Why aren't international coffee chains really selling coffee?

International coffee chains aren't selling coffee—they're buying customers. Low prices and coupons are customer acquisition costs, not profit drivers. They use low prices to acquire long-term consumers who will return repeatedly.

Why can't SME cafés afford to copy the low-price strategy?

SME cafés can't afford to copy the low-price strategy because they lack the systems, economies of scale, and procurement advantages of international chains. When an SME with 3 or 4 outlets offers coffee at RM6.90, they're simply making less profit—without the same ability to turn bargain hunters into regulars.

Why do food delivery platforms subsidize international coffee chains?

Food delivery platforms subsidize international coffee chains because they want access to the chain's customers. The chains have brand power and regulars who spend consistently. The platform pays to reach these customers. SMEs do not have this leverage—platforms will not subsidize their coffee.

How have the chains redefined consumer price perception?

International coffee chains have redefined what 'expensive' means. When they offer coffee at RM6.90 instead of RM9.90, consumers begin to see RM6.90 as the standard price. When they see a higher price elsewhere, they question it. The chains now own the pricing power in the market.

What question should every SME owner ask before lowering prices?

SME owners should ask: Why would customers pay more for my product? Is it better taste, better ambiance, or an experience that can't be replaced? If there is no clear answer, there is no reason to price higher than the standard. And if there is no sensible answer to what you gain from lowering your price, don't lower it.

What is the real lesson from the coffee chain price war?

The real lesson is not to copy the low-price strategy of big brands. Instead, ask what the big brand gains from offering low prices—and what you would gain if you did the same. If there is no sensible answer, do not lower your price. Compete on value, not price.

What Can a Cup of Coffee Teach F&B Owners?
It Might Save Your Business

What Can a Cup of Coffee Teach F&B Owners? It Might Save Your Business

Published: 24th September 2026

Video

In this video, we answer:

Why aren’t international coffee chains really selling coffee?
What is the hidden strategy behind low prices and coupons?
Why can’t SME cafés afford to copy the low-price strategy?
Why do food delivery platforms subsidize international coffee chains?
How have the chains redefined consumer price perception?
What question should every SME owner ask before lowering prices?
What is the real lesson from the coffee chain price war?

Key takeaways

The hidden strategy: International coffee chains aren’t selling coffee—they’re buying customers. Low prices and coupons are customer acquisition costs, not profit drivers.
The first trap: They can afford low prices because they have systems, economies of scale, and procurement advantages that SMEs don’t.
The second trap: Food delivery platforms subsidize international chains because they want access to their customers. SMEs get no subsidy—they subsidize from their own margin.
The real damage: Consumers now see RM6.90 as the standard price for coffee. The chains have redefined what “expensive” means.
The question for SMEs: Why would customers pay RM6 more for your product? Better taste? Better experience? Better ambiance?
The lesson: Don’t just ask “why can they sell so cheap?” Ask “what do they gain?” and “what would I gain if I lowered my price?” If there’s no sensible answer, don’t lower your price.

Full transcript

Voice Specification: Male, deep, confident, authoritative, American accent. Speak clearly with a direct, educational, and slightly challenging tone.

Audio Note: No music, no sound effects. Silent background throughout. Voice only.

[0:00 – 0:08] – Hook

Visual: Text on screen, simple and bold.

On-Screen Text: “International coffee chains aren’t selling coffee. They’re buying customers.”

Audio: “Have you noticed? When international coffee chains offer low prices, most people think they’re just selling coffee. But look deeper. They’re actually buying customers.”

[0:08 – 0:18] – The Price Trap

Visual: A price tag showing RM9.90 crossed out, replaced with RM6.90.

On-Screen Text: “RM9.90 → RM6.90 + Coupon. This changes everything.”

Audio: “Imagine a black coffee previously priced at RM9.90 is now RM6.90—plus a discount coupon for the next purchase. This strategy is devastating for SME café owners. Your regulars start asking: why are you so expensive?”

[0:18 – 0:28] – The Hidden Strategy

Visual: A customer choosing between two coffee shops.

On-Screen Text: “The chains don’t care about profit per cup. They care about acquiring customers.”

Audio: “The chains don’t care how little profit one cup makes. They’re thinking: how much can we spend to acquire a new customer? With the coupon, that customer returns tomorrow. Then next week. Gradually, they become regulars. The chains are using low prices to buy long-term loyalty.”

[0:28 – 0:38] – Why SMEs Can’t Copy

Visual: An SME owner trying to copy the strategy, then struggling.

On-Screen Text: “SMEs copying this strategy? Suicidal.”

Audio: “When SME owners try to copy this—lowering prices and offering coupons—that’s where the mistake happens. The chains can afford it. They have systems, economies of scale, and procurement advantages. An SME with 3 or 4 outlets offering coffee at RM6.90? You’re just making less profit.”

[0:38 – 0:48] – The Delivery Platform Subsidy

Visual: A food delivery platform logo with an arrow pointing to the coffee chain.

On-Screen Text: “Delivery platforms subsidize the chains. They want access to their customers.”

Audio: “Here’s another trick. Sometimes the chains sell coffee cheaper on delivery platforms than in-store. Why? The platform subsidizes them. The platform doesn’t want the coffee—it wants access to the chain’s customers. The chain has brand power and regulars. So the platform pays to reach them. Would the platform subsidize your coffee? Absolutely not.”

[0:48 – 0:58] – The New Standard

Visual: A customer looking at a delivery app, then at a menu.

On-Screen Text: “RM6.90 is the new standard. The chains set the price. Not you.”

Audio: “Now here’s the worst part. Consumers now see RM6.90 as the standard price for coffee. Not RM9.90. The chains have redefined what ‘expensive’ means. When customers walk past your café and see an RM18 combo, they check the delivery app. RM12 for the same thing? They ask: why pay RM6 more?”

[0:58 – 1:08] – The Question for SMEs

Visual: An SME owner thinking, then a question mark.

On-Screen Text: “The right question: Why would customers pay RM6 more for you?”

Audio: “So here’s the question every SME owner must ask: Why would customers pay RM6 more for my product? Is it better taste? Better ambiance? Better experience that can’t be replaced? If you don’t have a straight answer, why are you pricing higher than the standard?”

[1:08 – 1:18] – The Lesson

Visual: A confident owner reviewing a strategy.

On-Screen Text: “Don’t just ask ‘why can they sell so cheap?’ Ask ‘what do they gain?'”

Audio: “So when you see big brands offering low prices, don’t just ask ‘why can they sell so cheap?’ Ask ‘what do they gain from this?’ And if you lower your price—what do you gain? If there’s no sensible answer, don’t lower your price. That’s the lesson.”

[End Screen]

Visual: “Follow for more F&B insights” text with social media icons.

On-Screen Text: “Follow for more F&B insights.”

Audio: “If this was helpful, share it with your close friends or family who operate a Food and Beverage business, and follow us for more practical F&B business insights.”

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