{"id":23217,"date":"2025-11-09T21:33:04","date_gmt":"2025-11-09T13:33:04","guid":{"rendered":"https:\/\/daxueconsulting.com\/?p=23217"},"modified":"2025-11-11T15:43:00","modified_gmt":"2025-11-11T07:43:00","slug":"coffee-in-china","status":"publish","type":"post","link":"https:\/\/daxueconsulting.com\/coffee-in-china\/","title":{"rendered":"How emerging-tier city consumers drive growth in China\u2019s coffee market"},"content":{"rendered":"\n<p>Despite having only truly begun in the 1980s, China\u2019s coffee market has expanded rapidly over the course of the past two decades, thanks to a combination of government investment and a shift in consumer behavior. Coffee is no longer a drink for the \u201celites\u201d or for white-collar workers, but a daily lifestyle beverage increasingly integrated into the lives of Chinese people. Its presence is spreading beyond just tier-1 cities like Shanghai and Beijing into lower-tier cities, raising the need for brands to shift their expansion strategies.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Download our China emerging-tier cities report<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-28f84493 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"450\" src=\"https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/Emerging-tier-cities-economy-by-daxue-consulting-800x450.png\" alt=\"consumers of China's emerging-tier cities\" class=\"wp-image-63931\" srcset=\"https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/Emerging-tier-cities-economy-by-daxue-consulting-800x450.png 800w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/Emerging-tier-cities-economy-by-daxue-consulting-300x169.png 300w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/Emerging-tier-cities-economy-by-daxue-consulting-768x432.png 768w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/Emerging-tier-cities-economy-by-daxue-consulting.png 1280w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<script charset=\"utf-8\" type=\"text\/javascript\" src=\"\/\/js.hsforms.net\/forms\/embed\/v2.js\"><\/script>\n<script>\n  hbspt.forms.create({\n    portalId: \"21091266\",\n    formId: \"3c2e7d13-550e-4bfd-ae6f-11241ff742c0\",\n    region: \"na1\"\n  });\n<\/script>\n<\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Fresh-ground coffee sales fueling China\u2019s coffee market growth<\/h2>\n\n\n\n<p>From 2021 to 2025, the retail sales value of the fresh-ground category within the Chinese coffee market has more than doubled, from <a href=\"https:\/\/zhuanlan.zhihu.com\/p\/1946176354564408764\">RMB 42 billion<\/a> in 2021 to RMB 107 billion in 2024. It is projected to reach 127 billion in 2025, indicating a continuously expanding market without signs of slowing down.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img decoding=\"async\" width=\"1472\" height=\"1046\" data-src=\"https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-fresh-ground-coffee-retail-sales-2021-2025.png\" alt=\"China's coffee market\" class=\"wp-image-63925 lazyload\" style=\"--smush-placeholder-width: 1472px; --smush-placeholder-aspect-ratio: 1472\/1046;width:596px;height:auto\" data-srcset=\"https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-fresh-ground-coffee-retail-sales-2021-2025.png 1472w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-fresh-ground-coffee-retail-sales-2021-2025-300x213.png 300w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-fresh-ground-coffee-retail-sales-2021-2025-800x568.png 800w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-fresh-ground-coffee-retail-sales-2021-2025-768x546.png 768w\" data-sizes=\"(max-width: 1472px) 100vw, 1472px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><figcaption class=\"wp-element-caption\">Data source: Euromonitor, designed by Daxue Consulting, Chinese fresh-ground coffee retail sales value from 2021 to 2025E<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">China\u2019s unique pricing model driving low-cost, high-volume competition<\/h3>\n\n\n\n<p>The primary business strategy of Chinese coffee companies continues to be growth-oriented rather than profit-oriented, as China\u2019s per capita coffee consumption in 2024 was around <a href=\"https:\/\/www.gcrmag.com\/the-future-of-the-chinese-coffee-market\/\">0.15 kilograms<\/a> compared to the world\u2019s 1.36 kilograms. Such rapid expansion of the coffee market is ultimately enabled by hyper-competitive pricing strategies of domestic coffee brands, including Luckin Coffee and Cotti. Deep app-only discounts, with frequent promos going as low as RMB 9.9 or even RMB 0.9, put increasing pressure on international brands such as Starbucks to compress margins. Brands must adhere to the low-cost, high-volume business model to survive the price wars in the Chinese coffee market.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img decoding=\"async\" width=\"422\" height=\"456\" data-src=\"https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-luckin-coffee-deal-1.png\" alt=\"China's coffee market\" class=\"wp-image-63928 lazyload\" style=\"--smush-placeholder-width: 422px; --smush-placeholder-aspect-ratio: 422\/456;width:368px;height:auto\" data-srcset=\"https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-luckin-coffee-deal-1.png 422w, https:\/\/daxueconsulting.com\/wp-content\/uploads\/2023\/01\/daxue-consulting-chinas-coffee-market-luckin-coffee-deal-1-278x300.png 278w\" data-sizes=\"(max-width: 422px) 100vw, 422px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><figcaption class=\"wp-element-caption\"><em>Source: Luckin Coffee WeChat Mini Program, RMB 9.9 online deal<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">The duality of coffee\u2019s role in Chinese life<\/h2>\n\n\n\n<p>With much of the Chinese coffee market comprising of young professionals, coffee now occupies a functional role in the lifestyle of Chinese consumers. Beyond fueling the country\u2019s 996 work culture, it also plays a role in the younger generation\u2019s increasing focus on a more relaxing and fulfilling life. Many consumers explore new and trendy caf\u00e9s as part of the caf\u00e9 check-in (\u5496\u5561\u6253\u5361) trend and outdoor coffee (\u6237\u5916\u5496\u5561), while also enjoying home-brewed coffee experiences.