Coffee - China - August 2014
“China’s coffee market has enjoyed a rapid rise and its retail market value almost doubled from 2009 to 2013. The market has benefited from China’s ongoing urbanisation, the rising income levels of Chinese consumers and greater affinity towards western culture and lifestyles. As coffee products become more and more accessible and affordable to a larger population, the market is forecast to keep growing at an estimated CAGR of 10.9% in the coming five years.
Brands can market the western coffee culture to Chinese consumers, but still need to localise their products to fit Chinese palates. For the dominant instant coffee segment, growth opportunities come from expanding usage occasions and upgrading the majority medium users to heavy users through product innovation and advertisements. Moreover, there exists opportunities to encourage consumers to drink more premium products, such as premium instant coffee and fresh coffee.”
- Hao Qiu, Research Analyst
This report looks at the following questions:
- How can brands encourage more habitual consumption of instant coffee?
- How can brands overcome the taste and cost barriers of fresh coffee?
- How to change consumers’ negative perception of RTD coffee?
- How to motivate young consumers to drink more coffee?
Coffee Market in China
The market volume has enjoyed a steady but slower growth than market value in the past five years. RTD coffee drinks achieved the highest CAGR of 16% as companies increased investments in new product development from 2011 to capture increasingly busy Chinese consumers. However, compared to developed markets, such as Japan, the US and the UK, China’s coffee volume consumption per capita is still quite low. In 2013, China’s non-liquid coffee volume consumption per capita was 32 grams, which was about a 30th of the UK’s figure, a 50th of the US’s and a 70th of Japan’s. This indicates great room for growth in the future.
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