Pacific Coffee VS Starbucks: relying on China Resources Vanguard has many advantages

Pacific Coffee is working hard to expand its domestic market, and their dream is to open 1000 stores.

Just recently, Pacific Coffee Beijing International Trade Store officially opened to the public, its 13th direct store since it opened its first mainland coffee chain in Shanghai in April this year.

Obviously, the actual number of Pacific Coffee stores is still a long way from the dream of 1000.

This coffee brand from Hong Kong has changed hands several times since it was founded in 1992. Chevalier Pan Asia Holdings Limited bought it for HK $205 million in 2005. In 2010, China Resources Venture bought an 80 per cent stake in Pacific Coffee from Chevalier Fanya for HK $327 million in cash and handed it over to its wholly-owned subsidiary, China Resources Wanjia.

"the company plans to expand the number of mainland stores to 50 by the end of this year." Tang Guojiang, chief executive of Pacific Coffee, revealed the company's expansion plans for Pacific Coffee's expansion in the mainland. Tang Guojiang acted excitedly and cautiously.

Tang Guojiang admitted that at present, the expansion of Pacific Coffee is mainly in Beijing, Shanghai, Guangzhou and Shenzhen. Starbucks in these cities is already highly competitive, and the cost of opening stores in the mainland is rising sharply as rent, raw materials and labor costs rise.

However, Tang Guojiang is optimistic that Pacific Coffee, which is backed by China Resources Wanjia, has more convenient government relations, market resources, logistics and distribution advantages than Starbucks, which can help Pacific Coffee rapidly increase its market share in the mainland.

Fashion consumption

Maybe China's coffee market is not as good as operators think. After all, coffee is just a fashion consumption for Chinese people.

Like wine, coffee is a Western concept for most Chinese consumers, and drinking coffee is considered cultured. Especially in the eyes of Chinese people in big cities, coffee is a manifestation of their desire for a lifestyle, and more and more young people in the workplace are choosing to start their day with one or two cups of coffee.

The Chinese coffee market is basically divided into two categories: drinking instant at home and drinking in stores. Few people make coffee from coffee beans at home. A specially prepared cup of coffee in the store can be sold for 45 yuan, which is not a small expense for many Chinese.

Although it is a bit extravagant for Chinese enthusiasts to drink coffee in coffee shops, coffee shops are gradually becoming a part of the daily life of urban youth and urban newly rich. The scene of ordering a steaming espresso in a coffee shop, or meeting friends, working or surfing the Internet, has become a strong fashion symbol and is popular.

In the eyes of most Chinese, coffee is not only a drink, but also an emotional and cultural experience. Coffee consumers generally believe that enjoying the external space of coffee is as important as drinking coffee itself.

Similar emotions prop up the dreams of coffee promoters.

The temptation of the market

The specific data recalled the dream to reality. According to data provided by the Beijing International Coffee Industry Association and the China International Trade Center, China's coffee consumption is growing at an annual rate of about 15%, while world coffee consumption is growing at an annual rate of only 2%. Another statistic shows that China's per capita coffee consumption has been increasing at a rate of 30% year by year since 1998.

(responsible Editor: Leo)