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Lower-tier city consumers as the next growth engine of China\u2019s coffee market<\/h3>\n\n\n\n<p>As government policy has increasingly pushed for investment in travel infrastructure and structural development for a more cohesive China, <a href=\"https:\/\/daxueconsulting.com\/2025-china-emerging-tier-market-report\/\">emerging-tier cities<\/a> stand out as significant places for market expansion. Among the most discussed topics in emerging tier city forums are \u201ccoffee shop\u201d, \u201ctea beverage\u201d, and \u201cLuckin Coffee\u201d, indicative of a recent trend towards freshly made drinks. According to our <a href=\"https:\/\/daxueconsulting.com\/coffee-and-milk-tea\/\">2025 China emerging-market report<\/a>, lower-tier city coffee markets are largely in their infancy compared to higher-tier cities. Consumers resultingly gravitate towards well-known drinks from budget-friendly chains such as <a href=\"https:\/\/daxueconsulting.com\/chinese-beverage-brand-mixue\/\">Mixue<\/a> and <a href=\"https:\/\/daxueconsulting.com\/coffee-market-china-luckin-coffee\/\">Luckin Coffee<\/a> as opposed to committing more money towards specialty niche drinks.<\/p>\n\n\n\n<p>&nbsp;With double the leisure time of those in high-tier cities, greater trust in Chinese brands compared to foreign competitors, and a preference for pragmatism and functionality, lower-tier city consumers have markedly different priorities compared to those in higher-tier cities. Despite having disposable incomes comparable to those of high-tier city consumers, low-tier city consumers are significantly more price-sensitive and are less inclined to purchase simply because of brand loyalty. Additionally, the pragmatism of these consumers translates to a lesser influence of status as a motivator behind purchasing behavior.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Convenience driving China\u2019s coffee capsule market<\/h2>\n\n\n\n<p>In the Chinese coffee market, fresh-brewed coffee accounts for the majority of the market growth, despite being more expensive and lower in volume compared to instant capsule options. However, China\u2019s coffee capsule market is growing rapidly as young professionals seek convenience, consistent quality, and value for money. This shift is also driven by demand for larger cup sizes. <a href=\"https:\/\/en.people.cn\/n3\/2024\/1119\/c90000-20244197.html?utm\">93%<\/a> of Chinese consumers prefer a cup of coffee larger than 200 ml to start their day.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Growth in espresso machines reflecting a quality-driven market<\/h2>\n\n\n\n<p>In the <a href=\"https:\/\/daxueconsulting.com\/growing-awareness-of-coffee-is-transforming-the-coffee-machine-market-in-china\/\">coffee machine market in China<\/a>, sophisticated consumers drive high-value espresso machine sales online, prioritizing craft and quality. Capsule machines, meanwhile, remain the leading value-for-money option. The strong performance of espresso machines indicates that Chinese consumers are committed to the craft. They enjoy the process of selecting coffee beans, grinding them, and crafting a beverage, and they are willing to invest in high-quality, caf\u00e9-level results at home or in the office.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key findings on the Chinese coffee market:<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Coffee has evolved from a niche \u201celite\u201d drink into a daily lifestyle beverage. It is being consumed by people beyond just first-tier cities. Those in lower-tier cities are integrating coffee into their lifestyles.<\/li>\n\n\n\n<li>The need for competitively priced and culturally relevant drinks has led to pricing wars between top coffee chains. Brands like Luckin Coffee are adopting high-volume, low-margin models to gain more market share.<\/li>\n\n\n\n<li>There\u2019s growing attention in emerging-tier cities as key markets for increased expansion.<\/li>\n\n\n\n<li>A different strategy is required for targeting consumers from lower-tier cities compared to those from higher-tier cities. Spending habits in lower-tier cities are characterized by a higher emphasis on price sensitivity, regional pride, and pragmatism.<\/li>\n\n\n\n<li>Capsule machines appeal to young professionals who value convenience, while demand for espresso machines shows growing sophistication.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Despite having only truly begun in the 1980s, China\u2019s coffee market has expanded rapidly over the course of the past two decades, thanks to a combination of government investment and a shift in consumer behavior. Coffee is no longer a drink for the \u201celites\u201d or for white-collar workers, but a daily lifestyle beverage increasingly integrated [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":63932,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"episode_type":"","audio_file":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","date_recorded":"","explicit":"","block":"","filesize_raw":"","footnotes":""},"categories":[998],"tags":[4316,1515,1743,3381,1732,1744],"daxue_industry":[16578],"class_list":["post-23217","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-coffee-shops-in-china","tag-chinese-coffee-consumption","tag-coffee-china","tag-coffee-consumption-china","tag-coffee-in-china","tag-coffee-market-china","tag-coffee-shop-in-china","daxue_industry-food-and-beverages"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - 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