The competition is warming up in Indonesia's cafe industry with new players entering the market every year.

Believing in the business’ potential, Syali Gestanon teamed up with Rahan Yama Gusta, to start a Bandung, West Java, cafe franchise in Bogor two years ago.

Syali, who knows the owner of the franchise well, and Rahan established their own cafe brand with an investment of 50 million rupiah (US$5,057). RoomOurs offers a glass of coffee for 7,000-12,000 rupiah and is frequented by university students.

“We had to move the cafe twice. Now we are renovating our current place and hope to start afresh within two months,” Syali said.

Business consultant Aidil Akbar Madjid said the cafe business was very profitable, citing prices, Indonesia’s history with coffee and lifestyle as three factors that made the business attractive. “People now tend to spend more time at cafes. It’s part of their lifestyle,” he said.

Pranoto Sunarto, Indonesian Coffee Exporters and Industry Association (AEKI) deputy chairman for the specialty coffee industry, said the cafe business had been blooming over the past three years. “But there are only four or five coffee companies that own more than five branches,” he said, adding that only about 260 cafes really focused on marketing coffee as their main product.

Annual national coffee consumption now stands at 200,000 tons, including 10,000 to 20,000 tons coming from cafes; it is increasing by around 8 per cent every year, according to Pranoto.

Irvan Helmi and Muhammad “Agam” Abgari, co-founders and co-owners of local brand Anomali Coffee, said their coffee consumption had hit 3 tons a month from around 20 kilogrammes per month in 2007; when they opened their first store.

Anomali currently operates four stores in Jakarta and two in Bali and reaps about 2 billion rupiah annually from its cafes and wholesale coffee bean business.

According to the duo, they established Anomali’s own coffee tasters in 2011 to maintain the quality.

The cafe hype has also proved profitable for Singapore-headquartered Bengawan Solo Coffee, which generates up to 5 billion rupiah in revenues, with an annual increase of 20 per cent, according to Bengawan Solo general manager Renaldi.

The company runs 46 primary outlets, which are fully owned by the company, and five other franchised outlets. The 51 outlets are located in Bandung; Jakarta; Surabaya in East Java; and Yogyakarta. It plans on opening 10 new outlets by year-end.

Renaldi said the amount of investment per outlet depended on the establishment’s concept, whether it be a full-scale in-line store, an island with only a few tables and a display shelf or a push cart.

“More than 60 per cent of our stores are in-line stores. The initial investment ranges from hundreds of millions of rupiah to 1 billion rupiah,” he said.

Meanwhile, major player US-based Starbucks Coffee Indonesia intends to run 250 stores across the country by 2015 to grab a wider market, adding to the 89 existing ones.

“[Headquarters] feels we are doing a good job and they want us to accelerate expansion more,” Starbucks Coffee Indonesia managing director Anthony Cottan said.

He acknowledged the company had benefited from the hustle and bustle of Indonesia’s big cities, operating 10 drive-thru outlets, the most in any Asian country.

In January, it opened its first train station store in Gambir, Central Jakarta, and plans to open another at Sudirman train station when the rail link to Soekarno-Hatta International Airport, west of Jakarta, is established.

*US$1=9,862 rupiah