How International Coffee Chains Thrive in China

While Western retailers like Best Buy and B&Q struggled to gain traction in China, international coffee chains have defied the odds — thriving in a tea-drinking nation with deep-rooted beverage traditions. Their success raises a key question: how did coffee chains not just survive, but dominate, in a market long dominated by tea?

From 2008 to 2017, China’s coffee chain market grew from under $1.6 billion to over $4 billion — more than doubling by 2013 and projected to double again by 2017. This makes coffee one of the fastest-growing retail segments in the country.

The Rise of Starbucks in China

Starbucks opened its first China store in 1999 and has since built a brand synonymous with modern coffee culture. Rather than selling just coffee, it promoted a Western lifestyle — positioning its cafes as trendy meeting spots. Despite criticism in 2013 over high domestic pricing compared to overseas, Starbucks accelerated expansion. Earlier this year, it announced plans to operate at least 3,000 stores in China by 2019 — twice its 2017 count.

A Diverse and Growing Market

As Starbucks expands, competition intensifies. South Korea’s Maan Coffee and other independent cafes have proliferated in major cities. McDonald’s, KFC, Japanese and Taiwanese convenience stores have all added freshly brewed coffee to their offerings. Costa Coffee, owned by UK-based Whitbread, aims to double its stores to 700 by 2018. Korean chain Maan Coffee plans to double its 100 locations in mainland China by 2015. UBC, one of the earliest entrants from Taiwan, saw its market share drop from 33% in 2008 to 22% in 2013, even as overall demand rose. Meanwhile, Starbucks grew its share from 12% to 31%, and Costa from 1% to 5.5%. KFC only recently began offering coffee in most locations, while local city convenience stores now sell brewed coffee.

What the Future Holds

According to Mintel analyst Esther Lau, the market will keep diversifying, with competition from Korean, American, British and domestic chains, as well as boutique cafes. Annual per capita coffee consumption remains low at just four cups, indicating significant room for growth. AT Kearney partner Torsten Stocker noted that coffee quality expectations have risen sharply since the early 2010s, when sweetened instant coffee like Nescafé dominated. In Shanghai cafes today — whether a packed Maan Coffee in the suburbs or a full house at a downtown Starbucks — customers increasingly favor coffee drinks over caffeine-free beverages, often working or socializing over their cups.

Frequently Asked Questions

How big is China’s coffee chain market?

In 2008, China’s coffee chain market was worth less than 10 billion RMB (around $1.6 billion). By 2013, it had more than doubled, and it was expected to double again by 2017, reaching over 40 billion RMB.

Which international coffee chain is the most successful in China?

Starbucks is the most successful international coffee chain in China. It has grown its market share from 12% in 2008 to 31% in 2013, and plans to operate at least 3,000 stores by 2019, twice as many as it had previously.

How have other international chains performed in China?

Costa Coffee aims to double its stores to 700 by 2018, while Korean brand Maan Coffee plans to double its 100 mainland locations by 2015. McDonald’s and KFC have also expanded their coffee offerings, with KFC only recently adding coffee to most stores. Meanwhile, UBC, one of the earliest entrants, saw its market share fall from 33% to 22% between 2008 and 2013.

What is driving the growth of coffee consumption in China?

Growth is driven by changing lifestyles, the popularity of cafes as social spaces, increased exposure to Western coffee culture, and rising expectations for coffee quality. Per capita consumption is still very low at around four cups per year, leaving much room for expansion.

Are there many independent coffee shops in China?

Yes, alongside global chains, large cities have seen a rise in independent and Korean-style coffee shops, contributing to a more diverse and competitive coffee retail market.

Recommended FrontStreet Beans for Coffee Shops

For cafés mirroring China’s booming coffee scene, FrontStreet Coffee’s Ethiopia Humbera offers bright citrus and floral notes ideal for pour-overs, while its PWN Golden Mandheling delivers a rich, full-bodied profile perfect for espresso-based drinks. Both showcase the quality and diversity now expected by Chinese coffee drinkers. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.