Chinese people often go to convenience stores to sell coffee, and foreign countries report that the pace of domestic coffee craze is accelerating.

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China's coffee boom has accelerated consumption growth of 25% last year.

According to Mintel, China's internal coffee market was worth 64.7 billion yuan ($9.6 billion) last year, up 7.5% from a year earlier, when the growth rate was 6%. The annual growth rate is expected to return to 6% from this year to 2023.

However, while value-by-value sales are booming, Mintel estimates that the number of internal cafes has fallen by 2 per cent as the number of new stores has fallen. But that's half the decline a year ago.

"like many industries in China, the internal coffee market is not immune to the new retail industry," said Belle Wang, a food and beverage research analyst at Mintel.

The rapid expansion of the new retail coffee business across the country has stimulated consumers to consume more coffee, resulting in strong sales. With the growing momentum of new retail coffee shops and more and more international and domestic brands entering the market, today's consumers have more choices in coffee. As a result, the industry will achieve positive growth over the next two years.

"however, this growth will slow, mainly due to the traditional tea drinking behavior of Chinese consumers and the country's booming tea shops," Wang said.

Mintel expects sales to grow positively over the next two years, up 0.6% year-on-year last year, and another 1.2% between this year and this year, reaching 74000 cafes by 2020.

Convenience and tradition

When it comes to choosing where to dispose of their caffeine, today more Chinese consumers buy coffee from convenience stores rather than traditional coffee chains. Mintel research shows that 52 per cent of Chinese consumers (a sample of 3000 people) buy coffee at convenience stores, while only 44 per cent buy coffee from traditional coffee chains.

About 23% of consumers drink in-house coffee at least once a month, which is already done in new retail cafes.

Our research shows that more in-house coffee users get coffee from convenience stores rather than traditional chain cafes. This may be because Chinese consumers associate convenience stores with a variety of breakfast options. Convenience stores are also seen as easy to access and more affordable. Given this rising trend, other coffee suppliers can introduce unique features, such as providing a variety of food and coffee pairs to compete, "Wang said."

Although new retail coffee is currently experiencing a lot of growth, consumer participation is still low-in part because they are still relatively new. However, the new retail cafes have the opportunity to catch up with popularity by offering positive discounts and delivery services. "

In other words, a large discount is not enough, because a discount is neither the best strategy for a long-term business plan nor a sustainable strategy. There need to be other advantages, such as offering healthy mash-up offers, "Bell added."

Latte is the first choice.

Mintel's research reveals the most popular coffee drink in China's coffee boom. More than half of local coffee consumers ordered lattes (54%) or cappuccinos (52%). This was followed by mocha coffee (45%), American coffee (38%), flavor coffee (36%), espresso (26%) and cold coffee (23%).

A relatively new concept in the Chinese coffee boom is that coffee is mixed with plant protein milk, with 22% of internal coffee users ordering coffee.

Lattes and cappuccinos are the most popular drinks in cafes because of their creamy texture and rich dairy taste. In addition, because they are usually widely used, they are often the first step in coffee appreciation, "Wang said."

"once consumers fully appreciate these basic drinks, they are more likely to try non-milk drinks, such as American coffee or cold coffee. However, providing only basic coffee options makes it difficult to stand out in the homogeneous coffee market and attract more coffee consumers.

"as a result, cafes can draw inspiration from teahouse drinks to make their products more visually attractive and can be" eye-catching "to attract attention and interest," Bell concluded.

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