Global capital is bullish on Chinese chain coffee brands and the Chinese coffee market will reach trillions of yuan in 2025.

In the past two years, do you think there are more and more coffee shops around you? No matter where it is, it is not difficult to find coffee shops. According to the data, in 2020, the number of new registrations of coffee shops nationwide will be 22,700, and the coffee market scale will reach 300 billion yuan. By the first 10 months of 2021, the number of new coffee shop registrations nationwide reached 20,900.

The market continues to accelerate expansion, the main reason is that a number of chain coffee brands get capital after crazy expansion of stores! From January to September 2021, there were 21 financing events related to domestic coffee projects, with a total financing amount of more than RMB 4.6 billion yuan. Competition in the coffee industry intensified, and everyone immediately opened the road to brand expansion after getting financing, doubling the number of cafes in an area in a short period of time. With such rapid growth rate, market analysis predicts that the size of China's coffee market will reach 1 trillion yuan by 2025!

Why is the enthusiasm of global capital for China's chain coffee market so high? The main reason is the rapid growth of the domestic freshly ground coffee market. By 2020, the proportion of freshly ground coffee in China's coffee market is only 36.5%, which is a big gap compared with other developed countries, while instant coffee accounts for 52.4% of the coffee market. Since the outbreak of COVID-19, everyone's life and work pressure has also increased, in order to refresh the mind, people's demand for coffee is also increasing. At the same time, with the spread of fine coffee culture, some analysts predict that the proportion of freshly ground coffee in China's coffee market will rise to more than 51% in 2023, while the proportion of instant coffee will drop to less than 40%. It is not difficult to see that China's freshly ground coffee is a very typical consumption upgrading market, and the prospect of future growth is very considerable. If you look at the speed of industry growth, freshly ground coffee is also a fast-growing track.

After the outbreak of COVID-19, global fresh-ground coffee consumption decreased by 16% year-on-year in 2020. According to market analysis, the compound growth rate of global fresh-ground coffee consumption in the next five years will be 5.7%, while the compound growth rate of fresh-ground coffee consumption in China can reach 24.6%. Such rapid growth provides chains in the coffee industry with a very high margin for error and opportunities for overtaking in corners.

At the same time, capital is so favored by China's chain coffee market, mainly because the chain rate of domestic coffee shops is low. By 2020, the chain rate of coffee in China is only 13%, which has a very large room for increase compared with the chain rate of more than 50% in overseas countries. With capital injection, the domestic coffee shop chain rate is expected to reach 18% by 2023.

Secondly, because domestic coffee shops are making too much money. Coffee shops of local chain coffee brands such as Manner and Ruixing are generally smaller in scale. Compared with Starbucks and Costa, the investment in small shops in the early stage is very low, so the recovery of investment does not take too long. Generally, the recovery period is more than half a year, while large shops often take two years. The high return on investment and ultra-short payback period of Chinese chain coffee naturally become the heart of capital gate. Image Source: Internet

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