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Teahouses and Coffeehouses - China - October 2012

“Café chains only really began to appear in China in the late 1990s, and have grown very rapidly in number since, while the tea house sector has struggled to find a response in terms of a successful organised, branded, franchised chain. Yet both sectors remain locked in competition for the higher-end urban consumers who enjoy the cultural cachet of premium cafés and tea houses."

– Matthew Crabbe – Asia-Pacific Research Director


Some questions answered in this report include:

  • How has the recent emergence of cafés and coffee culture impacted the traditional place of tea and tea houses in China?
  • Which companies have been leading the race to develop the café market, and how are they innovating to stay ahead in developing consumer interest?
  • What has been the effect of the emergence of fast food and convenience stores cafés?
  • Which consumer groups are the leading café and tea house chains appealing most to, and who are they missing out?
  • How has the emergence of bubble tea chains affected the markets for both cafés and tea houses?
  • Is the emergence of more fusion food in the wider catering market beginning to influence café and tea house drinks and food menus?
 
Report Description:

Café chains only really began to appear in China in the late 1990s, and have grown very rapidly in number since, while the tea house sector has struggled to find a response in terms of a successful organised, branded, franchised chain. Yet both sectors remain locked in competition for the higher-end urban consumers who enjoy the cultural cachet of premium cafés and tea houses.

Yet the high end is only part of the story, and not only do we already have fast food and convenience store cafés coming in to compete for a younger, lower-income market, there has also been the recent development of the bubble tea phenomenon, with their tea and coffee soft drinks fusion concept.

The leading café chains are looking for fast expansion, while the tea house sector is beginning to see the emergence of significant chains, but the market has to continually adapt and innovate as it grows in order capture the interest of consumers amid competition from independents, as well as other competing foodservice sectors.
 

 

 

Liqueurs - UK - January 2012

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Table of contents

  1. Introduction

      • Definition
        • Provinces of China
        • Executive Summary

            • The market
              • Figure 1: Café and tea house outlets in China, 2007-12 (est.)
              • Figure 2: Café and tea house sales in China, 2007-12 (est.)
            • The forecast
              • Figure 3: Forecast total cafés and tea houses market value, 2007-17
              • Figure 4: Forecast total cafés and tea houses market volume, 2007-17
            • The companies
              • Figure 5: Number of outlets and share of total outlets of leading café chains, 2009-11
            • The issues
              • A competition between cultures and formats
                • Figure 6: Annual growth rate (%) of sales of cafés and tea houses, 2007-12
              • King Kafei’s invasion of Emperor Cha’s domain
                • Figure 7: Factors ranked first determining choice of which café to visit, August 2012
              • Traditional tea houses target the high-end market
                • Figure 8: Frequency of visiting tea houses, by gender and age group, August 2012
              • Bubble tea woos China’s youth
                • Figure 9: Number of followers of selected bubble tea chains on Chinese social networking sites, September 2012
              • The future is moving towards fusion
                • Figure 10: Attitudes towards full-service restaurant, August 2012
              • What we think
              • A Competition Between Cultures and Formats

                • Key issues
                  • How coffee arrived in the “Land of Tea”
                    • Coffee with Chinese characteristics
                        • Figure 11: Coffee and tea packaged retail sales value and volume, 2008-12 (est.)
                      • The significance of the tea house in Chinese culture
                        • The rise of competition from cafés
                          • Figure 12: Café and tea house outlets in China, 2007-12 (est.)
                          • Figure 13: Estimated number of tea house outlets, by region, 2010
                        • Both cafés and tea houses increasingly compete with other foodservice formats
                          • Figure 14: Frequency of visiting out-of-home dining outlets, by type, August 2012
                          • Figure 15: Frequency of visiting cafés and tea houses, by city, August 2012
                          • Figure 16: Frequency of visiting foreign and domestic fast food outlets, by city, August 2012
                        • Fast food competes on price over image
                          • Figure 17: Frequency of visiting outlets at least once a week, by outlet type and city, August 2012
                          • Figure 18: Beverages consumed in foreign fast food restaurants, March 2012
                          • Figure 19: Consumer attitudes towards café/tea house service quality, August 2012
                        • Convenience stores increasingly compete with coffee and tea service in the major cities
                            • Figure 20: Convenience store average transactions per day, by store size, 2007-11
                            • Figure 21: Frequency of eating at restaurants, by outlet type, by gender and age group, August 2012
                            • Figure 22: Frequency of eating at restaurants, by outlet type, by income group, August 2012
                          • Rising eating out trend spurs breakfast market
                            • Figure 23: Time of day of eating in or having takeaway at fast food restaurants, March 2012
                            • Figure 24: Time of day of eating in or having takeaway at cafés and tea houses, August 2012
                            • Figure 25: Reasons for visiting cafés or tea houses, August 2012
                            • Figure 26: Time of day of eating or having takeaway at cafés, by gender and age group, August 2012
                            • Figure 27: Time of day of eating or having takeaway at tea houses, by gender and age group, August 2012
                          • What it means
                          • King Kafei’s Invasion of Emperor Cha’s Domain

