STiR coffee and tea magazine

36 STiR coffee and tea | 2022 Issue 5 (October/November) A By Mainbayar Badarch new forecast of China's market size in 2025 is 1 trillion yuan, or $137 billion. That's more than double the 2021 figure of 381.7 billion yuan ($56.6 billion), according to iiMedia Research, a Guangzhou-based data analysis agency. As of May 2022, the total number of registered coffee- related companies in China had exceeded 100,000. Studies by iiMedia Research shine a light on Chinese coffee spending: About 40% of surveyed consumers spend 50–100 yuan ($6.90–$13.80) per month on coffee, an increase of 8.8% over last year, while 27% spend 101- 150 yuan ($13.94–$20.70). About 49% buy instant, and 40% like ready-to- drink. More than 70% of the surveyed consumers prefer buying coffee in coffee shops. The coffee shop market is in flux. In 2020, Starbucks led the market with 36.4% share of sales, followed by Luckin Coffee (6.8%), Costa (2.3%), Pacific Coffee (1.7%), and U.B.C Coffee (1.4%), according to Statista. By number of shops, home-grown chain Luckin Coffee outranked Star- bucks starting in 2021, when it opened 1,221 new shops for a total of 6,024. The China operations of Canadian coffee group Tim Hortons announced in March it received an investment 1.2 billion yuan to expand its business over Big in China: A $137 Billion Coffee Market in 2025 Where will coffee go next? China! There are more than 500 active Q graders in China, where appreciation of specialty coffee follows in the hallowed steps of tea connoisseurship. the next five years, increasing its number of China venues from 410 to 2,750 by 2026. As for products, instant coffee accounts for 52% of the total market, followed by 36% for ground coffee and 11% for ready-to-drink. But instant has been losing share for years as ground coffee gains. The coffee market is already crowded in first– and second-tier cities, and competition is fierce. That has driven brands such like Luckin and Star- bucks to target third– and fourth-tier cities. One tactic is to position products at lower prices. Coffee is so hot that other types of businesses are joining the market. Domestic sportswear gi- ant Li-Ning launched coffee kiosks in some of its 7,000 outlets, under the brand name Ning Coffee. In previous years, China Post and Beijing TRT Group, a chain of traditional Chinese medicine pharmacies, established their own coffee shops. Even China's leading oil refiner, Sinopec, launched coffee shops.

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