How Doggies Café Brand Entered China’s Coffee Market

When you think of Chinese food heritage, steamed buns come to mind—but not espresso. Yet in 2015, one of China’s oldest restaurant brands, Goubuli, famous for its century-old baozi, announced it had taken over the Chinese operations of Australia’s biggest coffee chain. Why would a bao-maker dive into the hyper-competitive coffee business? The answer reveals how far legacy brands will go to diversify—and how tough it is to break into China’s third-wave coffee scene.

In short: Yes, Goubuli (through its parent company) did secure permanent rights to operate Gloria Jean’s Coffees in China, paying AUD 6 million (RMB 30.63 million) in franchise fees. But running a successful coffee chain in China meant going far beyond buns—it meant building from scratch in a market dominated by Starbucks and local players.

Goubuli’s Big Coffee Move

In January 2015, Tianjin-based Goubuli Group—founded over 150 years ago and known for its traditional Chinese steamed buns—acquired the permanent rights to operate Gloria Jean’s Coffees in China. This meant Goubuli, through its subsidiary Tianjin Senyongtai Catering Co., became the sole owner of the Australian brand’s operations in the country. The deal gave Goubuli control over more than 1,000 Gloria Jean’s outlets globally, with an immediate presence in cities like Shanghai and Tianjin.

The agreement followed nearly two years of negotiation, including ten trips abroad and five negotiation breakdowns. By Christmas 2014, Goubuli had signed an intellectual property licensing deal. Under the partnership, Gloria Jean’s Coffee International Ltd.’s parent company, Retail Food Group, formed a joint venture with Goubuli’s subsidiary. Goubuli holds 80% equity, while the Australian side retains 20%. The RMB 30.63 million franchise fee was paid in full.

Why Coffee? Goubuli’s Diversification Strategy

Goubuli’s chairman, Zhang Yansen, then 56, saw an opportunity where others saw risk. During an overseas trip years earlier, he noticed how imported coffee beans drove up prices, turning ordinary foreign coffee brands into premium products in China. That insight led him to believe there was room for a different kind of coffee business. Zhang stated that entering the coffee market was part of the group’s strategy for diversified growth, with profits helping to support the legacy bun business.

Zhang made it clear: Goubuli would not run Gloria Jean’s the way it ran baozi shops. The coffee chain would operate independently. Still, industry watchers questioned whether a latecomer could survive against established giants like Starbucks, Costa Coffee, Seattle Coffee, and homegrown players like Garage Café.

Gloria Jean’s in China: Expansion Plans and Challenges

Founded in 1979, Gloria Jean’s had grown into Australia’s largest specialty coffee retailer, with over 1,000 stores across 42 countries. By 2015, it already had a foothold in China with more than ten locations. The brand planned to open 20 more stores that year alone, aiming for 200 locations across China within five years.

Strategically, Gloria Jean’s intended to avoid the franchise model in China, instead pursuing partnerships with bookstores and banks to target niche customer segments. The brand also planned a large flagship store in Beijing later in 2015 and collaborations with an Australian bakery chain to integrate food offerings. Unlike mass-market chains, Gloria Jean’s positioned itself as a provider of customizable, high-quality coffee tailored to individual tastes.

The Bigger Picture: Competition and Market Growth

The Chinese coffee market was already crowded. International players like Starbucks, Costa, Seattle’s Best, and Illy had aggressively expanded, while domestic brands such as Carving Time and Garage Café were gaining traction. Marketing expert Li Zhiqui noted that few high-end coffee shops in China were actually profitable, and that shifting from buns to coffee involved vastly different supply chains.

Yet Zhang remained optimistic. He pointed out that coffee shops had lower labor and rental costs compared to restaurants, and that the market was growing fast. China’s coffee consumption was rising at roughly 15% annually—compared to just 2% globally—with the market valued at around RMB 70 billion in 2012 and projected to hit RMB 150 billion within five years.

Goubuli’s coffee strategy was part of a broader push. In 2014, the group opened four new restaurants despite a slowdown in China’s overall foodservice sector, with plans for four more in 2015. Beyond coffee and buns, Goubuli was also exploring expansion into Singapore and the United States, and preparing for a major collaboration with Western food conglomerates to develop frozen food lines for global markets.

Frequently Asked Questions

Did Goubuli actually buy a coffee brand?

No, Goubuli did not purchase Gloria Jean’s Coffees outright. Instead, through its subsidiary, it acquired the permanent right to operate the brand in China under a licensing agreement with Australia’s Retail Food Group. Goubuli holds 80% of the joint venture and paid AUD 6 million (RMB 30.63 million) in franchise fees.

What year did Goubuli get involved with Gloria Jean’s?

Goubuli secured the rights to Gloria Jean’s in China in January 2015, after nearly two years of negotiations that included ten international trips and five interruptions. The deal was finalized in December 2014.

How many Gloria Jean’s stores were in China before the deal?

Before the Goubuli deal, Gloria Jean’s already operated more than ten stores in China, located in cities such as Shanghai and Tianjin. The brand planned to add 20 more in 2015 alone.

What is Goubuli’s main business?

Goubuli is a 150-year-old Chinese food brand best known for its traditional steamed buns (baozi). Based in Tianjin, it is considered a “time-honored brand” in China and has expanded into other areas including coffee and international food markets.

How fast is China’s coffee market growing?

China’s coffee market was growing at approximately 15% per year around 2015, significantly faster than the global average of 2%. In 2012, the market was worth about RMB 70 billion, with projections of reaching RMB 150 billion within five years.

Is Gloria Jean’s a global coffee chain?

Yes, Gloria Jean’s Coffees originated in Australia and by 2015 had grown to become Australia’s largest coffee retail chain, with over 1,000 stores across 42 countries worldwide.

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