China Coffee Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Coffee Consumption in China Market report is segmented by product type (whole-bean, ground coffee, instant coffee, and coffee pods and capsules) and distribution channel (on-trade and off-trade). The report offers market size and forecasts for the above-mentioned segments in value (in USD).

China Coffee Market Size

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China Coffee Market Summary
Study Period 2019 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2019 - 2022
CAGR 1.90 %
Market Concentration Low

Major Players

China Coffee Market Major Players

*Disclaimer: Major Players sorted in no particular order

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China Coffee Market Analysis

The Chinese coffee market size is estimated at USD 2.06 billion in 2023. It is projected to reach USD 2.26 billion by 2028, registering a CAGR of 1.90% during the forecast period (2023-2028).

  • The growing demand for coffee in China can be attributed to a resilient chain of international and domestic coffee shops, such as Luchin Coffee and Starbucks, that have expanded significantly in China, making coffee more accessible and familiar. Further, the perception of coffee as a health-conscious choice when consumed in moderation by consumers has contributed to its popularity. In addition, the growth of e-commerce platforms has made it easier for consumers to purchase high-quality coffee.
  • While tea remains the traditional drink in China, the demand for coffee continues to grow, especially in urban areas and among working professionals. According to data from the China Coffee Association Beijing (CCAB), coffee consumption is increasing at an annual rate of 15%.
  • Favorable government interventions are further supporting the market growth. For instance, the Chinese government supported the I-coffee Exposition in Haikou to promote the international coffee trade and coffee-drinking culture in the country. The I-Coffee Exposition is focused on coffee production, marketing, and consumption. The current leaders in the market, like Starbucks and Nestle, have also played a significant role in the growth of the coffee culture in China.

China Coffee Market Trends

Government Initiatives and E-commerce Penetration Drive the Market

  • China's commercial coffee production is limited mainly to the two southern provinces of Yunnan and Hainan, while a smaller amount is produced in the Fujian province. Yunnan has more than 60% of China's coffee. Recently, Yunnan's local government established the Tea and Coffee Industry Bureau, whose mission is to promote Yunnan's coffee in the domestic and international markets.
  • China lags behind other nations in the production of coffee and is dependent on imports. According to the US Department of Agriculture (USDA), coffee production in China in 2020 was 1800 thousand 60 kg bags 2020, whereas China imported 3804 thousand 60 kg bags in 2020. Thus, the government and manufacturers need to invest more in R&D activities and develop better measures to increase the production of coffee.
  • Further, there is an increase in retail E-commerce sales in China. According to the International Trade Administration, in 2021, China's retail e-commerce sales reached USD 2.77 trillion, representing a 20% increase over the previous year. Also, according to the World Bank, 73% of China's population were active internet users in 2021, signifying an increase of 9% compared to 2019.
  • Such an increase in China's retail e-commerce and internet usage will positively impact the scale of online instant coffee buying, according to the 2020 joint survey issued by Alibaba and Ele. China's online coffee buying has grown 1.5 times since 2019, with instant coffee constituting a 13.5% share of the overall coffee products.
Global Bags Market: Market Size (%), Global, 2022

Increasing Consumption of Instant Coffee in China

The instant coffee segment held a significant market share owing to its convenience. Moreover, middle-class consumers' rising household expenditure, changing lifestyles, and acceptance of Western cultural trends have increased demand for instant coffee across the country. In line with consumers' growing preferences for coffee over other beverages, instant coffee manufacturers have launched several flavored products to attract a broader customer base. Online retailing has been a minor distribution channel for instant coffee in China for the past few years. It is likely to gain prominence in the market during the forecast period owing to the convenience it provides to consumers. Consumers find it easy to choose their preferred brands from the wide variety of product choices available.

Further, product innovations are expected to aid the market growth during the forecast period. Players are innovating with products to differentiate product offerings and broaden the customer base. For instance, in August 2022, Zhongxuegao, a Chinese brand dubbed the 'Hermès of ice cream' for its premium prices, unveiled a new coffee pop-up product in nearly 600 cafés in China. The products included a blend of Zhongxuegao's almond and yogurt-flavored ice cream with cold-brew coffee, while others added Japanese probiotic milk beverage Yakult or jasmine green tea. Thus, many private-labeled companies launched their versions of coffee RTD cocktail drinks to satisfy the increasing demand for coffee and spirit-based RTD offerings.

Coffee Market: Distribution of coffee market, China, 2023, by coffee type

China Coffee Industry Overview

The Chinese coffee market is highly competitive, with a strong presence of local and global players. Thus, to sustain their positions in the market, the players are bringing innovations in packaging and product offerings to cater to consumers' diversified demands for coffee. They also focus on social media platforms and online distribution channels for marketing and branding their products. Owing to a significant rise in the consumption of coffee, global and local players are investing in expanding their production facilities across the country. The key players in the market are Starbucks Coffee Company, Nestle SA, Gloria Jeans, JAB Holding Company, and Luigi Lavazza SPA.

