Canadian coffee chain Tim Hortons enters tightly-packed Chinese market

Canadian coffee chain Tim Hortons opened its first store in Shanghai on Tuesday, entering a crowded market with competition from rivals Starbucks, Costa and Chinese startup Luckin Coffee.

With more than 4,800 stores in North America, the Philippines and the Middle East, Tim Hortons has big plans for China, aiming to establish some 1,500 stores in the country in the next decade. The company is partnering with global investment firm Cartesian, which has successfully established Western food brands in China, including Burger King.

However, the brand, which is also renowned for its donuts, faces a tough challenge in a lucrative but competitive market. Starbucks is opening a store in China roughly every 15 hours according to Bloomberg, while British rival Costa plans to have 1,200 stores in the country by 2022.

Tim Hortons, which first started serving coffee in Ontario in 1964, will aim to open between 10 and 20 stores in Shanghai this year, before expanding to other cities across China.

The chain’s president, Alex Macedo, told Bloomberg that Tim Hortons would look to set itself apart from other brands by offering a wider food menu than its competitors.

Opening day appeared to go well in Shanghai, with Twitter user Christopher Yuen saying he spent six hours at the store, including three hours to get in.

While that menu will look to cater to local tastes, Tim Hortons is also looking to sell its Canadian identity to Chinese consumers, with maple leaf and ice hockey decorations inside stores.

While Starbucks has been a phenomenal success in China, other overseas food brands have failed to make their mark, such as British on-the-go chain Pret A Manger and U.S. fast food restaurant Taco Bell.

And if Tim Hortons wants to find success in China with its range of donuts, Dunkin’ Donuts offers mixed messages. The U.S. brand has made two failed attempts at entering the Chinese market, but currently has 39 stores in China, with plans to open 1,400 in the next few years.