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American Food Chains - The Stories of McDonald's, Shake Shack, In-N-Out, Egg Slut, and Blue Bottle in South Korea.

It all starts with a McDonald’s

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The first McDonald’s in Korea was opened in 1988. Throughout the opening day of the first McDonald’s, the restaurant’s 140 workers had to serve more than 3,000 customers.1 The Korean people's passion for Big Mac happened more than 30 years ago, and now you can find more than 400 McDonald’s in this country.

It’s not just McDonald’s though. There are now hundreds of other fast-food chains all over the country, such as Burger King, Lotteria, and No Brand Burger. For Koreans today, there should be nothing exciting left for ordering American-style burgers & fries.

However, the brands like Shake Shack, Eggslut, and In-N-Out Burger have somehow managed to create the same level of hype that worked for McDonald’s in 1988.

Why? Let’s first check what happened when these restaurants opened their first spot in Korea.

Shake Shack

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On July 22nd, 2016, Shake Shack opened its doors in Gangnam district of Seoul. The city’s excitement was through the roof; there were even people waiting the night before(just like how people used to sleep in front of an Apple Store).2

The line did not become any shorter for months; 4,000~5,000 customers had to wait at least an hour to experience the shack. As a result, in the opening year, Shake Shack Gangnam reported daily selling of 3,000~3,500 burgers, becoming the largest revenue-generator among 120 Shake Shack branches around the world.

Eggslut

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Four years later, another sandwich chain from America named Eggslut arrived at COEX mall located in Gangnam district of Seoul.3 On the first day, when the doors were not even open, there were already about three hundred people waiting outside.

In 2021, the hype continued at Eggslut’s second branch in the brand new department store called the Hyundai Seoul. Hundreds of people flocked to the place for the famous egg sandwich. And of course, everyone had to wait at least 1-2 hours.

During the first week, Eggslut’s second location sold more than 2,000 Fairfax Sandwiches every day. Of course, the egg sandwich place has instantly become the most successful restaurant in the mall.

In-N-Out

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In-N-Out Burger does not even have a branch in Korea, but the chain occasionally opens up a pop-up store in Seoul.4 For example, in 2019, the restaurant opened a 3-hour pop-up store in Gangnam district.

This time, the line began to form around 5:30 AM and there were already more than three hundred people waiting around 11 AM. In-N-Out had prepared around 250 burgers for the day, so the pop-up could not even last 3 hours.

Let’s pause for a moment to underline the patterns.

We’ve observed that McDonald’s, Shake Shack, and Eggslut all opened their first locations in Gangnam district, made hundreds of people wait in line, and created the initial hype to fuel the rapid growth.5

Do these patterns only apply to those fast-food chains that serve burgers and fries?

Enters Blue Bottle

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Cafes are literally everywhere in this country. According to a data from 2020, there are 83,692 coffee shops in Korea, and 18,535 of them are located in Seoul.6 Because of this extremely competitive environment, about 50% of new cafes close their business within three years.

No doubt, there are a lot of great coffee shops that brew excellent coffee for a reasonable price.7 However, none of the Korean-born cafes can expect to create a line as long as that of the first Blue Bottle Coffee.

In May 2019, a long line began to form around 5 AM outside the first Blue Bottle Coffee in Seoul. Some people had brought blankets and pillows so they could be one of the first to enter the store. When the shop opened its doors at 8 AM, there were more than 200 people in line and the number grew to over 400 within an hour.

Reportedly, the customers spent more than ₩60,000,000(~$53,000) on the opening day alone, and this was the new sales record for the global brand that had 70 other branches in the U.S. and Japan.

Now, Blue Bottle has 7 different branches in Seoul, including the newest one near the second branch of Eggslut.

Tartine Bakery

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Jan 2018. The opening day of Tartine Bakery Seoul

As of today, Tartine has 7 locations in the U.S.: four in Bay Area and three in LA. The bakery does not even have a branch in U.S. cities like Portland, Seattle, and New York.

Anyways, instead of expanding nationally, Tartine chose Korea to be the next ground for its business. In other words, young Korean chaebols were able to convince the bakery to open up spots in their country.

When the bakery opened its doors in Hannam-dong, every single piece of bread in the store was sold out within hours.8 And now, Tartine has 6 different locations in Seoul.

