Tim Hortons' Entry into Malaysia Highlights Coffee Market Growth

Kuala Lumpur — Tim Hortons, a Canadian coffee chain, opened its first two outlets in Malaysia this month. This move highlights a shift in local tastes, from tea to coffee. Malaysia, traditionally a tea-drinking nation, has seen a surge in coffee consumption and outlets in recent years.

Coffee consumption jumped 73% to 35,800 tonnes in 2021-22, then nearly 58% to 56,500 tonnes the following year, according to the International Coffee Organization (ICO). Despite a recent drop, the ICO expects demand to rebound.

Southeast Asia’s consumer coffee market is valued at around $3.4 billion, with Malaysia contributing $364 million. The region’s growth is driven by robust private consumption and increased urbanization.

Local player ZUS Coffee has expanded rapidly, from 180 stores in 2022 to 550 now, aiming for 700 by year-end. Tim Hortons plans to open at least 10 outlets in Kuala Lumpur and Selangor, with a goal of 100 in the country within a decade.

The shift reflects changing social habits, with coffee shops becoming popular social spots, especially among millennials and Gen Z. International brands like Tim Hortons and potential entry of China’s Luckin Coffee signal a competitive market, benefiting consumers with diverse options.