Number of coffee shop outlets Indonesia 2019-2020, by brand
Es kopi susu, the drink that took over Indonesia
The recent drink trend of iced milk coffee that is sweetened with liquid palm sugar, known as es kopi susu, has shifted Indonesian consumers’ preference from drinking other beverages to milk coffee. It is also the drink that allowed local coffee shops such as Janji Jiwa, Kulo, and Kopi Kenangan, to take over the café market in Indonesia. Es kopi susu allows local coffee shops to combine freshly brewed espresso with traditional flavors at an affordable price. A cup of es kopi susu starts at 1.2 U.S. dollars, whereas higher-end coffee shops, such as Starbucks, sell their iced lattes about 2.5 times higher than the local alternative.Local coffee shops are adapting to the lockdown measures faster during the COVID-19 pandemic
Local coffee shops have proven themselves to be strong competitors to Starbucks in Indonesia. While the local coffee chains have been focusing on the middle-income consumers and the grab-and-go model, Starbucks Indonesia was investing in larger spaces with comfortable seating areas in locations that target more high-income consumers. This can be observed in 2019 when Starbucks opened the luxurious Dewata Coffee Sanctuary in Bali, while local coffee shops were more present in residential areas and the suburbs.During the COVID-19 outbreak, these strategies seemed to work better as their customers were mostly working from home. They adapted by selling pre-mixed one-liter bottles of es kopi susu and working with companies such as Go-Jek, Tokopedia, and Traveloka, to deliver their coffee out to consumers. The local coffee chains had proven themselves to be more innovative in meeting the challenges posed by the COVID-19 pandemic. International chains such as Starbucks might need to improve their strategies to say competitive in the market.