China Coffee Market Leaders

  1. Starbucks Coffee Company

  2. Nestle SA

  3. Luigi Lavazza SPA

  4. Gloria Jeans

  5. JAB Holding Company

*Disclaimer: Major Players sorted in no particular order

China Coffee Market Concentration
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China Coffee Market News

  • April 2023: Nestle, the Swiss food and beverage industry leader, unveiled Nescafe Ice Roast instant coffee in China, catering to the growing demand for "cafe-style cold coffee experiences" in the comfort of one's home.
  • September 2022: Luckin Coffee, a prominent Chinese beverage chain, initiated an entrepreneurial endeavor by introducing a new coffee brand called "Cotti Coffee."
  • January 2022: Ethiopian Coffee Brands made their debut on China's largest e-commerce Platform. This strategic move aims to harness the infrastructure offered by the electronic World Trade Platform (e-WTP) to create a conducive environment for promoting e-commerce and tourism among African entrepreneurs, all while bringing high-quality African products into the Chinese market.

China Coffee Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

      1. 4.1.1 Government Initiatives and E-commerce Penetration

    2. 4.2 Market Restraints

      1. 4.2.1 Detrimental Health Impact of Caffeine Intake

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Product Type

      1. 5.1.1 Whole-bean

      2. 5.1.2 Ground Coffee

      3. 5.1.3 Instant Coffee

      4. 5.1.4 Coffee Pods and Capsules

    2. 5.2 By Distribution Channel

      1. 5.2.1 On-trade

      2. 5.2.2 Off-trade

        1. 5.2.2.1 Supermarkets/Hypermarkets

        2. 5.2.2.2 Specialty Stores

        3. 5.2.2.3 Convenience Stores

        4. 5.2.2.4 Online Retail Stores

        5. 5.2.2.5 Other Distribution Channels

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Active Companies

    2. 6.2 Most Adopted Strategies

    3. 6.3 Market Share Analysis

    4. 6.4 Company Profiles

      1. 6.4.1 Nestle SA

      2. 6.4.2 Starbucks Corporation

      3. 6.4.3 Luckin Coffee

      4. 6.4.4 Hainan LISUN Investment Co.

      5. 6.4.5 Dehong Hogood Coffee Co. Ltd

      6. 6.4.6 Gloria Jean's

      7. 6.4.7 The Kraft Heinz Company

      8. 6.4.8 The Coca-Cola Company

      9. 6.4.9 JAB Holding Company

      10. 6.4.10 Luigi Lavazza SpA

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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China Coffee Industry Segmentation

Coffee is a brewed drink prepared from roasted coffee beans derived from the seeds of berries of certain coffee species. Roasted beans are grounded and then brewed with near-boiling water to produce the beverage known as coffee. 

The market studied is segmented by product type and distribution channel. By product type, the coffee market is segmented into whole-bean, ground coffee, instant coffee, and coffee pods and capsules. By distribution channel, the market studied is segmented into on-trade and off-trade. The off-trade channel is sub-segmented into supermarkets/hypermarkets, convenience stores, specialty stores, online retail stores, and other distribution channels.

For each segment, the market sizing and forecasts have been done on the basis of value (in USD).

By Product Type
Whole-bean
Ground Coffee
Instant Coffee
Coffee Pods and Capsules
By Distribution Channel
On-trade
Off-trade
Supermarkets/Hypermarkets
Specialty Stores
Convenience Stores
Online Retail Stores
Other Distribution Channels
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China Coffee Market Research FAQs

The China Coffee Market is projected to register a CAGR of 1.9% during the forecast period (2024-2029)

Starbucks Coffee Company, Nestle SA, Luigi Lavazza SPA, Gloria Jeans and JAB Holding Company are the major companies operating in the China Coffee Market.

The report covers the China Coffee Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the China Coffee Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

The challenges for foreign coffee brands entering the China Market are a) Competition b) Local tastes and preferences c) Importance of digital marketing

China Coffee Industry Report

The coffee market in China is flourishing, influenced by a growing preference for diverse coffee products such as instant coffee, ground coffee, and whole beans, especially in southern provinces like Yunnan and Hainan. This growth is supported by the rising consumer interest in various coffee types and brewing methods, aligned with an expanding cafe culture and increased household income boosting the demand for convenient, instant coffee varieties. Notably, the China coffee market size and sector has seen significant advancement through e-commerce platforms, with Alibaba's Tmall and JD.com leading, which enhance market access and consumer engagement. Despite these advancements, regional taste preferences and complex supply chains present challenges. The market, segmented by product type and distribution channel, reflects a dynamic environment propelled by evolving consumer tastes and strategic initiatives by local governments to promote regional coffee production. For more detailed insights and forecasts on the Chinese coffee brands and the coffee market in China, Mordor Intelligence™ Industry Reports provide comprehensive market analysis including growth rates and market share, available for free download.

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China Coffee Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)