Oriental Kopi, are not strictly coffee-focused; they also serve a variety of foods, attracting customers for more than just coffee.

However, it's important to acknowledge that several of these brands are currently operating at a loss, including CBTL, Bask Bear, HWC, Kenangan Coffee, San Francisco Coffee, and Costa. This highlights the highly competitive nature of the market, where profit margins are thin, and even major brands struggle to stay profitable. With the anticipated entry of Luckin Coffee, the competition is expected to intensify further.

Notably, this overview doesn't even cover all the coffee chains in Malaysia, such as Cafe Amazon (Thailand), Cotti Coffee (China), and Cong Ca Phe (Vietnam)—all prominent brands in their respective countries that have already entered the Malaysian market. The outlook suggests that competition will only become more intense in the near future.