Why China’s Coffee Consumption Is Growing Fast

In a country long defined by tea culture, something unexpected is brewing: a rapid rise in coffee drinking. While overall consumer demand in China may be slowing with the economy, coffee—often priced well above local beverages—is seeing remarkable growth. This shift isn’t just about caffeine; it reflects deeper changes in taste, class, and cultural influence. So why are more Chinese people drinking coffee, and why now?

China’s coffee consumption is expanding at 15% per year, compared to the global average of just 2%, making it the fastest-growing coffee market in the world. Urban professionals, returning overseas graduates, and even older consumers are driving demand beyond major cities.

A Rapidly Expanding Coffee Market

According to the U.S. Wall Street Journal, citing data from market research firm Euromonitor, Chinese consumers drank just 4.5 billion cups of coffee in recent years, a fraction of the 133.9 billion cups consumed annually in North America. Yet between 2014 and 2019, China’s coffee consumption was projected to grow by 18%, while the U.S. market was expected to see only 0.9% growth.

Born in California, Jimmy Lee opened Ocean Grounds, a coffee shop in China, four years ago. He reported increasing foot traffic, with prices like 38 RMB (about $6 USD) for a latte. Initially attracting young white-collar workers and returnees, his customer base has since broadened significantly. “It’s hard to say who the average customer is now,” Lee said. “The market is growing very fast.”

Coffee as a Symbol of Western Lifestyle

Rafayel Ogutty, a food and beverage analyst at BMI Research, noted that coffee represents “a Western lifestyle” that appeals to China’s urban upper and middle classes. In contrast, tea is seen as a more traditional beverage. This cultural shift is part of a broader trend in which affluent Chinese consumers are exploring foreign goods and habits, including imported fresh fruit and other luxury items.

The appeal isn’t limited to coffee alone. Wine and chocolate are also gaining popularity among urban populations, despite setbacks from anti-corruption campaigns. According to Australia’s National Bank, as people transition from lower to middle income brackets, their consumption patterns can change dramatically—wine consumption, for instance, may rise by over 700%.

Big Coffee Chains Bet on China

Major international coffee chains are betting heavily on this trend. Starbucks, for example, operated 823 stores in mainland China and aimed to expand to 3,000 by 2019. Pacific Coffee, with around 400 locations in Hong Kong and mainland China, also forecast strong future demand. A Pacific Coffee spokesperson stated that the growing number of foreign-style cafés in China, along with the experiences of returning overseas Chinese, were helping to boost coffee culture. They also pointed to the rise of the middle class as a key driver of the market’s expansion.

Some companies are adapting their products to local tastes, offering sweeter, milk-forward beverages. Meanwhile, global commodity analysts, including those at Barclays, suggest that coffee is among the goods—including gold and silver—that could benefit from China’s economic shift toward domestic consumption.

What’s Driving the Growth?

Several factors contribute to the surge in coffee consumption:

• A rapidly expanding middle class with disposable income
• An increasingly urban population open to Western lifestyles
• The return of overseas-educated Chinese bringing foreign habits
• Marketing and expansion by global coffee chains
• Coffee being positioned as a modern, aspirational product

Although China’s per capita coffee consumption remains low—just 1% of the global share—the sheer size of the population offers enormous growth potential. As David Thorn, head of global consumer industries at Australia’s National Bank, put it: “When you’re talking about that level of GDP, even 7% growth is huge.”

Frequently Asked Questions

How fast is China’s coffee market growing compared to the rest of the world?

China’s coffee consumption is growing at 15% annually, while the global average growth rate is just 2%. This makes China the fastest-growing coffee market worldwide.

What are the main reasons behind the growth in coffee consumption in China?

The growth is driven by urbanization, a rising middle class, exposure to Western lifestyles, the influence of returning overseas graduates, and marketing efforts by global coffee chains. Coffee is seen as modern and aspirational.

Which international coffee brands are expanding in China?

Starbucks and Pacific Coffee are among the major international brands rapidly expanding in China. Starbucks had 823 stores on the mainland and aimed for 3,000 by 2019, while Pacific Coffee operated around 400 locations in Hong Kong and mainland China.

Is coffee becoming more popular than tea in China?

Coffee is not replacing tea, which remains a traditional and widely consumed beverage. However, coffee is gaining popularity as a symbol of Western lifestyle and modernity, especially among urban consumers and younger demographics.

Are coffee companies adapting their products for Chinese tastes?

Yes, some coffee companies are modifying their offerings to suit local preferences, such as creating sweeter, milk-heavy drinks. This strategy aims to attract consumers transitioning from traditional tea to coffee.

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