China’s Surging Coffee Culture Sparks Intense Competition Among Global and Local Chains

China’s Surging Coffee Culture Sparks Intense Competition Among Global and Local Chains

Chinese coffee consumption is growing quickly, spurring cut-throat competition between local and foreign coffee chains that have opened thousands of branded shops in recent months and surpassed the number of coffee stores in the United States.

Analysts expect China’s growing thirst for coffee to be a key driver of future demand for the beans as coffee shops expand beyond Beijing and Shanghai to dozens of mid-sized cities where young professionals have warmed to the beverage.
China’s rising coffee demand is an opportunity for international chains like Starbucks and Tim Hortons that are investing heavily in China, though they face a steep challenge from rapidly expanding local brands.

Data from the International Coffee Organization sent to Reuters shows coffee consumption in China grew 15% in the year-long season ended in September from the previous cycle to 3.08 million bags.
“The Chinese consumer is increasingly adopting Western life styles and coffee is obviously one of the beverages that represent that,” said Jason Yu, greater China managing director of market research firm Kantar Worldpanel.

The number of branded coffee shops in China grew a staggering 58% in the last 12 months to 49,691 outlets, according to Alegra Group, a company that tracks growth of coffee chains.
There is harsh competition between the local chains and international chains, said Matthew Barry, a beverages analyst for Euromonitor. Each one is trying to grab as big a share as they can of the growing market, he said.

Alegra Group estimates China’s Luckin Coffee (LC0Ay.MU) added 5,059 stores in the last 12 months, while another Chinese chain, Cotti Coffee, opened 6,004 outlets in the period.

“The scale of the opportunity is such that both (local and international chains) will have to be very aggressive in facing off against the other and I think that should ensure a very dynamic marketplace in the next few years,” Barry said.

U.S.-based Starbucks (SBUX.O) opened 700 stores in China in the last year and said it is on track to operate around 9,000 stores in the country by 2025, while Canada’s Tim Hortons plans to have 3,000 stores in the country in four years.

Seizing market share is one of Luckin’s core targets, Chief Executive Jinyi Guo said during the firm’s third quarter earnings call.

Store openings are now happening in China’s smaller cities, Jason Yu said, which still have millions of inhabitants each.

“So that basically means in those places there’s still a lot of white space for coffee chains to grow,” he said.

Zixi Zhao, a 20-year old Beijing student, said he drinks coffee every day.

“I started drinking when I went to college,” he said. “I don’t drink much tea in general, but my mom, my dad, my grandmother they all drink tea.”

Ruoxuan Zhao, a 19-year-old student from Beijing, said drinking coffee was part of the fast-paced lifestyle of young people in China, who welcome the caffeine boost.

HAPPY GROWERS
The development is good news for coffee producers already benefiting from high prices due to adverse weather in some growing regions. Arabica coffee futures are trading near the highest in eight months, while robusta coffee hit the highest in 15 years last week.

China imports coffee mostly from Africa and South America.

Brazil’s coffee exporters group Cecafe said that shipments to China will nearly triple in 2023 to surpass 1 million bags for the first time, making China its eighth-largest market.

The United States Department of Agriculture sees China using 5 million bags of coffee in the new season (2023/24), which would make it the world’s seventh-largest consumer.

Chinese coffee consumption still pales when compared to top consumers the United States and Brazil that use more than 20 million bags per year. But the growing demand signals China is undergoing a cultural change similar to other tea-loving Asian countries including Japan and South Korea.

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This Privacy Policy applies only to our online activities and is valid for visitors to our website with regards to the information that they shared and/or collect in qahwaworld. This policy is not applicable to any information collected offline or via channels other than this website. Our Privacy Policy was created with the help of the Free Privacy Policy Generator. Consent By using our website, you hereby consent to our Privacy Policy and agree to its terms. Information we collect The personal information that you are asked to provide, and the reasons why you are asked to provide it, will be made clear to you at the point we ask you to provide your personal information. If you contact us directly, we may receive additional information about you such as your name, email address, phone number, the contents of the message and/or attachments you may send us, and any other information you may choose to provide. When you register for an Account, we may ask for your contact information, including items such as name, company name, address, email address, and telephone number. How we use your information We use the information we collect in various ways, including to: Provide, operate, and maintain our website Improve, personalize, and expand our website Understand and analyze how you use our website Develop new products, services, features, and functionality Communicate with you, either directly or through one of our partners, including for customer service, to provide you with updates and other information relating to the website, and for marketing and promotional purposes Send you emails Find and prevent fraud Log Files qahwaworld follows a standard procedure of using log files. These files log visitors when they visit websites. All hosting companies do this and a part of hosting services' analytics. The information collected by log files include internet protocol (IP) addresses, browser type, Internet Service Provider (ISP), date and time stamp, referring/exit pages, and possibly the number of clicks. These are not linked to any information that is personally identifiable. The purpose of the information is for analyzing trends, administering the site, tracking users' movement on the website, and gathering demographic information. Cookies and Web Beacons Like any other website, qahwaworld uses 'cookies'. These cookies are used to store information including visitors' preferences, and the pages on the website that the visitor accessed or visited. The information is used to optimize the users' experience by customizing our web page content based on visitors' browser type and/or other information. For more general information on cookies, please read the Cookies article on Generate Privacy Policy website. 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Third-party ad servers or ad networks uses technologies like cookies, JavaScript, or Web Beacons that are used in their respective advertisements and links that appear on qahwaworld, which are sent directly to users' browser. They automatically receive your IP address when this occurs. These technologies are used to measure the effectiveness of their advertising campaigns and/or to personalize the advertising content that you see on websites that you visit. Note that qahwaworld has no access to or control over these cookies that are used by third-party advertisers. Third Party Privacy Policies qahwaworld's Privacy Policy does not apply to other advertisers or websites. Thus, we are advising you to consult the respective Privacy Policies of these third-party ad servers for more detailed information. It may include their practices and instructions about how to opt-out of certain options. You can choose to disable cookies through your individual browser options. To know more detailed information about cookie management with specific web browsers, it can be found at the browsers' respective websites. CCPA Privacy Rights (Do Not Sell My Personal Information) Under the CCPA, among other rights, California consumers have the right to: Request that a business that collects a consumer's personal data disclose the categories and specific pieces of personal data that a business has collected about consumers. Request that a business delete any personal data about the consumer that a business has collected. Request that a business that sells a consumer's personal data, not sell the consumer's personal data. If you make a request, we have one month to respond to you. If you would like to exercise any of these rights, please contact us. GDPR Data Protection Rights We would like to make sure you are fully aware of all of your data protection rights. Every user is entitled to the following: The right to access – You have the right to request copies of your personal data. We may charge you a small fee for this service. The right to rectification – You have the right to request that we correct any information you believe is inaccurate. You also have the right to request that we complete the information you believe is incomplete. The right to erasure – You have the right to request that we erase your personal data, under certain conditions. The right to restrict processing – You have the right to request that we restrict the processing of your personal data, under certain conditions. The right to object to processing – You have the right to object to our processing of your personal data, under certain conditions. The right to data portability – You have the right to request that we transfer the data that we have collected to another organization, or directly to you, under certain conditions. If you make a request, we have one month to respond to you. If you would like to exercise any of these rights, please contact us. Children's Information Another part of our priority is adding protection for children while using the internet. We encourage parents and guardians to observe, participate in, and/or monitor and guide their online activity. qahwaworld does not knowingly collect any Personal Identifiable Information from children under the age of 13. If you think that your child provided this kind of information on our website, we strongly encourage you to contact us immediately and we will do our best efforts to promptly remove such information from our records.[:]
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