China, which used to be a country of long-standing tea, is being reborn as a country of coffee. Not only is it a “quantitative increase” in consumption and coffee shops increasing, but the trend of high-end coffee is remarkable as it adds unique aroma and health functionality from instant coffee to coffee beans. It is analyzed that domestic companies that want to enter the Chinese coffee market should focus on high-end and differentiation in order to survive in the local market.
According to a report titled “Growth of Chinese Coffee Market and Changing Consumer Taste” recently released by the Korea Trade-Investment Promotion Agency (KOTRA), coffee has become firmly established in China as a daily habit, not a favorite food. According to the 2024 China Urban Coffee Development Report, the annual coffee consumption per person in China increased from nine cups in 2016 to 16.74 cups last year. The number of café stores is also rapidly increasing. The number of café stores in China now stands at around 132,800, an increase of more than 30,000 in two years. According to market researcher Euromonitor, the size of the Chinese coffee market reached 14.922 billion yuan (W2.8 trillion) in 2023.
In particular, the growth of the coffee beans market is clear due to the trend of diversification and luxury of consumer coffee tastes. Last year, the size of the coffee beans market recorded 1.173 billion yuan, and the average annual growth rate over five years recorded 19.3%. In the instant coffee-oriented market, which used to account for an absolute percentage, the proportion of coffee sales continues to expand. As coffee consumption increases, consumers’ taste for coffee is also changing. Recently, exotic coffee that adds sensuous flavors such as fruits, nuts, and condiments to traditional coffee such as espresso and latte is gaining popularity among the younger generation.
In response, Chinese coffee manufacturers are releasing a variety of coffee products that reflect the individuality and taste of the MZ generation, such as coconut-flavored latte, watermelon-flavored coffee beans, and cinnamon-flavored americano. Even instant coffee is attracting local attention by differentiating the quality of the beans themselves, or premium products using freeze-drying, ultra-fine grinding techniques, and flavor preservation techniques. As more and more consumers care about health, interest in functional coffee is also increasing. The functional coffee market, which contains various health functional ingredients such as youngji mushrooms and goji, is expected to grow while maintaining the aroma and flavor of coffee.
“Compared to traditional coffee-drinking countries such as the United States and Europe, China’s per capita coffee consumption is very low,” an official from Z, a local food and beverage distributor, said in an interview with KOTRA Shenyang Trade Center. However, coffee culture is rapidly spreading among young people, and the outlook for the Chinese coffee market will be very bright in the future. According to Euromonitor, China’s coffee market is expected to grow to 17.126 billion yuan in 2028.
“Our coffee companies should focus on high-end and differentiation strategies in order to survive in China,” a KOTRA official said. “While developing products in line with the latest trends in coffee consumption, various efforts such as building premium images and establishing marketing strategies using SNS are needed.”
SOPHIA KIM
US ASIA JOURNAL
