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Coffee Houses - China - December 2015

“Given the relatively low consumption per capita of coffee drinks compared to the global level, coupled with the confidence demonstrated by international coffee chains to further penetrate China, there is strong evidence for promising growth for the coffee shop market. However, specialist coffee house operators should avoid being over-optimistic as they are facing fierce challenges from bakery and fast food chains with cheaper alternatives.

To justify the premium image, the ability to create menus with a healthy twist, the use of coffee beans from specific regions, and multifunctional store design are the core strategies.”
– Esther Lau, Research Analyst

This report looks at the following areas:

  • Where are different chains standing currently?
  • How to attract new coffee houses adopters against bakery and fast food chains
  • Adding experience, ethical and cultural elements for coffee house enthusiasts

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Table of contents

  1. Overview

      • Definition
        • Methodology
        • Executive Summary

            • The market
              • Figure 1: Total value sales of coffee houses in China, 2010-20
            • Companies and brands
              • Market becoming increasingly consolidated towards international chains
                • Figure 2: Market share of leading companies in the coffee shop market in China, 2013 and 2014
              • Who’s innovating?
                • The consumer
                  • Four different types of coffee house consumers
                    • Figure 3: Target group of attitudes towards coffee houses, September 2015
                  • The importance of ambience and location
                    • Figure 4: Attitudes towards coffee houses, September 2015
                  • Threat from bakery and fast food chains
                    • Figure 5: Changes in spending on freshly made coffee at different venues in the last six months, September 2015
                  • The importance of afternoon tea innovation
                    • Figure 6: Occasions of visiting specialist coffee houses in the last six months, September 2015
                  • Perception of different specialist coffee houses
                    • Figure 7: Elements associated with different specialist coffee houses, September 2015
                  • Food enticement
                    • Figure 8: Interests in coffee shop menus, September 2015
                  • The scope for coffee shops designed for working and studying purpose
                    • Figure 9: The top three most appealing features at coffee houses, September 2015
                  • What we think
                  • Issues and Insights

                    • Where are different chains standing currently?
                      • The facts
                        • The implications
                          • How to attract new coffee houses adopters against bakery and fast food chains
                            • The facts
                              • The implications
                                • Adding experience, ethical and cultural elements for coffee house enthusiasts
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Will the Chinese coffee shop market be able to sustain robust growth in the next five years?
                                        • How has the rise of bakery chains changed the game?
                                          • What is the future for coffee chains?
                                          • Market Size and Forecast

                                            • Consumers’ increasingly sophisticated tastes encourage the expansion of coffee chains
                                              • Figure 10: Total value and volume of coffee shops, China, 2013 and 2014
                                            • The forecast
                                              • Figure 11: Total value sales of coffee houses in China, 2010-20
                                              • Figure 12: Total volume of coffee shops in China, 2010-20
                                          • Market Drivers and Barriers

                                            • Upgraded tastes in packaged coffee flavours helps the development of coffee shops
                                              • Figure 13: Total retail share of coffee, by segment, China, 2012-14
                                            • Future demand for experiential consumption is growing at a strong pace
                                              • The impact of the economic slowdown
                                                • Possible threat from cheaper alternatives
                                                • Market Segmentation

                                                  • The share of chains is getting more powerful
                                                    • Figure 14: Segment performance of coffee houses market in China, 2010-14
                                                  • Independent coffee houses fail to shine
                                                    • Figure 15: Segment performance of the coffee shop market in China, 2010-14
                                                • Key Players – What You Need to Know

                                                  • Domestic chains are facing difficult situation
                                                    • Starbucks is the leader for innovation
                                                      • The scope for collaborating with art and culture events
                                                      • Market Share

                                                        • Market becoming increasingly consolidated towards international chains
                                                          • Figure 16: Market share of leading companies in the coffee shop market in China, 2013 and 2014
                                                        • Market headwind for domestic coffee chains
                                                        • Who’s Innovating?

                                                          • Special afternoon tea set with fashion labels
                                                            • Product crossover and luxury brands invasion
                                                              • Eco-friendly campaigns
                                                                • Greater consumer involvement in coffee making process
                                                                  • Art and culture-related events to boost sophistication
                                                                    • Expanding alcohol beverage selection and alcohol inspired innovation
                                                                    • The Consumer – What You Need to Know

                                                                      • The profile of four main types of coffee house consumers
                                                                        • Men in the 20s spend more on both international coffee chains and fast food chains
                                                                          • The demand for afternoon tea occasions is high
                                                                            • Multifunctional store design provides greater incentives for non-frequent coffee shop users to visit
                                                                            • Four Different Types of Coffee House Consumers

