Tim Hortons Asia-Pacific recently announced an exclusive agreement with Marubeni Growth Capital Asia (MGCA) to launch its cafes across Singapore. The two companies are also in discussions to expand their collaboration to Malaysia and Indonesia. With the partnership, Tim Hortons is gearing up to tap the post-pandemic revival of the estimated $2 billion coffee & tea shop market* in the three Southeast Asian countries, says GlobalData, a leading data and analytics company.
The move is in line with Restaurant Brands International’s plans to diversify its geographic base and expand its Tim Hortons brand across Southeast Asia. The partnership also marks the expansion of the Japanese trading conglomerate, Marubeni into the foodservice business. Marubeni aims to leverage its existing retail network in Southeast Asia and the MGCA platform under its newly established Next Generation Corporate Development Division to rapidly scale up Tim Hortons’ café chain in the three countries.
Bobby Verghese, Consumer Analyst at GlobalData, comments: “Tim Hortons and Marubeni aim to capitalize on the blossoming coffee culture in Southeast Asia, fueled by the rapid urbanization and Westernization. Multinational and regional coffee and tea shop chains have proliferated across the top cities in the region, offering students and white-collar workers a convenient spot for business meetings and social gatherings alike.”
“With their stylized and relaxed ambiance and free Wi-Fi, upmarket bistros encourage guests to work, hold meetings, meet up with friends, peers, and colleagues, catch up on social media or reading, or even enjoy board games, as they savor their menu. The trendy Western-Eastern fusion food and drinks with social-media-worthy presentation are another key factor attracting Millennials and Gen Z crowds to these cafés and tearooms.”
Tim Hill, Key Account Director at GlobalData Singapore, adds: “Influenced by Western lifestyles, Asian youth are getting accustomed to grabbing a ready-to-drink coffee enroute to college or office or dropping by a nearby café during coffee breaks. Coffee and tea are quickly replacing alcohol as a social lubricant, especially in countries with a sizable Muslim population, such as Malaysia and Indonesia. GlobalData’s Q4 2022 consumer survey** affirms this, as about 42%-46% of the Indonesia, Malaysia, and Singapore survey respondents said that they ordered food at least once a week from coffee and tea shops over the last quarter. In contrast, only about 18%-19% of respondents from the three countries said the same about ordering food from pubs, clubs, or bars.”
Verghese concludes: “Tim Hortons has timed its launch to capture this resurgence in out-of-home dining and tourism activity in the region after authorities lifted all COVID-19 restrictions. The Canadian café operator’s arrival poses a strong challenge to Starbucks, Janji Jiwa, Tealive, Chatime, and J Co Donuts & Coffee, which together operate a third of outlets in the highly fragmented coffee & tea shop market in Singapore, Malaysia, and Indonesia*. While high inflation will restrain consumer spending in the immediate future, as the three economies recover fully from the fallout of the pandemic and the Russia–Ukraine conflict, the coffee & tea shop market is set to boom.”
* GlobalData Foodservice Intelligence Center – Market Analyzers, accessed in March 2023
** GlobalData Q4 2022 Consumer Survey – Asia-Pacific, with 6,290 respondents, published in November 2022
