A recent investigation into South East Asia’s branded coffee shop market has found that China shows the strongest potential for growth in the region. Allegra Strategies has found that with an estimated 5391 branded coffee shop outlets, China is the current market leader in American-style chains in South East Asia, and since adding 1462 outlets in the last 12 months, its market is growing the fastest. The report found that, helped by a huge push from Starbucks, the Chinese market is growing by the equivalent of four new stores every day. Starbucks is present in each of the nine countries covered in the report, which includes, Hong Kong, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam and Indonesia, and is the market leader in six. At current, Starbucks has 3213 outlets across the nine countries, earning it a generous 22 per cent of the total South East Asian market share, Allegra found. China is Starbucks most developed market in the region, with the coffee giant hoping to increase its outlets from 1700 to 3000 by 2020. The second largest share of the South East Asian branded coffee shop market went to McCafe, with Allegra identifying 1517 outlets across the nine countries. Despite having no presence outside of its home nation, Thai chain Café Amazon’s 1130 outlets make it the third largest chain in the region, with an 8 per cent share of the market. Allegra Strategies said that the regions aspirational café culture is fuelling growth for international chains, with particular appeal to younger consumers. “Consumers are now more knowledgeable about speciality and good quality coffee,” said Allegra. “Which, alongside the development of a strong artisan coffee shop scene in key markets including Singapore, Malaysia, Taiwan and Thailand, is driving the sector.” Allegra said beverage localisation is also important, with green tea lattes and iced beverages popular with Asian consumers. “The region’s hot climates mean that iced beverages are the most popular, with an 80:20 share of total beverage sales, except in Singapore where hot beverages are more popular due to the expat demographic,” said Allegra. “Asian consumers also prefer exceptionally sweet food and drink, which can be seen by Starbucks’ dose of 22ml of syrup in Asia compared with 4-5ml in the West.” Allegra predicts that the second largest growth market for coffee chains in the region is Indonesia. It found that with a relatively low number of branded coffee shops at present, Vietnam shows the third strongest percentage for growth opportunity. Allegra predicts that the South East Asia branded coffee shop market will exceed 24,000 outlets by 2020, representing overall growth of 11 per cent.