[비즈한국] As competition in the domestic coffee market intensifies, Ediya Coffee is turning its eyes to overseas markets. Although Moon Seung-hwan, the head of the Management Strategy Division and second-generation owner, is investing significant effort into leading overseas operations, the pace of progress remains slow.
Uncertainty over Guam 2nd branch opening within the year, only 1 store opened in Malaysia despite goal of 3
In December of last year, Ediya Coffee opened its first overseas franchise store at the Micronesia Mall in Guam. At the time, Ediya stated that it would expand its overseas stores starting with the first Guam location and announced plans to open a second Guam branch in 2024. However, with the year coming to an end, there has been no news of its opening.
The second Guam branch, which Ediya Coffee is planning, is set to open in the Barrigada area. The Barrigada area is a location that Chairman Moon Chang-ki had his eye on since the company first planned its entry into Guam. In 2022, Chairman Moon announced the plan to open a store in the Barrigada area of Guam, stating, "We have been analyzing the market for about three years."
As the opening schedule for the second Guam branch, which was supposed to open within the year, has not been finalized, some expect it will be difficult to open this year. An Ediya Coffee official stated, "There is no issue with the second Guam branch. Currently, construction is finished and we are in a ready state, waiting for permit approval," adding, "Because the U.S. documentation process is rigorous, permit approval takes a long time. It is difficult to confirm a schedule because we don't know when approval will be granted."
Ediya Coffee also announced plans to enter the Malaysian market this year. In June, the company signed a master franchise agreement with a local partner in Malaysia and set a goal to open three stores in Malaysia within the year and expand to more than 200 stores within five years.
However, contrary to these ambitions, the Malaysian business is also showing sluggish movement. The number of confirmed Ediya Coffee store openings in Malaysia for this year is only one. An Ediya Coffee official explained, "The first store in Malaysia is in the final stages of preparation and is expected to open in mid-December. We haven't finalized the schedule for the second and third stores, but we are preparing for them sequentially."
As Ediya Coffee's overseas business fails to gain momentum, doubts are growing regarding the management capabilities of second-generation leader Moon Seung-hwan. Moon, the eldest son of founder Chairman Moon Chang-ki, was appointed as an executive director in April of this year and has begun to participate in company management in earnest. Since the end of last year, Moon has served as the head of the Management Strategy Division, overseeing Ediya Coffee's overseas operations and rebranding efforts. Born in 1993, Moon is known to have joined Ediya Coffee, worked for two years, then gained experience at consulting firms such as BCG, A.T. Kearney, and Deloitte before recently returning to the company.
An Ediya Coffee official noted, "It is true that the overseas business team is under the Management Strategy Division led by Moon Seung-hwan, but the entire company is moving together to conduct the business. It is cautious to focus (the performance) on a single individual."
Second-generation leader Moon Seung-hwan oversees overseas business and rebranding… What are the results?
Ediya Coffee has recently been facing growing concerns. There are ongoing criticisms that its position between low-cost coffee and premium coffee is ambiguous, and its performance has been sluggish. Ediya Coffee's revenue last year was 275.5 billion won, a 0.8% decrease from the previous year (277.8 billion won). Operating profit was recorded at 8.2 billion won, down 18% from the previous year (10 billion won).
The number of franchise stores is also appearing to decline. While Ediya Coffee publicly reported 3,005 stores, this figure is from the end of 2022. It has not disclosed changes in the number of stores for the past two years. An Ediya Coffee official said, "It is not that the number of stores is showing an increasing trend. Once a franchise reaches 3,000 stores, it can be seen as saturated. Since surpassing 3,000 stores, we are focusing more on maintaining store sales than on increasing the number of locations."
Ediya Coffee has recently embarked on a rebranding process. To change its CI (Corporate Identity) this summer, it filed for the 'ODO' trademark with the Korean Intellectual Property Office and is also preparing for a brand renewal. Last month, it selected actor Byeon Woo-seok as an advertising model and jumped into star marketing. This is the first time since the company's inception that Ediya Coffee has hired a celebrity model.
Since the rebranding is also known to be led by Moon Seung-hwan, the results of this rebranding are expected to have a major impact on the evaluation of his management skills. For now, the effect of the star marketing is still minimal. Complaints are being heard among franchise owners that there is no boost in sales. One franchisee pointed out, "Sales are still sluggish. Although we hired a brand model for the first time, it's a bit disappointing because he is an actor who is active as a model for over a dozen other brands, so it doesn't feel unique."
An Ediya Coffee official explained, "Although it is not leading to a noticeable increase in sales, the reaction from young customers online is enthusiastic," adding, "Ediya Coffee is constantly thinking about coexistence with our franchisees. As we take pride in our coffee beans, we believe that refreshing the atmosphere through store renovations and similar efforts can have a positive effect. We plan to focus on overseas business and rebranding efforts next year as well."