                            • Key issues
                              • Starbucks and the Taiwanese chains led the entry of café culture into China
                                • Figure 28: Starbucks outlets, by region, August 2012
                                • Figure 29: Starbucks outlets, mapped by region, August 2012
                                • Figure 30: Cafés visited in the past 12 months, by city, August 2012
                              • The Taiwanese coffee tsunami
                                • Figure 31: Factors ranked first determining choice of which café to visit, August 2012
                                • Figure 32: Consumer attitudes towards café/tea house service quality, August 2012
                              • Starbucks looks to innovation to create more consumer interest
                                • C.Straits: Zhejiang’s take on the Taiwan Café
                                  • Other chains join the rush to fill the café market
                                    • Figure 33: Number of outlets and share of total outlets of leading café chains, 2009-11
                                    • Figure 34: Growth in number of cafés outlets of leading chains, 2009-11
                                  • McCafé enters the fray
                                      • Figure 35: Cafés visited in the past 12 months, August 2012
                                    • Other recent market entrants: too much like Starbucks?
                                      • Pacific Coffee (太平洋咖啡)
                                        • Figure 36: Cafés visited in the past 12 months, by gender and age group, August 2012
                                      • Coffee bean & tea leaf
                                        • Costa Coffee enters China in rapid expansion
                                            • Figure 37: Cafés visited in the past 12 months, by household income group, August 2012
                                          • Developing the idea of the bakery café
                                            • 85oC (85度C)
                                              • Paris Baguette (巴黎贝甜)
                                                • Cafés only beginning to target lower-income and youth markets
                                                  • Figure 38: Frequency of eating at cafés, by age and gender, August 2012
                                                  • Figure 39: Consumer attitudes towards cafés as a reflection of lifestyle, August 2012
                                                  • Figure 40: Frequency of eating at cafés, by personal income group, August 2012
                                                • Independents remain focused on high-earning Chinese urbanites
                                                  • Cafés offer different incentives to draw back customers
                                                    • Figure 41: Consumer attitudes towards café special offers and online marketing, August 2012
                                                  • Cafés employ new methods of advertising
                                                      • Figure 42: Number of followers of café companies on Chinese social networking sites, September 2012
                                                    • What it means
                                                    • Traditional Tea Houses Target the High-end Market

                                                      • Key issues
                                                        • New “traditional” tea houses emerge targeting a high-end market
                                                          • Figure 43: Total café, tea house, fast food and restaurant outlets in China, 2007-12 (est.)
                                                          • Figure 44: Frequency of visiting out-of-home dining outlets, by type, August 2012
                                                          • Figure 45: Frequency of visiting tea houses, by gender and age group, August 2012
                                                          • Figure 46: Reasons for visiting tea houses, August 2012
                                                          • Figure 47: Frequency of visiting tea houses, by personal income group, August 2012
                                                          • Figure 48: Tea houses visited in the past 12 months, August 2012
                                                        • There’s a time and a place for the tea house
                                                          • Figure 49: Estimated number of tea house outlets, by region, 2010
                                                          • Figure 50: Frequency of visiting tea houses, by region, August 2012
                                                          • Figure 51: Typical time of day consumers visit a café or tea house, August 2012
                                                          • Figure 52: Reasons for visiting cafés or tea houses, August 2012
                                                          • Figure 53: Consumer attitudes towards café/tea house service quality, August 2012
                                                        • Premiumisation through fine dining and tea connoisseurship
                                                          • Figure 54: Factors determining choice of which tea house to visit, August 2012
                                                          • Figure 55: Food and beverage quality factors ranked first determining choice of which tea house to visit, by region, August 2012
                                                        • Tea house focus on tradition begins to see differentiation
                                                          • Starbucks turns to Chinese tea, challenging traditional tea houses
                                                            • Empereur Teahouse (华祥苑) Shanghai targets high-end consumers
                                                              • Chamate (一茶一坐) develops a mid- to high-end tea house chain
                                                                • Figure 56: Chamate tea house chain stores, by city, September 2012
                                                                • Figure 57: Chamate tea house Shanghai drinks menu, September 2012
                                                              • Whittard’s of Chelsea brings the European tea house concept to China
                                                                • Tea houses reach out to consumers through social networks
                                                                  • Figure 58: Number of followers of tea house companies on Chinese social networking sites, September 2012
                                                                • What it means
                                                                • Bubble Tea Woos China’s Youth

