1. Startups

Flash Coffee Aims for 18 Times Growth with 75 Stores Expansion in Indonesia

Strategic plan after posting $15 million series A funding

Startups coffee chain technology based Flash Coffee announced the acquisition of series A funding of $15 million or IDR218 billion. White Star Capital led this funding, followed by a number of other investors, namely DX Venture, Global Founders Capital, and Conny & Co. This new funding increases the total capital received by Flash Coffee to $20 million or Rp290 billion.

The Rocket Internet portfolio company will expand to 10 countries in Asia Pacific by targeting 300 new outlets or three new outlets every week. Currently, Flash Coffee has 50 outlets spread across Indonesia, Singapore, and Thailand.

"Our target is to add 300 o in Asia Pacific, where to 75 o expected from Indonesia by the end of 2021. We are also aiming for 18-fold growth in Indonesia this year," said Flash Coffee Founder & CEO David Brunier in an interview with DailySocial. 

Brunier revealed that the company has already pocketed profits from the 50 outlets it currently owns despite the pandemic situation. We are optimistic that we will be able to maintain profitability in line with the massive expansion carried out for 2021 and 2022.

Flash Coffee was first present in Indonesia in early 2020 with 4 outlets at that time. As of April 2021, his party has operated 14 outlets spread across the Greater Jakarta area. This year, the number of outlets is expected to increase to 75 outlets and the company will also look at expansion opportunities in other areas, such as Bandung, Yogyakarta, Surabaya, and Medan.

Momentum for expansion

Brunier considers that the retail coffee outlet market in Indonesia is very attractive and has great room for growth. In addition to the high population, the upper middle class segment is thirsty to try new products and coffee consumption per capita continues to increase.

However, the share of Flash Coffee in Indonesia is said to be slightly lower than in Singapore and Thailand. This is because Indonesian consumers tend to prefer to enjoy coffee while hanging out at outlets, especially in malls.

Therefore, according to him, the Covid-19 pandemic has made coffee sales with a model grab-and-go become more relevant to customers across the region. This situation also opens the opportunity for Flash Coffee to significantly improve the customer experience by serving high quality and affordable coffee. One of them has been answered through the launch of the Flash Coffee application last year which is equipped with an order-taking feature.

The current situation also allows the company to increase efficiency by optimizing property land so as to significantly reduce rental costs. In addition, the concept grab-and-go can also increase food and beverage production without the need for many baristas. With these savings, companies can pay their baristas a decent salary and affordable prices to customers.

"We are optimistic that we will continue to expand our physical stores in the midst of challenging economic conditions. In this situation, we can actually rent premium properties at lower prices. Currently, store visitor traffic is increasing from last year. We hope that traffic will return to its original form in 2022. We will also look at other options to increase the company's growth apart from physical store expansion," said Brunier.

Technology and team expansion

Flash Coffee uses a 4E strategy for business growth, including Ekpand (stores and locations), Enlarge (team), Enhance (technology), and Engage (customer interaction). In terms of technology, there are several things that will be strengthened by Flash Coffee. First, (1) innovation through consumer applications that can be downloaded on iOS and Android platforms as well as barista applications to improve operational efficiency and provide performance-based incentives.

Furthermore, (2) data-driven decision making to match products and markets, (3) application of technology to identify areas of high demand, consumer flows, and in-store traffic conversion, and (4) digitization of equipment to assist centralized online configuration and ensure consistency across stores.

Furthermore, Flash Coffee is also doing massive hiring with this massive expansion. In total, the company is recruiting 2.000 people in Asia Pacific in the next year. This includes adding people to positions on the technology team for the region.

"To become the best technology-based coffee shop in Asia, we are investing heavily in order to put the best human resources in the right position. We will expand our team to 50 people at Flash Coffee's regional technology hub based in Jakarta," he added.

Startups coffee chain in Indonesia

More Coverage:

One of the keys to coffee chain growth is the availability of outlets to reach the market. Flash Coffee's massive expansion will add to the competition new retail in the industry coffee chain technology based in Indonesia.

Startup candidate unicorn Memories Coffee now employs 3.000 employees spread across 324 outlets in Indonesia. The company aims to add more outlets to 500 outlets this year. After receiving series B funding (more than IDR 1,6 trillion) in 2020, Kopi Kenangan will also strengthen its position by offering food and beverage products from local traders and developing cloud kitchen.

Then, ForeCoffee which also pocketed an investment of IDR 147 billion in the second quarter of 2020, is also still boosting outlet expansion to Bandung, Surabaya and Medan. Currently Fore Coffee has about 100 units of outlets as of April last year. Temporary, Soul Promise said that it has 800 coffee outlets thanks to a partnership program throughout Indonesia.

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