Randy’s Donuts

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In August 2019, the first Randy’s Donuts Korea was open in Jeju. Now the donut chain has three different locations in Seoul, Daegu, and Jeju. And of course, you always have to wait in line for at least 20-30 minutes to taste some of the American-style donuts.

Tiger Sugar

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Tiger Sugar, a Taiwanese bubble tea chain famous for its brown sugar boba, entered Korea in 2019. And Tiger Sugar did not have to wait for success; for the entire summer in 2019, people waited at least 30 minutes to take a picture with the drink’s “tiger stripes.”

The story of Tiger Sugar demonstrates that non-American food chains can also create a similar type of hype as Shake Shack or Blue Bottle. In 2021, Tiger Sugar runs more than 40 different locations all over Korea.

Update: It's been a year since I wrote this. Most of the Tiger Sugar stores have been closed in Korea. Maybe it is extremely difficult for a non-US brand to sustain the hype.

Finally.. Why?

Maybe showing off on Instagram gets all the credit for the success of these American(sometimes Taiwanese) “fine casual” chains in Korea. However, there must be many more factors that contribute to the psychology of people who are willing to sacrifice hours for a simple bite.

So, here’s my take:

  • In 2018, more than 2 million people from Korea visited the U.S., and this number is almost twice as big as the data from 2010.9 What did these tourists do when they visited cities like LA and New York? I bet a lot of them went to Insta-famous spots like Eggslut and Shake Shack. And when these “former tourists” realized that these American chains were now available in Korea, they immediately brought up the "touristified" memories of these restaurants. And to relive the excitement he/she had as a tourist, waiting for hours could feel like a small investment.

  • Korean society is pretty boring. The economy is controlled by a handful of chaebols like Samsung, Hyundai, and SK. The dream jobs for most youngsters are “stable” ones such as government workers, public school teachers, and whatever that is related to Samsung. In this homogeneous society, lots of people aspire to differentiate themselves from others. And becoming the first one to experience the hype could be one of the most accessible ways to do that.

  • In Korea, the offline retail market is controlled by chaebol companies like Shinsegae, Lotte, and Hyundai. These conglomerates own fancy department stores, shopping malls, and hotels. However, we all know that a big portion of the offline business is going online. Then how do these luxurious shopping areas and hotels win the battle against each other? Seems like the answer is hosting Eggslut and Blue Bottle just like what Hyundai Seoul did this year. Not only Hyundai Seoul, but also places like Ryse Hotel, Central City, and Times Square Mall have embraced “fine casual” restaurants like Shake Shack and Tartine.

  • Korean media is notorious for glamorizing American culture: whenever there’s a new plan to support startups, articles use the expressions like “Korean Silicon Valley” or “Korean Steve Jobs.” Renowned investors like John Lee and Kang Bang-cheon are called “Warren Buffett of Korea.” Harvard-polished books like Justice and Methods of Logic have stayed the best sellers for years. Parasite winning the Oscars is considered as an achievement that deserves national celebration.10 So yeah, when a restaurant group becomes successful in the U.S., Korean media and PR companies start to pump out phrases like “Apple of coffee industry,” “New York specialty,” and “the bread you must try before you die.” And these messages eventually spread a major FOMO alert.

Or these restaurants, cafes, and bakeries are actually worth waiting for.

  1. McDonald’s chose Apgujeong-dong of Gangnam district as the first location.

  2. Waiting outside for hours during summer in Seoul is no joke. The temperatures range from 85°F to 95°F.

  3. COEX is the largest underground shopping mall in Seoul. The place has an awful library that uses books as decorations. Both Shake Shack and Eggslut were brought to Korea by SPC Group, which is one of the most prominent food conglomerates/chaebols in Korea.

  4. Most likely, In-N-Out opens these pop-up stores to protect its trademark rights in Korea.

  5. Even amid the pandemic, McDonald’s in Korea reported a 9% growth in revenue this year.

  6. Also, on average, a Korean adult drinks 1.8 cups of coffee every day.

  7. In Seongsu-dong, I recommend visiting Lowkey Coffee and Momento Brewers.

  8. Hannam-dong is known as one of the wealthiest neighborhoods in Seoul.

  9. Apparently, the number fell dramatically after the pandemic.

  10. I’m not saying Parasite did not deserve the awards. I’m just saying great movies like Parasite should be celebrated regardless of the Academy’s acceptance.

#Eng

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