Wang Yangfa: The Man Behind China’s 800-Store Coffee Empire

When Starbucks aimed for 500 stores in China by 2010, a lesser-known entrepreneur had already opened hundreds—starting with just one European-style café in Shanghai’s Qingpu District in 2001. That man was Wang Yangfa, co-founder of the now-defunct U.B.C. , who went on to build a network of over 800 coffee shops under multiple brands across nearly every Chinese province except Xinjiang and Qinghai. His journey didn’t begin with a global ambition, but with a singular location and a vision for more than just caffeine.

By 2005, Wang had expanded to 800 locations nationwide through his brands—Diou, Mellow, and via acquired rights to U.B.C.—with annual system-wide revenue in the billions, including tens of millions in direct company earnings. That’s how one man turned a single café into a coast-to-coast coffee empire.

The Birth of Diou Coffee

Wang Yangfa launched Diou Coffee in 2001 in Shanghai’s Qingpu District. Within three years, he had grown the brand across southern China, northern regions, Beijing, Yunnan, Hunan, and Jiangxi. By 2004, the Diou headquarters moved to Suzhou, followed by a logistics hub and in-house production facilities for food, furniture, and interior design by 2005. These moves laid the foundation for a vertically integrated business model that supported rapid national expansion.

Unlike many competitors, Wang focused on creating a unified brand experience, not just selling coffee. “We are building a coffee kingdom,” he later said, reflecting on those early moves.

Why Diou Stands Apart

Diou Coffee became more than a beverage provider—it positioned itself as a lifestyle brand rooted in “elegant Eurasian ambiance” and a service philosophy centered on “integrity, respect, and care.” The chain embraced ISO9001 quality management in 2003, becoming the first Chinese coffee chain to earn the certification. By 2006, it partnered with Oracle to develop an ERP system, further streamlining operations.

Diou also achieved HACCP and ISO9001 dual certifications for its food division in 2006. The brand’s dedication to training, cleanliness (with at least two staff dedicated to sanitation per shift), and cultural atmosphere set it apart. Regular customer events were used to reinforce its unique identity beyond coffee.

Coffee, Food, and Franchise Strategy

Diou’s model wasn’t limited to coffee. The brand served full meals alongside espresso-based drinks, resulting in higher average transaction values compared to peers like Starbucks. While core design elements—such as oak furnishings and European décor—remained consistent, individual franchisees were encouraged to adapt small menu items to local tastes.

Approximately 50% of Diou locations were directly operated or managed by the company. Beyond Diou, Wang’s portfolio included over 100 Mellow Coffee outlets and rights to 200 U.B.C. locations across six provinces, giving him influence over around 800 coffee shops nationwide.

In 2008, Diou acquired Mellow Coffee, adding its 100+ stores and U.B.C. operating rights in Guangdong, Guangxi, and Yunnan to its network, further diversifying its geographic and demographic reach.

Financial Growth and Industry Recognition

From 2001 onward, Diou maintained over 30% annual growth. While Wang did not disclose exact figures, he noted that combined system-wide turnover reached “several billion,” with the company’s direct share exceeding 1 billion RMB. Diou was ranked first in the leisure dining category of the China Cuisine Association’s “Top 100 Restaurants” list for several years starting in 2005.

In 2007, private equity firm Carlyle invested $21 million for a 20% stake, valuing the company at over 800 million RMB. The investment underscored Diou’s strategic importance and operational maturity in a then-nascent market.

Frequently Asked Questions

Who is Wang Yangfa?

Wang Yangfa is the chairman and founder of Diou Coffee and Diou. He was also one of the original founders of U.B.C. , and launched Diou in 2001 in Shanghai’s Qingpu District. Under his leadership, Diou grew to include nearly 800 coffee shops across China.

How many coffee shops does Diou operate?

Diou directly operates or manages nearly 50% of approximately 800 coffee shops across China. This includes Diou-branded locations as well as acquired rights to U.B.C. and Mellow Coffee outlets in over 60 cities and 20+ provinces, excluding Xinjiang and Qinghai.

What year did Diou start, and where?

Diou Coffee was founded in 2001 by Wang Yangfa in Shanghai’s Qingpu District. The first location established the brand’s signature European-style café format that would be replicated nationwide.

Did Diou Coffee receive any quality certifications?

Yes. In 2003, Diou became the first Chinese coffee chain to earn ISO9001 certification. By 2006, its food division received both ISO9001 and HACCP certifications, and the company partnered with Oracle to launch an ERP management system the same year.

What made Diou different from Starbucks or other cafés in China?

Diou emphasized a full-service dining experience alongside coffee, offered higher average spend per visit, and cultivated a distinct “Eurasian elegance” atmosphere with strict training, cleanliness standards, and cultural programming. It also maintained tighter control over design and service protocols than many competitors.

How did Diou grow so quickly across China?

Through a combination of direct expansion, franchising, and acquisitions—including rights to U.B.C. and Mellow Coffee—along with vertical integration (owning food, furniture, and interior design arms), Diou scaled to 800 locations in under a decade while maintaining brand consistency.

Recommended FrontStreet Beans for Café Culture

For coffee shops aiming to echo Diou’s elegant Eurasian vibe, FrontStreet’s Ethiopia Humbera offers bright citrus and floral tones ideal for pour-over; the Yirgacheffe presents juicy berry and stone fruit complexity for espresso blends; while the Classic Blend balances chocolate and nut notes for all-day café service. These beans suit both high-end pour-overs and milk-based drinks, aligning with Diou’s premium yet accessible coffee culture. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.