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BTS star Kim Taehyung's influence made headlines again as Compose Coffee recorded a double-digit profit of $26.8 million or KRW 36.7 billion. Alongside coffee sales, last year's operational profit of KRW 800 million ($584,477 approx.) increased by 17%, and sales of KRW 17.5 billion ($12,786) increased by 67%.
On April 11, 2024, a market research firm, Euromonitor, stated in its survey that the value of the domestic coffee shop market in 2023 increased by 11.4% to KRW 8.5661 trillion (over $6.25 billion) from 2018 in South Korea. The same organization's calculation of the growth rate for the domestic café business in 2023 was surpassed by an 8.9% growth rate.
According to research published by the commercial district analysis service of the Seoul Metropolitan Government, the coffee and beverage store market in Seoul is booming. As of the end of the first quarter of 2024, there were 23,235 coffee and beverage stores in Seoul, up 1,886 (8.8%) from the same time in 2023.
Additionally, the figure represented a significant rise of 5,598 (31.7%) when juxtaposed with 17,637 after the first quarter of 2019, prior to the COVID-19 pandemic.
Compose Coffee's soaring success and sales are attributable to BTS star Taehyung's global influence
The Financial Supervisory Service's electronic disclosure system audit papers made public on April 6, 2024, stated that Compose Coffee recorded a 20% increase in sales to KRW 88.9 billion (over $64.95 million) and a 47% increase in operating profit to KRW 36.7 billion ($26.8 million). Among inexpensive coffee brands in South Korea, the operational profit ratio was the greatest at 41%.
According to the research, significant low-cost coffee chains such as Compose Coffee, Mega MGC, Ediya Coffe, etc., quadrupled their profits in 2023. This further attests to the fact that the number of franchisees for takeout-focused businesses is rapidly rising in South Korea, and there is a growing desire for cost-effectiveness in obtaining inexpensive coffee at a higher sales margin.
On the digital front, Taehyung's affiliation with Compose Coffee had an even greater effect. Following the BTS idol's endorsement, the coffee franchise's app spiked in downloads, adding almost 2.6 million new users and surpassing over 12 million subscribers. This change resulted in a noticeable increase in the brand's user base and global awareness.
Furthermore, the brand has enjoyed a massive surge in sales, starting with a 72% increase in demand for its Yuja Tea, aka Citron Tea. Taehyung mentioned the beverage as his favorite during the brand's behind-the-scenes YouTube clip, and since then, the item on the menu has seen a consistently high demand.
Notably, another inexpensive coffee company, Anhouse—the company that runs Mega MGC Coffee—saw a 111% increase in sales in 2023, reaching KRW 368.4 billion ($269 million). Additionally, the operational profit increased by 124% to KRW 69.4 billion ($50.7 million). It was endorsed by the South Korean football star Son Heung-min and girl group ITZY.
However, Compose Coffee has achieved a massive profit return in four months after appointing Taehyung as its face in December 2023. On April 4, 2024, Compose Coffee—the company spearheading the low-cost coffee craze in Korea—opened its first store in 2014 at Kyungsung University in Busan.
Ten years after its debut, it has over 2,500 franchise locations nationwide, rivaling major Korean coffee companies like Mega Coffee and Ediya Coffee. Though the brand started in Busan in 2014, it quickly grew to 2,400 outlets around South Korea. With Taehyung spearheading its marketing, Compose Coffee aims to take over global markets.
BTS Taehyung's remuneration, a halt on the star's coffee cup holder production, and more
In March 2024, reports surfaced online that HYBE allegedly halted the production of the coffee cup holders with the face of BTS' Taehyung printed on them. An X user (@snowflower1052) shared that one of the Compose Coffee franchise owners stated that they were unable to get the shipment due to HYBE's "restrictions." However, the company stayed quiet despite facing allegations.
Taehyung, aka V, reportedly earned an estimated KRW 6 billion (roughly $4.61 million) in modeling fees from Compose Coffee as part of his endorsement deal. When Compose Coffee appointed him as their global ambassador, his endorsement fee was paid out of the pockets of the franchise owners.
Out of the KRW 6 billion (about $4.62 million) sponsorship fee, each franchise owner reportedly contributed KRW 2.00 billion (roughly $1.54 million). This comes to KRW 72,000 (about $55.40) a month for twelve months.
Franchise owners previously had reservations about the high costs, even if the corporation was paying for two-thirds of them. However, all worries melted away when the brand started seeing a spike in sales after Taehyung's endorsement.
In other news, on March 31, 2024, Taehyung made an unexpected appearance at the 2024 Hana Bank K League 1 soccer match, Round 4. The K-pop star was seen in his military uniform with five other colleagues from his military regiment.
