Starbucks made history in Korea last year as the first coffee chain to surpass 3 trillion won ($2.06 billion) in annual sales.

This milestone, which leaves its coffee competitors in the dust, highlights the dramatic ascent of the US coffee chain in Korea -- from its first store in 1999 to becoming the brand’s third-largest market worldwide.

September 1997: Starbucks Korea began as a 50-50 joint venture between E-Mart and Starbucks International.

July 2021: Starbucks International sold its entire stake in the Korean venture. At the time, the business was valued at around $2.3 billion.

E-Mart increased its ownership to 67.5 percent by acquiring an additional 17.5 percent stake for around $410 million. Meanwhile, Singapore’s sovereign wealth fund, Government of Singapore Investment Corporation, purchased the remaining 32.5 percent for more than $700 million.

December 2021: Starbucks Korea changed its name to SCK Company.

As of January, Starbucks Korea is the brand’s third-largest market worldwide, operating 2,009 outlets -- more stores per capita than the US (17,049) and China (7,685).

Starbucks Korea’s first store, near Ewha Womans University in Seoul in 1999, generated annual sales of 600 million won.

Fast forward to 2024, Starbucks became the first coffee chain in Korea to surpass the 3 trillion won mark, reporting 3.1 trillion won in sales and operating profits of 190.8 billion won -- a 36.5 percent increase from the previous year.

While the company posted annual revenue of 2.92 trillion won in 2023, its closest competitor, A Twosome Place, lagged far behind with 480 billion won in sales. Mega Coffee ranked third at 368.4 billion won. Ediya Coffee followed with 275.6 billion won, and Paul Bassett rounded out the top five with 191.7 billion won.

Despite its dominance, Starbucks Korea faces mounting challenges from both internal and external factors.

Global pressures including rising coffee bean costs and the depreciation of the won, combined with increasing labor and rental expenses, have squeezed operating profits, prompting multiple price hikes, the latest one in January.

The company’s profit margin has fluctuated in recent years, dropping from 10.1 percent in 2021 to 4.8 percent in 2023 before recovering to 6.1 percent last year.

Adding to these pressures, budget-friendly competitor Mega Coffee has expanded to 3,038 locations as of June last year, claiming the highest store count, followed by Ediya Coffee with 3,019. Meanwhile, global coffee brands like Blue Bottle Coffee and Tim Hortons are also making their mark in the Korean coffee scene.

With over 13 million members on its mobile app as of last September, Starbucks Korea remains focused on retaining its loyal customer base.

The company has enhanced its app with features like quick ordering and preorder cancellations, while rolling out new perks, including more frequent free drinks through its revamped rewards program and a monthly subscription that offers afternoon discounts and free delivery.

The brand further curates unique store experiences with distinctive designs nationwide, ranging from a restored century-old hanok, or traditional Korean house, to a retro-themed former theater -- all to enrich experiences for both new and old customers.