                                                                  • Key issues
                                                                    • Is the future of Chinese youth tea drinkers through the lens of a bubble?
                                                                      • RBT and Happy Lemon challenge cafés by targeting the youth market
                                                                          • Figure 59: RBT outlets, by province, September 2012
                                                                          • Figure 60: Happy Lemon outlets, by city, September 2012
                                                                          • Figure 61: Number of followers of selected bubble tea chains on Chinese social networking sites, September 2012)
                                                                          • Figure 62: RBT drinks menu, September 2012
                                                                        • Chatime brings bubble tea competition and other new concepts
                                                                          • Figure 63: Chatime China outlets, September 2012
                                                                          • Figure 64: Reasons for visiting tea houses or cafés, among 20-29-year-olds, August 2012
                                                                        • What it means
                                                                        • The Future is Moving Towards Fusion

                                                                          • Key issues
                                                                            • Cafés are selling more tea, and tea houses are beginning to sell coffee
                                                                              • Figure 65: 850C drinks menu, September 2012
                                                                            • The emphasis on cuisines in cafés compared with tea houses
                                                                                • Figure 66: Types of food typically eaten at cafés, August 2012
                                                                                • Figure 67: Types of food typically eaten at tea houses, August 2012
                                                                              • Evidence of more fusion food in fast food outlets
                                                                                • Figure 68: Attitudes towards full-service restaurant, August 2012
                                                                                • Figure 69: Attitudes towards restaurants offering fusion food, by gender and income group, August 2012
                                                                              • What it means
                                                                              • The Future of the Market

                                                                                  • Figure 70: Forecast total cafés and tea houses market value, 2007-17
                                                                                  • Figure 71: Forecast total number of outlets in the cafés and tea houses market, 2007-17
                                                                              • Frequency of Eating at Restaurants

