Canadian coffee chain completes a new fundraising round with Sequoia Capital China, Tencent Holdings and Eastern Bell Capital, and aims to open 200 new stores in China
Tim Hortons operates around 100 stores in China, and plans to open a further 200 after completing new fundraising round | Photo credit: Tim Hortons
Tim Hortons has announced it will open more than 200 new stores in China and focus on developing digital infrastructure in the country. The Canadian coffee chain did not disclose the amount of funds raised from investors Sequoia Capital China, Tencent Holdings and Eastern Bell Capital, but suggested it would enter the retail coffee market, which could involve opening a store on Alibaba Group’s Tmall online marketplace.
Tim Hortons entered the Chinese coffee shop market more than two years ago and today operates around 100 stores across the country. The Canadian coffee chain lags behind international rivals, such as Chinese market leader, Starbucks, which operates more than 2,400 stores, McCafé ’s 900+ sites and Coca-Cola-owned Costa Coffee’s nearly 500-store Chinese portfolio.
Tim Horton’s describes its Chinese stores as ‘profitable’, but remains some way off a 10-year goal to open 1,500 stores announced in 2018
. That year, the coffee chain entered into an exclusive master franchise joint venture agreement with private equity firm, Cartesian Capital Group.
World Coffee Portal estimates the total Chinese branded coffee shop market exceeds 21,400 outlets, with annual outlet growth of 2.9% over the last 12 months. The vast East Asian market holds plenty of untapped growth potential for international brands seeking international outlet expansion as Chinese consumers rapidly adopt aspirational coffee shop culture. China's economy is also recovering more rapidly from Covid-19 than many western countries, making it an attractive investment opportunity for international hospitality businesses.
2021 has seen Tim Hortons ramp up its international expansion efforts. In January, the coffee chain, which is controlled by franchise group, Restaurant Brands International, announced it would open a new Middle East headquarters
in Riyadh, Saudi Arabia, and is reportedly seeking to open more stores across Qatar, the UAE, Bahrain, and Oman, in addition to India and Egypt.
Tim Hortons currently operates around more than 4,900 stores globally, of which around more than 4,000 are located in its native Canadian market.