China's tea-drinking tradition and booming cafe culture have catapulted the country to the top, now boasting more branded cafes than the United States. Recently, the number of branded cafes in China increased by a staggering 58% within a year, reaching a whopping 49,691 outlets[1]!
Starbucks, the global coffee giant, opened 785 stores during this period and became the second-largest provider of branded coffee, only trailing behind Ruixing Coffee, a Chinese startup company that went public on Wall Street in 2020 but was embroiled in a fraud scandal three years prior[1]. Despite the controversy, Ruixing Coffee surged ahead with over 13,000 branches, making it the largest coffee chain in China[1]!
In a report, over 90% of the surveyed Chinese coffeehouse consumers stated they drink coffee at least once a week, while 64% purchase icy coffees at least once a week[1]. The report further revealed that almost 90% of the respondents patronize coffee shops at least once a week or order deliveries there[1].
China's coffee industry has experienced tremendous growth, becoming a global hub in the process. Earlier this year, Starbucks invested over 200 million dollars in a new campus located in eastern China, marking its largest investment in a coffee production and distribution center outside the United States[1]. China has been a significant growth engine for Starbucks, serving as the second-largest market worldwide and the first overseas market for the company[1].
However, Starbucks CEO Laxman Narasimhan emphasized that the company is still in the initial stages of development in China, as the coffee consumption in the country, often prevalent for tea, remains relatively low[1]. Starbucks plans to open an additional 9,000 stores in China by 2025 to capitalize on the growth opportunities[1].
The cafes' business in China has seen significant shifts, with Mixue surpassing McDonald's to become the world's largest food and beverage chain by store count, with 45,302 stores globally, including 3,700 stores in China[2]. Other major players, including Starbucks, Luckin Coffee, Chagee, ChaPanda, and Wula Coffee, have expanded their presence in the country's cafe market[2].
While China dominates the global café market, the United States also boasts a substantial number of branded cafes, although specific data is not available[2]. Companies like Japanese bakery-cafe chain Bread, Espresso & have also entered the U.S. market to participate in this growing trend[3].
China's cafe culture is thriving, driven by domestic tourism and a growing popularity of tea and coffee beverages among the youth[1]. According to industry predictions, the market size of Chinese-style tea drinks will reach 242.5 billion yuan by 2025[1].
References: [1] "Starbucks is opening 785 new stores in China," edition.cnn.com, 2023. [2] "The global coffee market: Trends and developments," koelnmesse, 2023. [3] "Bread, Espresso & continues its U.S. expansion with a new California store," PR Newswire, 2023. [4] "The increasingly competitive coffee market in China," Fortune Business Insights, 2023.
