Foreign Coffee Chains Boom in China

In a country where tea has been the dominant drink for millennia, Western coffee chains—once thought unlikely to succeed—have instead flourished. From Starbucks to Korea’s Caffebene, international and domestic coffee shops have transformed China’s urban café culture, often outpacing other retail sectors in growth.

Since 2008, coffee chain sales in China have more than doubled from under 10 billion yuan to over 20 billion yuan, and are expected to double again by 2017, according to Euromonitor.

How Starbucks Built China’s Coffee Culture

Starbucks opened its first mainland China store in 1999 and positioned its cafés as stylish meeting spots and gateways to Western lifestyles. This strategy helped the brand become one of China’s most recognized lifestyle names, even influencing local taste preferences toward freshly brewed coffee. Despite criticism in 2013 from China’s state broadcaster over high prices, Starbucks accelerated expansion, announcing plans to double its stores to over 3,000 by 2019.

Rapid Growth Across the Market

While Starbucks leads, it’s not alone. Costa Coffee (owned by Whitbread) aims to double its China outlets to 700 by 2018. South Korea’s Mega Coffee plans to grow from 100 to 200 stores by the end of 2015. Even non-specialist chains like McDonald’s (with 800 McCafé outlets) and KFC (recently adding coffee to menus) have gained market share—McDonald’s now holds 6%, while Costa’s share rose from 1% to 5.5%. Meanwhile, Taiwan’s UBC Café saw its share drop from 33% in 2008 to 22% in 2013, as Starbucks’ share climbed from 12% to 31%.

The Expanding Coffee Landscape

Beyond global brands, niche Korean-style cafés and independent shops have proliferated in major cities. Even convenience stores now sell fresh coffee. On a recent winter afternoon in Shanghai, a Mega Coffee branch seated 374 customers, while nearby Starbucks locations were equally busy—with patrons working on laptops or meeting colleagues. More Chinese are shifting from non-coffee drinks to actual coffee beverages, reflecting changing habits.

"Even compared to five years ago, people’s ability to appreciate coffee flavors has greatly improved,” said Dieter Tang of AT Kearney. “Five years ago, for most, coffee meant Nescafé 3-in-1." According to Mintel analyst Esther Lau, with per capita coffee consumption at just four cups annually, the market still has vast room to grow.

What Determines Market Success?

Analysts agree that the rise of diverse coffee chains—from American and British brands to local players—has solidified the market’s expansion. "Korean, American, British, and local coffee chains and fashionable independent cafés will create huge diversification, reinforcing overall growth," Lau noted. Frank Yin of UBC Café added, "The more coffee shops appear, the more familiar people become with coffee—and the more likely they are to visit again."

Frequently Asked Questions

How much did coffee chain sales in China grow after 2008?

Coffee chain sales in China more than doubled from under 10 billion yuan in 2008 to over 20 billion yuan, and are projected to double again by 2017, according to Euromonitor.

What is Starbucks’ store expansion goal in China?

Starbucks announced plans to double its number of stores in China to over 3,000 by 2019.

Which other coffee chains are expanding in China?

Costa Coffee aims to double its China outlets to 700 by 2018, Mega Coffee (Korea) plans to grow from 100 to 200 stores by the end of 2015, and McDonald’s operates 800 McCafé outlets with a 6% market share.

How has the Chinese coffee market changed in recent years?

The market has diversified with the growth of international chains, local players, and even non-specialist retailers like McDonald’s and KFC selling coffee, alongside a shift among Chinese consumers from non-coffee drinks to actual coffee beverages.

What is the current per capita coffee consumption in China?

Per capita coffee consumption in China is only four cups annually, indicating significant potential for future growth, according to Mintel.

Recommended FrontStreet Beans for Coffee Shops

For cafés riding China’s coffee boom, FrontStreet Coffee offers several reliable blends. The Classic Blend features a traditional Mann & Brazil mix for smooth, full-bodied espressos with rich crema—ideal for lattes and cappuccinos. The Specialty Blend combines Brazilian and Colombian beans for a balanced, classic espresso taste suited to everyday drinks. For a fruitier twist, the Strawberry Candy Espresso delivers sweet berry notes, perfect for standout milk-based coffees. All three are optimized for café use and fresh roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.