China becomes coffee chain capital of the world

2023 has been a wild year for China’s coffee market. From a vicious price war that saw a cup of coffee go for 9.9 RMB to a slew of internet-breaking marketing collaborations, coffee brands have been at the centre of China’s hottest consumption trends this year.

This flurry of activity is borne out in the data. According to research by World Coffee Portal, the number of branded coffee shops in China grew a whopping 58% over the past 12 months to hit a total of 49,691 outlets. By comparison, the US only saw a 4% uptick in branded coffee shops, which now sit at 40,062 – over 9,000 fewer than in China. This is the first time the US has been surpassed since World Coffee Portal began conducting this research in 1999.

“The East Asian coffee shop market is clearly experiencing rapid growth led by phenomenal outlet expansion in China, which has fast become a global coffee industry powerhouse,” World Coffee Portal founder and chief executive Jeffrey Young said in a statement. After China, Malaysia is the second fastest-growing coffee market in East Asia with 28% more outlets added in the last 12 months.

China’s phenomenal growth was spurred by its convenience-centric model, where hole-in-the-wall outlets and mobile pre-order are the go-to. World Coffee Portal’s research found that over 85% of Chinese consumers pre-ordered or ordered for delivery from a coffee shop within the last 12 months, with 57% preferring beverage delivery over visiting a coffee shop in person.

China’s homegrown budget coffee chain Luckin epitomises this trend, clocking in two massive records this year to dominate the domestic market. In June, the Xiamen-based brand opened its 10,000th store, making it the coffee chain with the most outlets in the country and leaving its biggest rival Starbucks in the dust with 6,806 stores. Luckin then went on to surpass Starbucks’ single-quarter revenue for the first time, consolidating its status as the biggest coffee chain in China.

In the rest of East Asia, Starbucks still led the way this year, opening 1,223 new outlets to reach 13,524 stores across 15 markets. As in China, domestic chains are slowly starting to snatch a bigger market share, such as Mega Coffee in South Korea, Tomoro in Indonesia and Zus in Malaysia.


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