The rise of Indonesia’s modern concept of coffee shops

Last week we wrote about how young Indonesians love going to the Cinemas which makes it a great customer acquisition channel. This week we present another trend that has been on the rise among Indonesians- a coffee cafe culture. 

Indonesia’s obsession with coffee consumption is at an all time high these days. For decades, Indonesia has been producing premium quality of coffee and they’re currently the 4th largest coffee producer in the world. Their realization of Indonesian premium quality of coffee has changed the way Indonesians consume their coffee. Coffee has become an intrinsic part of daily life here and this has caused many coffee shops to pop up everywhere across some major big cities. For the last 5 years, Indonesian coffee shops have doubled in number. These coffee shops often adopt the coffee drinking style in the US and Australia since many Indonesians have been there to study.

“Nongkrong”or “Ngopi-ngopi” cafe style

Nongkrong or ngopi-ngopi means to hang out with friends or families in coffee shops and these local coffee shops in Indonesia enable customers to do exactly that. They design their coffee shops as unique as possible where some people find it so comfortable that it feels like their second home. They can enjoy spending time there whether for work or just hanging out. Some people also think that coffee shops can increase their productivity level and some coffee shops in Indonesia provide plugs and super fast internet. Some international brands such as Starbucks Coffee and Caribou Coffee even design their coffee shops to suit Indonesian “Ngongkrong” lifestyle.

Local vs International Coffee Shops

Some international coffee brands such as Starbucks in Indonesia need to be ready to compete with Indonesian local coffee shops because the new coffee shops offer more affordable coffee with a different unique style. Starbucks coffee opened in Indonesia in May 2002 and as of January 2018 they already have 326 cafes in 22 cities across Indonesia in some major big cities. On the other hand local coffee shops started to boom in Indonesia since 2013 and currently there are more than 4,000 new local brands mainly in Jakarta.

There are some major differences in the customer profiles between local coffee shops and international brands. Customers in local coffee shops tend to be those who really enjoy coffee and want to try unique coffee experiences. They enjoy the experience of coming to the local shops, chatting with the barista over a cup of coffee and learning more about the story behind the coffee beans. Other major customers for local coffee shops are young people who have either limited budget or some community or they want to share their experience of visiting unique cafes with novel designs on social media (sharing photos on instagram). On the other hand, majority of customers for international brands are working professionals and people who look for places to hold meetings.

Types of Indonesian Coffee Shops

Local coffee shops in Indonesia need to offer a unique experience and good quality in order to be able to compete in the market. There are two types of coffee shop styles in Indonesia. The Café style and the hole in the wall coffee shops. The Café style coffee shops are more unique in their interior designs and they serve more modern varieties of coffees like espresso, latte, and etc. One of the most famous local coffee shops in Indonesia is Anomali Coffee. They currently have 13 shops in some cities in Indonesia.

Hole in the wall coffee shops on the other hand have smaller spaces from where they serve coffee and they usually don’t have any seating arrangements or  unique interior design. Their focus is mainly on the taste and flavour of the coffee. One of the famous hole in the wall coffee shops is KULO.

The Future

In the near future, local coffee shops will probably grow even more since drinking coffee has become a tradition and a part of everyday lifestyle in Indonesia. This will give international brands a hard time because foreign coffee shops must compete with their local counterparts not only over the price but also in terms of unique experiences through their designs. However, this doesn’t mean that local coffee shops can afford to stay stagnant in the market because with new coffee shops mushrooming every other day, the old ones must evolve as the time goes by.