                                                                                • Figure 17: Target group of attitudes towards coffee houses, September 2015
                                                                              • Disengaged
                                                                                • Demographics
                                                                                    • Figure 18: Disengaged target group of attitudes towards coffee houses, by demographics, September 2015
                                                                                  • Characteristics
                                                                                    • Copying the Affluent
                                                                                      • Demographics
                                                                                          • Figure 19: Copying the Affluent target group of attitudes towards coffee houses, by demographics, September 2015
                                                                                        • Characteristics
                                                                                          • Non-Mainstream Aspirants
                                                                                            • Demographics
                                                                                                • Figure 20: Non-Mainstream Aspirants target group of attitudes towards coffee houses, by demographics, September 2015
                                                                                              • Characteristics
                                                                                                • Classic Affluent
                                                                                                  • Demographics
                                                                                                      • Figure 21: Classic Affluent target group of attitudes towards coffee houses, by demographics, September 2015
                                                                                                    • Characteristics
                                                                                                    • Attitudes towards Coffee Houses

                                                                                                      • Three key attitudinal indicators
                                                                                                        • Figure 22: Attitudes towards coffee houses, September 2015
                                                                                                      • The importance of ambience and location
                                                                                                        • Figure 23: Attitudes towards coffee houses, by gender and age, and monthly personal income, September 2015
                                                                                                      • Experiential consumption
                                                                                                        • Figure 24: Interests in special features at coffee houses, by clusters, September 2015
                                                                                                    • Spending on Freshly Made Coffee at Different Venues

                                                                                                      • Threat from bakery and fast food chains
                                                                                                        • Figure 25: Changes in spending on freshly made coffee at different venues in the last six months, September 2015
                                                                                                        • Figure 26: Changes in spending on freshly made coffee at different venues in the last six months, by gender and age, and monthly personal income, September 2015
                                                                                                      • The growth of independent coffee houses is facing a bottleneck
                                                                                                        • Figure 27: Changes in spending on freshly made coffee at different venues in the last six months, by gender and age, September 2015
                                                                                                    • Occasions of Visiting Specialist Coffee Houses

                                                                                                      • The importance of afternoon tea innovation
                                                                                                        • Figure 28: Occasions of visiting specialist coffee houses in the last six months, September 2015
                                                                                                        • Figure 29: Occasions of visiting specialist coffee houses in the last six months, by clusters, September 2015
                                                                                                      • Catering for men during working hours
                                                                                                        • Figure 30: Occasions of visiting specialist coffee houses in the last six months, by gender and age, September 2015
                                                                                                    • Perceptions of Different Specialist Coffee Houses

                                                                                                      • Correspondence map – Methodology
                                                                                                        • Where do Western, South Korean, Chinese coffee chains and independent cafés stand?
                                                                                                          • Figure 31: Elements associated with different specialist coffee houses, September 2015
                                                                                                        • European and American coffee chains have a classic premium image
                                                                                                          • South Korean coffee chains maintain casual relaxed positioning
                                                                                                            • Independent coffee houses share similar attributes to South Korean coffee chains
                                                                                                              • How can domestic coffee chains survive?
                                                                                                              • Menu Enticements at Coffee Shops

                                                                                                                • Justify the innovator for healthy menus
                                                                                                                  • Figure 32: Interests in coffee shops' menu enticement, September 2015
                                                                                                                • Food enticements
                                                                                                                  • Figure 33: Menu enticement at coffee shops, by clusters, September 2015
                                                                                                                • Drink enticements
                                                                                                                  • Figure 34: Menu enticement at coffee shops, by clusters, September 2015
                                                                                                              • Interest in Special Features at Coffee Houses

                                                                                                                • The scope for coffee shops designed for working and studying
                                                                                                                  • Figure 35: The top three most appealing features at coffee houses, September 2015
                                                                                                                  • Figure 36: Interests in special features at coffee houses, by clusters, September 2015
                                                                                                                • Non-mainstream coffee shop users embrace mini-market format
                                                                                                                  • Figure 37: Interests in special features at coffee houses, by clusters, September 2015
                                                                                                                • Leverage ethical and luxury elements for the affluent
                                                                                                                    • Figure 38: Interests in special features at coffee houses, by clusters, September 2015
                                                                                                                • CHAID Analysis

                                                                                                                  • Methodology
                                                                                                                    • Environmentally friendly design soars among culturally sophisticated consumers
                                                                                                                      • Figure 39: Coffee houses – CHAID – Tree output, September 2015
                                                                                                                  • Meet the Mintropolitans

                                                                                                                    • Why Mintropolitans?
                                                                                                                      • Who are they?
                                                                                                                        • Mintropolitans predominantly appreciate relaxation activities in coffee shops
                                                                                                                          • Figure 40: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
                                                                                                                          • Figure 41: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
                                                                                                                          • Figure 42: Occasions of visiting specialist coffee houses in the last six months, By Mintropolitans vs Non-Mintropolitans, April 2015
                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                        • Forecast methodology

                                                                                                                        Companies Covered

                                                                                                                        • Costa
                                                                                                                        • Starbucks Coffee Company UK Ltd

                                                                                                                        Coffee Houses - China - December 2015

                                                                                                                        £3,195.84 (Excl.Tax)