                                                                                  • Figure 72: Frequency of eating at restaurants, August 2012
                                                                                  • Figure 73: Frequency of eating at restaurants, August 2012
                                                                                  • Figure 74: Most popular frequency of eating at foreign fast food restaurant, by demographics, August 2012
                                                                                  • Figure 75: Next most popular frequency of eating at foreign fast food restaurant, by demographics, August 2012
                                                                                  • Figure 76: Most popular frequency of eating at Chinese fast food restaurant, by demographics, August 2012
                                                                                  • Figure 77: Next most popular frequency of eating at Chinese fast food restaurant, by demographics, August 2012
                                                                                  • Figure 78: Most popular frequency of eating at foreign fine dining restaurant, by demographics, August 2012
                                                                                  • Figure 79: Next most popular frequency of eating at foreign fine dining restaurant, by demographics, August 2012
                                                                                  • Figure 80: Most popular frequency of eating at Chinese fine dining restaurant, by demographics, August 2012
                                                                                  • Figure 81: Next most popular frequency of eating at Chinese fine dining restaurant, by demographics, August 2012
                                                                                  • Figure 82: Most popular frequency of eating at casual dining restaurant, by demographics, August 2012
                                                                                  • Figure 83: Next most popular frequency of eating at casual dining restaurant, by demographics, August 2012
                                                                                  • Figure 84: Most popular frequency of eating at Buffet restaurant, by demographics, August 2012
                                                                                  • Figure 85: Next most popular frequency of eating at Buffet restaurant, by demographics, August 2012
                                                                                  • Figure 86: Most popular frequency of eating at coffee shop, by demographics, August 2012
                                                                                  • Figure 87: Next most popular frequency of eating at coffee shop, by demographics, August 2012
                                                                                  • Figure 88: Most popular frequency of eating at Teahouse, by demographics, August 2012
                                                                                  • Figure 89: Next most popular frequency of eating at Teahouse, by demographics, August 2012
                                                                                  • Figure 90: Most popular frequency of eating at Theme restaurant, by demographics, August 2012
                                                                                  • Figure 91: Next most popular frequency of eating at Theme restaurant, by demographics, August 2012
                                                                                  • Figure 92: Most popular frequency of eating at hot pot restaurant, by demographics, August 2012
                                                                                  • Figure 93: Next most popular frequency of eating at hot pot restaurant, by demographics, August 2012
                                                                                  • Figure 94: Most popular frequency of eating at tea restaurant, by demographics, August 2012
                                                                                  • Figure 95: Next most popular frequency of eating at tea restaurant, by demographics, August 2012
                                                                                  • Figure 96: Most popular frequency of eating at cafeteria, by demographics, August 2012
                                                                                  • Figure 97: Next most popular frequency of eating at Cafeteria, by demographics, August 2012
                                                                                  • Figure 98: Most popular frequency of eating at food court, by demographics, August 2012
                                                                                  • Figure 99: Next most popular frequency of eating at food court, by demographics, August 2012
                                                                                  • Figure 100: Most popular frequency of eating at food stall, by demographics, August 2012
                                                                                  • Figure 101: Next most popular frequency of eating at food stall, by demographics, August 2012
                                                                                  • Figure 102: Most popular frequency of eating at Sidewalk, by demographics, August 2012
                                                                                  • Figure 103: Next most popular frequency of eating at Sidewalk, by demographics, August 2012
                                                                                  • Figure 104: Most popular frequency of eating at convenience store, by demographics, August 2012
                                                                                  • Figure 105: Next most popular frequency of eating at convenience store, by demographics, August 2012
                                                                                  • Figure 106: Most popular frequency of eating at other restaurants, by demographics, August 2012
                                                                                  • Figure 107: Next most popular frequency of eating at other restaurants, by demographics, August 2012
                                                                              • Coffee Shops Visited in the Past 12 Months

                                                                                  • Figure 108: Coffee shops visited in the past 12 months, August 2012
                                                                                  • Figure 109: Most popular coffee shops visited in the past 12 months, by demographics, August 2012
                                                                                  • Figure 110: Next most popular coffee shops visited in the past 12 months, by demographics, August 2012
                                                                                  • Figure 111: Other coffee shops visited in the past 12 months, by demographics, August 2012
                                                                              • Number of Coffee Shops Visited

                                                                                  • Figure 112: Number of coffee shops visited in the past 12 months, August 2012
                                                                                  • Figure 113: Number of coffee shops visited in the past 12 months, by demographics, August 2012
                                                                              • Tea Houses Visited in the Past 12 Months

                                                                                  • Figure 114: Tea houses visited in the past 12 months, August 2012
                                                                                  • Figure 115: Tea houses visited in the past 12 months, by demographics, August 2012
                                                                              • Typical Time of Day Consumers Visit a Café or Teahouse

                                                                                  • Figure 116: Typical time of day consumers visit a café or teahouse, August 2012
                                                                                  • Figure 117: Most popular typical time of day consumers visit a café house, by demographics, August 2012
                                                                                  • Figure 118: Next most popular typical time of day consumers visit a café house, by demographics, August 2012
                                                                                  • Figure 119: Most popular typical time of day consumers visit a teahouse, by demographics, August 2012
                                                                                  • Figure 120: Next most popular typical time of day consumers visit a teahouse, by demographics, August 2012
                                                                              • Reasons for Visiting Coffee Shops

                                                                                  • Figure 121: Reasons for visiting coffee shops, August 2012
                                                                                  • Figure 122: Most popular reasons for visiting coffee shops, by demographics, August 2012
                                                                                  • Figure 123: Next most popular reasons for visiting coffee shops, by demographics, August 2012
                                                                                  • Figure 124: Other reasons for visiting coffee shops, by demographics, August 2012
                                                                              • Reasons for Visiting Tea Houses

                                                                                  • Figure 125: Reasons for visiting tea houses, August 2012
                                                                                  • Figure 126: Most popular reasons for visiting tea houses, by demographics, August 2012
                                                                                  • Figure 127: Next most popular reasons for visiting tea houses, by demographics, August 2012
                                                                                  • Figure 128: Other reasons for visiting tea houses, by demographics, August 2012
                                                                              • Factors Determining Choice of Which Café to Visit

