INTERNATIONAL SPOTLIGHT
Starbucks operates more than 360
locations in China.
CHINA
the Next Frontier in Coffee Growth
BY JOSH BATE M AN
W
ith a population of 1.4 billion people, China
offers tremendous opportunities for those in the
coffee industry. According to the market intelligence firm
Euromonitor International, China's coffee consumption
is forecasted to grow at 9 percent over the next five years.
Although this is half of what the growth rate has been over the
last five years, it is still well above the consensus 2-3 percent
growth rate expected globally.
GLOBAL CHAINS AND INDEPENDENT
BOUTIQUES
According to research firm Mintel Group, the number of
cafes in China doubled over the last five years and reached
32,000 in 2012.
The global coffee chains recognize the potential China
offers and have made significant investments in the country.
Starbucks first opened a store in mainland China in 1999
and now controls a commanding 60 percent market share.
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Over the last three years, they have more than doubled their
number of stores to more than 360.
Starbucks management views China as one of their most
important markets going forward. China Daily reported that
during the 2012 annual shareholder meeting, CEO Howard
Schultz said: "I'm very optimistic about the Chinese economy
and the future of China. It's no doubt that one day China
will become our second-largest market after the US and it's
possible that, over many years, potentially the largest one."
Other global chains with large presences in China include
Costa Coffee, Pacific Coffee, Paris Baguette, Coffee Bean &
Tea Leaf, 85° Bakery Cafe, SPR Coffee, and UBC Coffee.
It is not only the global chains realizing success in China.
Particularly in the smaller cities, many boutiques are
opening. In Xiamen, a smaller city by Chinese standards
with a population of 3.5 million people, Emma's Brew House
(EBH) has grown from one store in 2007 to three today.
According to Jessie Tsai, an EBH representative, the number