A Twosome Place gains ground as Starbucks struggles with 'Tank Day' controversy

SEOUL, August 4 (AJP) - South Korea's oversaturated coffee market is showing signs of a potential seismic shift, as Starbucks, the long-dominant market leader, has taken a hit to sales and reputation following its so-called "Tank Day" controversy, while rivals such as A Twosome Place have gained ground in recent months.

A Twosome Place recorded an estimated 117.05 billion won in card payment transactions in July, according to Mobile Index, a data platform operated by IGAWorks, while Starbucks Korea posted 110.06 billion won during the same period, a gap of about 7 billion won.

The figures are based on estimates rather than audited sales, but they offer a snapshot of changing consumer spending patterns across South Korea's major coffee chains.

A Twosome Place first overtook Starbucks Korea in monthly card payments in May, marking the first such reversal in the three years of available data, and has remained ahead every month since.

From May to July, A Twosome Place saw cumulative estimated card payment transactions of 361.38 billion won, compared with 331.64 billion won for Starbucks Korea, a gap of roughly 30 billion won.

The shift followed intense backlash over a May 18 promotion for Starbucks Korea's "Tank" tumbler line. The date marks the anniversary of the 1980 Gwangju pro-democracy uprising, when South Korea's military government violently suppressed demonstrations. Critics said the campaign's language and timing were insensitive to victims of state violence and to the family of Park Jong-chul, a student activist whose 1987 torture death helped galvanize the country's democracy movement.
  Starbucks Korea halted the promotion and issued an apology. Shinsegae Group Chairman Chung Yong-jin, whose E-Mart affiliate operates Starbucks Korea, dismissed SCK Company CEO Son Jung-hyun and ordered disciplinary measures against the executive who oversaw the campaign, as well as other staff involved. Chung later issued a public apology over the controversy.

The gap narrowed in July. Starbucks Korea's estimated payments rose 9.6 percent from June, while A Twosome Place's fell 3 percent, suggesting the shift in consumer spending may not be settled.

The data also suggest that the controversy may have accelerated a trend that was already building before May, as A Twosome Place and low-cost chains gained ground.
  A Twosome Place has topped 100 billion won in monthly estimated payments for 15 consecutive months as of July. Mega MGC Coffee, one of South Korea's fast-growing low-cost chains, reached 98.21 billion won in July, closing in on the 100 billion won mark, up 1.6 percent from June. Paik's Coffee recorded 24.5 billion won, roughly flat from the previous month.

The numbers point to a more crowded coffee market, where Starbucks Korea is no longer competing only with premium rivals like A Twosome Place, but also with lower-priced chains that have expanded rapidly through smaller-format stores and cheaper drinks.

For Starbucks, the question is whether July's rebound will continue. For its rivals, the past three months have offered a rare opening in a market long defined by Starbucks' brand power.

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