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Challenges and Opportunities in China’s Coffee Market

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Challenges and Opportunities in China’s Coffee Market

Huxiu,

5 min read
5 take-aways
Audio & text

What's inside?

Traditionally, China is a nation of tea drinkers, but the Chinese are beginning to grow fond of coffee.

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Editorial Rating

7

Qualities

  • Innovative
  • Overview
  • Background

Recommendation

Traditionally, China is a nation of tea drinkers, but the Chinese are beginning to grow fond of coffee. Western brands such as Nestlé, Maxwell, Starbucks, Costa and McDonald’s and KFC are dominating the market. (Korean brands such as Caffé Bene, Maan Coffee and Zoo Coffee have come and gone.) Domestic brands are only beginning to stake their claims in the much-hyped new retail segment. In an op-ed piece published on Huxiu.com, venture capital firm Cyanhill Capital jots out the current landscape of China’s coffee market. Though the tips are worth considering, more in-depth analysis would make the piece more compelling. Nonetheless, getAbstract recommends reading this article with your next coffee.

Summary

Coffee is the world’s second-most traded commodity but isn’t widespread in China. That might soon change. According to the International Coffee Organization, China’s annual coffee consumption is growing at a rate of 15%, compared with a 2% world average. As world brands like Starbucks penetrate deeper into Chinese consumer culture, this growth could reach 30% in China’s bigger metropolises.

Despite the potential, coffee shops rank second on the list of toughest businesses to own in the food industry. Insiders say six of ten coffee shops will go bankrupt, three will break even and one will turn a profit. In 2016, roughly 100,000 cafés were in business in China, but more than 14% went bust that same year. Of 100 new cafés that only sell coffee, only 60 to 70 survive their first year. Even larger...

About the Author

Cyanhill Capital is a venture capital investment firm focused on consumer upgrades, technology, media, telecom and entertainment. 

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