Cafe Amazon preparing Coffee Shop concept to challenge Starbucks

Thai oil company PTT plans to spin off its Cafe Amazon division and build a coffee chain it says will one day rival Starbucks. The company says it will open 20,000 cafes globally, nearly 10 times the current network of 2300 outlets in Thailand, the Philippines, Laos, Cambodia, Myanmar and Japan.

PTT will invest US$1.3 billion in the Cafe Amazon brand over the next five years to develop the franchise business.

“We aim to build the Cafe Amazon into a top 10 global brand over the next five years,” said PTT Oil and Retail CEO Jiraporn Khaosawas.

The move signals PTT’s turn towards the retail business at a time when it stands poised to be floated next year, initially into China and the Middle East via franchise partnerships.

PTT announced plans earlier this year to sell off half of its retail holdings, which generate 20 per cent of the group’s profits, including takings of THB10 billion (US$303 million) from Cafe Amazon last year. The firm has declined to reveal how much it expects to raise in the floatation, although experts have valued the firm’s retail unit at roughly THB120 billion ($3.6 billion).

PTT’s executive VP for the retail oil business Suchat Ramarch said: “We will not only expand Cafe Amazon, but we will also expand our petrol stations and our lube oil retail business. However, Cafe Amazon will be the highlight, with strong potential to grow.”

Informed estimates suggest it would cost about THB2.3 million ($70,000) to open a Cafe Amazon shop in a PTT gas station, and from $100,000 to $300,000 for a stand-alone outlet.