Meet the Southeast Asian tech-enabled cafe chain out to conquer the world

ising middle class,” David Brunier, co-founder and CEO of Flash Coffee, told Inside Retail. “It’s hard to miss our Pantones splashed out on our storefronts and across our branding.

“We position ourselves as a bold, lifestyle-driven consumer brand, that celebrates expression and sparks trends – with a goal to empower our customers, employees and community.” 

Flash Coffee aims to reimagine the ordering process by allowing customers to order in advance via a mobile app, eliminating the need to queue. They choose their own pickup store, or are directed to the one nearest to them. The company also uses sensor technology to track stock and orders, demonstrating efficiency and ensuring ingredient supplies match demand.

“We see Flash Coffee as a tech company at its core,” said Brunier.

“We’re digitalising the stores, we’re digitalising the way the consumers are ordering, and it’s a game-changer to retail. 

“As an operator, we get to target our customers more proactively. Retention is the new acquisition, especially in our business, where people will come back 10, 20 times per month. Once we’ve acquired one customer, it’s all about bringing them back. And having that access to customers – that is the game-changer.”

According to Bruiner, Flash Coffee’s core customer base comprises millennials; young professionals aged 18 to 35 and part of Southeast Asia’s burgeoning middle class.

“Our customers are tech-savvy and keep up with digital advancements. They lead fast-paced, busy lives, and our business model caters to their lifestyle needs – allowing them to grab their daily cup of coffee as quickly, and with as little fuss as possible,” he said.

Flash’s concept is not new, being somewhat similar to China’s controversial coffee chain Luckin Coffee. But where Luckin has stuck to the huge Chinese market, opening somewhere around 6000 stores to date and counting, Flash Coffee is focusing on being one of the fastest-growing coffee brands in broader Asia. 

While a fraction of Luckin’s size – it has just 250 stores across seven markets to date two years after its inception – it is free of Luckin’s controversial baggage. The falsification of sales data impacted Luckin’s New York Stock Exchange listing and spoiled its international reputation, leading to a US$175 million settlement of class action lodged by disgruntled shareholders, along with regulatory fines and penalties.

Flash Coffee was founded in Indonesia, but is now headquartered in Singapore. A US$15 million investment from investors including DX Ventures, Global Founders Capital, and Conny & Co last year helped it expand into Thailand, Taiwan, Hong Kong, South Korea and Japan and it is already eyeing further expansion into Malaysia, Vietnam and the Philippines. 

“Our dream is to have a Flash Coffee every 500 metres in all major Asian cities.

“The coffee industry is not a ‘one winner takes all’ market, based on the already impressive size and the rate of growth forecasted in this segment, there is room for different brands to coexist successfully,” said Brunier. 

“All of the brands are trying to break through what’s out there, and we want to shake the tree a little bit, if you will. To change things up, we have a domination strategy here at Flash Coffee. In a nutshell, what it means is that we’re maximising the number of touch points with potential customers and existing customers and that in turn drives up our conversion rate.

“Our goal is to be a customer-first, tech-enabled coffee empire that fuels and empowers our consumers across Asia – and in the long term, perhaps even the world.”

Price point is key

Besides the bold decor and tech-driven ordering and serving systems, Flash Coffee has a sharp focus on its price point. Southeast Asia, in particular, is witnessing an explosion of coffee brands with a broad disparity of pricing. Chain by chain, a hot cafe latte can cost anywhere between US$1.50 and $5, depending on the brand, the venue and the coffee blend (with Robusta-based coffees typically less expensive than those using Arabica beans). Bruiner said Flash keeps its price point lower than most high-profile rivals, while ensuring the product quality is uncompromised. It keeps prices down by optimising its retail space, leading to lower rents and store investment. 

“The size of our outlets also allows us to … optimise staffing, which makes us more efficient than traditional coffee players,” he explained. “Improved staffing logic and more accurate inventory forecasts based on our back-end, tech-enabled operations also allow us to maximise savings and operational efficiencies.”

Those savings, he said, are passed on directly to customers. 

Flash Coffee’s menus are curated by recognised baristas and tailored for each market. All coffee drinks are made from 100 per cent Arabica coffee beans.  

“We’re always hyper-localising our offering based on market insights, and against local consumer preferences and tastes. Think about how McDonald’s creates its menus around the world. An example of ours would be our best-selling Flash Yuen Yeung in Hong Kong, our Milo Dinosaur Shake in Singapore and the Osmanthus Latte in Taiwan.”

Competition heats up 

Covid-19 has shaken up the coffee business, requiring brands to evolve to satisfy growing consumer demand – not just for coffee, but for convenience and often contactless collection or delivery. Given the rise in online shopping or food-delivery apps, consumers are more familiar with ‘tech-driven’ concepts. Bruiner said the market for convenient, affordable coffee has become a gold mine for new brands to take a share of. 

In Indonesia, Flash Coffee’s much larger local rival – grab-and-go coffee chain Kopi Kenangan – pioneered app ordering, allowing customers to buy a drink and then pick it up at an outlet or have it delivered. Founded in 2017, the chain has a network of more than 600 stores across 45 cities, aiming to open 100 stores per quarter this year. In April, Kopi Kenangan opened 26 outlets in a single week. 

For the grab-and-go model, the number of touchpoints plays a crucial role in the growth of the business. Compared to a network of more than 80 stores in Indonesia – currently its strongest market – Flash Coffee needs more time to achieve its ambition. 

But it already has the backing of Rocket Internet, the Berlin-based tech investor, whose businesses include Jumia, HelloFresh, and the Global Fashion Group, which is the parent of Zalora and The Iconic.  

Flash completed a Series B financing round raising US$32.8 million last month (June) and is currently finalising a second round, with details set to be released at the end of this month. 

While it may have lofty international ambitions, on its current growth and performance this cafe operator appears to be anything but a flash in the pan. 

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