                                                                                  • Figure 129: Factors determining choice of which café to visit, August 2012
                                                                                  • Figure 130: Most popular top ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                                  • Figure 131: Next most popular top ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                                  • Figure 132: Most popular second ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                                  • Figure 133: Next most popular second ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                                  • Figure 134: Most popular third ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                                  • Figure 135: Next most popular third ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                                  • Figure 136: Other third ranked factors determining choice of which café to visit, by demographics, August 2012
                                                                              • Factors Determining Choice of Which Teahouse to Visit

                                                                                  • Figure 137: Factors determining choice of which teahouse to visit, August 2012
                                                                                  • Figure 138: Most popular top ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                                  • Figure 139: Next most popular top ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                                  • Figure 140: Most popular second ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                                  • Figure 141: Next most popular second ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                                  • Figure 142: Most popular third ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                                  • Figure 143: Next most popular third ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                                  • Figure 144: Other third ranked factors determining choice of which teahouse to visit, by demographics, August 2012
                                                                              • Types of Food Typically Eaten at Coffee Shops

                                                                                  • Figure 145: Types of food typically eaten at coffee shops, August 2012
                                                                                  • Figure 146: Most popular types of main dish typically eaten at coffee shops, by demographics, August 2012
                                                                                  • Figure 147: Next most popular types of main dish typically eaten at coffee shops, by demographics, August 2012
                                                                                  • Figure 148: Types of snacks and dessert typically eaten at coffee shops, by demographics, August 2012
                                                                                  • Figure 149: Types of drinks typically taken at coffee shops, by demographics, August 2012
                                                                              • Types of Food Typically Eaten at Teahouses

                                                                                  • Figure 150: Types of food typically eaten teahouses, August 2012
                                                                                  • Figure 151: Types of main dish, snacks, dessert typically eaten teahouses, by demographics, August 2012
                                                                                  • Figure 152: Most popular types of drinks typically taken teahouses, by demographics, August 2012
                                                                                  • Figure 153: Next most popular types of drinks typically taken teahouses, by demographics, August 2012
                                                                              • Consumer Attitudes Towards Coffee Shops and Teahouses

                                                                                  • Figure 154: Consumer attitudes to café/teahouse service quality, August 2012
                                                                                  • Figure 155: Agreement with the statements ‘I prefer to dine in a coffeehouse/teahouse with unique decoration’ and ‘I prefer coffeehouse/teahouse with Wi-Fi Internet connections over those who haven't’, by demographics, August 2012
                                                                                  • Figure 156: Agreement with the statements ‘I believe the atmosphere in coffeehouse is more suitable for young people’ and ‘I believe drinking coffee in coffeehouses is only a reflection of an urban lifestyle’, by demographics, August 2012
                                                                                  • Figure 157: Agreement with the statements ‘I prefer to go to coffeehouses/teahouses than fast food restaurants’ and ‘I believe coffeehouse/teahouse serves better coffee/tea than making them myself’, by demographics, August 2012
                                                                                  • Figure 158: Agreement with the statements ‘I am interested in connecting to my favourite coffeehouse/teahouse through social networking sites’ and ‘I tend to drink tea at home but tend to go to coffeehouse more often when I am outside’, by demographics, August 2012
                                                                                  • Figure 159: Agreement with the statements ‘Independent coffee shops serve better coffee than chain coffeehouses’ and ‘I regularly use coupons when dining at coffeehouse/teahouse’, by demographics, August 2012
                                                                                  • Figure 160: Agreement with the statements ‘I like to linger in coffeehouses/teahouses for hours and hours by only spending the minimum eg the cheapest drink’ and ‘I feel drinking tea is more refreshing than drinking coffee’, by demographics, August 2012
                                                                                  • Figure 161: Agreement with the statements ‘I believe tea houses are meeting places for middle/old – Aged people’ and ‘I feel tea houses offer a better environment to coffee shops’, by demographics, August 2012
                                                                                  • Figure 162: Most popular consumer attitudes to café/teahouse service quality (any agree), by demographics, August 2012
                                                                                  • Figure 163: Next most popular consumer attitudes to café/teahouse service quality (any agree), by demographics, August 2012
                                                                                  • Figure 164: Other consumer attitudes to café/teahouse service quality (any agree), by demographics, August 2012

                                                                              Companies Covered

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                                                                              Teahouses and Coffeehouses - China - October 2012

                                                                              £3,195.84 (Excl.Tax)