Taiwan-based 85°C Bakery Café’s successful entry in the US market

     

     85°C Bakery Café, referred to “Starbucks of Taiwan,” is very popular in Taiwan. They have already expanded to Australia and China, and subsequently entered the US market in 2008. So far it has stores in Irvine and Hacienda Heights, CA. It always has a huge lineup no matter what time of the day it is. There are several reasons to explain why 85°C Bakery Café can be so successful in California:

           

1.     The Right Choice of Location

85°C Bakery Café is Taiwan-based company. Therefore, the neighborhood with

Asian-dominant population would bring advantages for its market entry in the US. There are many Asian residents in California, especially in Irvine and Hacienda Heights.

2.     The increase popularity of Asian cousins in the US

My father said that it was not common to see many Asian restaurants in the US.

When my father and I visited Diamond Jamboree Shopping Center in Irvine, we noticed that there are many different kinds of Asian restaurants. This shows that customers are learning to eat sushi, Korean barbeque, and other Asian food. That’s why sea salt coffee can be accepted in the US. Another interesting phenomenon is that customers who came to 85°C Bakery Café are mostly Asian when the store just open. However, as time goes, the variety of ethnic groups among the customers becomes more diversified.

3.     Adaptation to American Tastes

85°C Bakery Café made an effort to localize their business in the US. For

example, the desert recipes are turned to taste sweeter than the ones in Taiwan. Also, cupcakes are required for American customers. In addition, they also develop a line of upscale sandwiches and salads for American customers. (Cold dishes are not popular in Taiwan.)

4.     Lower Price and Larger Range of Products

85°C Bakery Café offers larger range products and better price than Starbucks.

Starbucks had hiked prices on baked goods several times but made little improvement on the products. Thus, Starbucks has to watch out the threat of “Starbucks of Taiwan.”

            

      In conclusion, I think it is possible that 85°C Bakery Café has the potential power to prevail over the US market and shake the root of Starbucks.