Stirring up China's coffee market | WARC | The Feed

Stirring up China's coffee market

China’s coffee market is becoming increasingly crowded as both local brands and international chains gear up for expansion in the expectation that coffee drinking will become a daily habit. 

Who’s doing what 

• US chain Starbucks currently has 6,000 stores but plans to have 9,000 by 2025.
• Canadian chain Tim Hortons currently has 600 Tims China stores and is aiming for 2,700 by 2026.
• There are some 2,500 McCafé outlets and McDonald’s wants to add another 1,000 this year. 
• QSR company Yum China has partnered with Italian coffee brand Lavazza with a goal of opening 1,000 stores by 2025.
• Local brand Luckin Coffee has put an accounting scandal behind it and had 8,214 stores by the end of December 2022, 36% up on a year earlier.
• Cotti Coffee, launched by former Luckin executives in Q4 2022, has already opened 1,300 stores according to media reports, and is aiming for 10,000 by 2025.

Why it matters

With the end of pandemic restrictions, coffee chains see significant opportunities for growth, especially in the smaller cities where much of the expansion is taking place. But price – and marketing – will be a crucial factor in persuading consumers to see takeaway coffee as a daily habit rather than an occasional treat with friends. 

Key quote

“The Chinese consumer is learning what they like about coffee. [They] are very dynamic, they’re very demanding  … you need to stay actively innovating” – Peter Yu, managing partner of Cartesian Capital (the majority shareholder of Tims China), speaking to the Financial Times. 

Sourced from Financial Times, World Coffee Portal, Luckin Coffee, WARC