What Cafe Amazon's China Exit Says About Worldwide Coffee Competition

Cafe Amazon, the Thai chain founded in 2002 by PTT Oil and Retail Business, announced on its WeChat account that it will temporarily leave the Chinese market on January 27. The brand operates more than 4,500 stores across 11 Asian markets and ranks sixth among coffee chains by store count, yet stepped back after more than three years in Guangxi.

The retreat follows intensifying price wars, cross-industry competition, and a value-focused domestic market. The parent company is now shifting attention toward other Southeast Asian markets such as Laos, where its gas-station model already has a foothold. Whether it returns to China depends on the adjustments it makes while away.

Cafe Amazon, once dubbed the Thai "Starbucks," recently announced via its official WeChat account that it will temporarily leave the Chinese market on January 27, prompting many coffee lovers to express their regret. The brand, founded in 2002 by PTT Oil and Retail Business Public Company Limited, has over 4,500 stores worldwide, yet chose to scale back after more than three years in Guangxi, China. Behind this are the increasingly fierce price wars, cross-industry competition, and the high-cost-performance trend in the domestic coffee market. This article reviews Amazon's journey in China, the market response, and its parent company's strategic shift toward other Southeast Asian markets, while exploring the new challenges that the changing coffee landscape poses for brands.

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Today, the overall situation in the coffee industry is no longer the flourishing scene of a hundred flowers blooming as it once was. Leading brands are constantly trying to outpace one another, and cross-industry collaborations are emerging endlessly, making the competition in this track increasingly white-hot, and an all-out price war among major coffee chains has long since begun.

Recently, a discussion titled "Thai classmate got pushed out and went home" has been circulating on social media. The matter stems from Thai coffee chain Cafe Amazon publishing a farewell letter on its official WeChat account, announcing that it "will temporarily leave the Chinese market on January 27," and revealing that it will set off again after completing the corresponding adjustments.

Cafe Amazon was founded in 2002 by PTT Oil and Retail Business Public Company Limited (abbreviated as "OR"). According to the official account, at the time, senior executives hoped to enhance the appeal of gas stations and increase revenue, so they came up with the idea of creating a coffee brand. After years of expansion, Cafe Amazon has opened more than 4,500 stores across 11 markets in Asia under a franchise model, and in many countries it has even been dubbed the Thai "Starbucks." If calculated by total number of stores, it currently ranks as the world's sixth-largest coffee chain brand.

In 2019, Sinopec Guangxi Petroleum Branch joined hands with Thailand's PTT to open China's first "Cafe Amazon" store at the Zhuxi gas station in Nanning, Guangxi. However, because the brand's stores are mainly concentrated in the Guangxi region, after more than three years, many coffee lovers still know very little about it.

Some netizens said bluntly that it is hard to accept that this coffee shop, which combines Starbucks quality with Luckin cost-effectiveness, would "close at lightning speed" just like that, and that they will never again encounter Cafe Amazon at highway service areas.

At the same time, some netizens in the know revealed that signs of the brand's withdrawal from the market had been observed successively in recent months. On the other hand, many netizens attributed Cafe Amazon's departure to the impact of the current 9.9-yuan low-price wave in the coffee market, arguing that even with discounts, its prices offered no "advantage."

In fact, in recent years, both the landscape of the coffee industry and consumer habits have undergone dramatic changes. Intensifying competition in the track has spawned a large number of cross-industry players, and categories such as tea-coffee and fruit-coffee have become increasingly common. In order to attract more customers, many affordable chain brands have also begun to penetrate the field of "specialty coffee." For example, Luckin Coffee, which launched the "Global Bean Hunt Program," is a typical case, and it has also set pour-over coffee at a relatively low price range.

In addition, according to Cafe Amazon's parent company OR, competition in the Chinese market is too fierce to gain an advantage, so it decided to turn its sights to other markets. In 2023, OR announced that it would invest 900 million US dollars and devote substantial resources to developing the markets of Cambodia, Laos, and Vietnam. At present, Cafe Amazon has opened about 230 stores in Cambodia.

Overall, the battle in China's coffee track is currently more focused on high cost-effectiveness, price wars, and lower-tier markets. Cafe Amazon's withdrawal from the Chinese market also reflects the cruelty of market competition. In the face of a fierce competitive landscape and consumers' increasingly diverse demands, coffee brands can only secure a firm footing in this contest by continuously innovating and improving quality.

Image source: Internet

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The above content is compiled by CoffeeHunters, a coffee news website.