China is now the world leader in coffee shops
Summary
- But the average Chinese person still guzzles much less than a typical American
The historic city of Suzhou, about an hour’s drive from Shanghai, is criss-crossed with canals. Old whitewashed buildings line the banks. A century ago some of these would have been chaguans, or traditional teahouses, where locals gathered to discuss the news or conduct business. Today a visitor is more likely to find shops serving a different kind of beverage. There are dozens of Starbucks outlets in Suzhou, as well as other coffee sellers. Some even look like old chaguans—from the outside at least.
Between 2010 and 2022 coffee consumption per person in China rose fourfold (see chart), according to the International Coffee Organisation, a group of producer and user countries. (China’s GDP per person doubled over the same period.) The average Chinese person still drinks a fraction of the amount of coffee guzzled by the typical American: 0.1kg per year compared with 4.7kg. But last year China surpassed America, becoming the country with the most branded coffee shops (places like Starbucks) in the world, as the World Coffee Portal, a research firm, reported. China is home to nearly 50,000 such outlets.
The early history of coffee in China is fuzzy. By some accounts it was Danes who opened the first coffee shop in the country in the 1830s. The drink didn’t catch on, in part because the Qing dynasty took a dim view of foreigners and sought to curb their influence. A record from that period described coffee as a “black liquor, which the foreign devils drank after meals, saying it can help with digestion". A century later Lu Xun, a celebrated author, wrote that he didn’t drink the stuff: “I always thought it was for the foreign excellencies." He and most other Chinese people preferred tea.
But after China introduced market reforms and opened up to the world in the 1980s, foreign firms such as Maxwell House and Nestlé brought instant coffee to the country. They catered to local tastes, making their mixes sweeter and less bitter than what they sold elsewhere. Western-style coffee shops arrived years later—chief among them Starbucks in 1999. The company’s freshly brewed coffee was new to China. Having a laptop in one hand and a (relatively expensive) cup of Starbucks in the other became a way for young middle-class people to indicate their status.
The biggest coffee-drinking demographic is still “white-collar workers in first-tier cities aged between 20 and 40", according to Deloitte, a consulting firm. China’s experience mirrors that of Japan some 50 years ago, when rising incomes led to more coffee consumption. A surge in office jobs—and long working hours—in China has also fuelled demand.
Today, though, a wider range of the population is partaking thanks to the rise of domestic coffee chains selling affordable brews. The leader is Luckin Coffee, with over 20,000 outlets. Starbucks, by comparison, has 7,300 shops. A cup of basic Luckin coffee is about a third of the price of an equivalent Starbucks offering. Luckin’s sales in China exceeded Starbucks’ for the first time in 2023. Both chains are expanding into smaller cities.
Coffee companies in China are also still trying to cater to local tastes. One innovation has been the “tea-coffee", a concoction that blends the two drinks. Luckin serves such fare as Oolong Latte and Jasmine Sea Salt Latte. Qing-dynasty officials are surely rolling in their graves.
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