Chinese consumers waking up to coffee culture, research suggests

Recent figures show that China’s coffee shop industry is booming, with big brands, smaller roasters and local Chinese chains all showing signs of growth.

Starbucks reserve roastery  in Shanghai [File photo: IC]

Market intelligence company Euromonitor says coffee consumption in China has nearly tripled in the last four years, with the country’s coffee shops worth 30.1bn RMB (£3.4bn) in 2017 – up 5 billion RMB (£565m) from the previous year.

The trend hasn’t gone unnoticed by global coffee brands; earlier this year, Starbucks announced it would open 600 new stores annually for the next four years, reaching 6,000 stores by 2022.

China is home to the biggest Starbucks branch in the world – its 30,000-square-foot Reserve Roastery in Shanghai is nearly twice as big as its US counterpart in Seattle.

The coffee chain has also partnered with Alibaba to “personalize” its experience for Chinese customers – and says it’s looking to start delivery services in Beijing and Shanghai in future.

The UK’s biggest coffee brand, Costa, also has plans to expand in China. Soon to be owned by Coca-Cola, the firm says it plans to grow its presence in China, building on the 449 stores it currently has and increasing this number to 1,200 stores by 2022.

A recent report by Euromonitor suggests that British brands can do well in Chinese coffee shop market if they play up their international status, because consumers in China are more likely to trust a foreign brand if it is selling something not ‘traditional’ to China – such as coffee.

Brian Williams, a coffee journalist who visited Shanghai and Beijing in 2016 and 2017, agreed that he’s seen growth in the industry over the last few years. “I can’t speak to the mass market, but in the high-end, speciality sector, shops are opening all the time,” he says.

“The scene is very Western, with many of the shops not looking out of place in Shoreditch or Brooklyn,” he added. But while the scene may be thriving, it is still confined to a small handful of major cities. “Prices are similar to western prices and it is definitely seen as a lifestyle choice rather than a daily necessity,” he concluded.