Table of Contents
Overview
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- What you need to know
- Covered in this report
- Excluded
- Definition
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- Figure 1: Definition of heavy/light/non-users of coffee houses
Executive Summary
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- The market
- Upward value trend of the overall coffee market
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- Figure 2: Best- and worst-case forecast for on-premise coffee, by value, 2013-23
- Volume keeps growing but will encounter a fall afterwards
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- Figure 3: Best- and worst-case forecast for on-premise coffee, by volume, 2013-23
- Affordable price promotes the popularity of coffee among Chinese consumers
- Companies and brands
- Intense competition caused by growing number of new entrants
- Providing delivery service to compete with other players
- Differentiating through combining tea shop drink elements
- Robot barista turns up
- The consumer
- High competitiveness of affordable on-premise coffee vendors
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- Figure 4: Consumption channels and frequency, China, September 2018
- Importance of physical stores
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- Figure 5: Reasons for sitting in, China, September 2018
- Increasing requirements on quality ingredients and processes
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- Figure 6: Drink selections, China, September 2018
- Trend of pairing healthy food with coffee
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- Figure 7: Food pairing with coffee, China, September 2018
- Challenges on new retail coffee development
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- Figure 8: Purchase reasons, China, September 2018
- High satisfaction and expectation on mix-and-match meal deal
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- Figure 9: Satisfaction and expectation, China. September 2018
- What we think
Issues and Insights
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- Compete in associating with work-related occasions
- The facts
- The implications
- Opportunity to develop healthy snacks with coffee
- The facts
- The implications
- Attract the 20-24s from other categories
- The facts
- The implications
The Market – What You Need to Know
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- Value will keep increasing
- Volume will grow but be followed by a slight decrease
- Intense competition among both drink categories and coffee vendors
Market Size and Forecast
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- A steady growth in value
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- Figure 10: Best- and worst-case forecast for on-premise coffee, by value, 2013-23
- An increase followed by a downward trend in volume
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- Figure 11: Best- and worst-case forecast for on-premise coffee, by volume, 2013-23
Market Factors
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- Coffee as a casual soft drink competes with other sub-categories
- Freshly made coffee fights with other coffee categories
- New retail coffee contributes the most growth in coffee consumption
- Absence of leading brands in specialty coffee market
Key Players – What You Need to Know
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- Traditional brands and new retail coffee are increasing availability
- C-stores and fast food restaurants compete in lower and mid-level market
- Big brands are improving consumption experience
Market Share
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- Steady growth of leading traditional coffee brands
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- Figure 12: Leading traditional chain coffee houses, by volume – number of outlets, China, 2016 and 2017
- New retail coffee businesses and C-stores are catching up with the traditional big brands
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- Figure 13: Leading coffee brands, by volume – number of outlets, China, 2018
- More international players enter Chinese market
Competitive Strategies
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- Fast delivery is a strong point
- Leading brands put effort into upgrading consumer experience
- Using fission marketing to reach potential consumers
- Borrowing ideas from tea shop drinks
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- Figure 14: Coffee drinks borrowing ideas from tea shop drinks, China, 2018
Who’s Innovating?
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- Probiotics in freshly-made coffee
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- Figure 15: Probiotics in freshly-made coffee, by Seesaw, China, 2018
- Espresso as a dipping sauce
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- Figure 16: Dipping waffle into espresso, by Knockbox Coffee Company, China, 2018
- Technology brings opportunity to go premium
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- Figure 17: Ratio coffee and cocktail bar, China, 2018
- The dream of owning a coffee house has come true
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- Figure 18: The Pocket Coffee House mini program, by Coffee Box, China
The Consumer – What You Need to Know
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- Associate with business-related occasions
- New retail coffee houses need advantages other than discount and fast delivery
- High expectation on healthy coffee set meals
Consumption Channel and Frequency
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- Convenience stores have gained the highest penetration rate
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- Figure 19: Consumption channels and frequency, China, September 2018
- New retail coffee houses have opportunity to surpass others
- More eastern residents visit bakery houses for coffee
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- Figure 20: Heavy users buy coffee from bakery houses and fast casual dining, by region, China. September 2018
Reasons for Sitting in
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- High competence of physical stores
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- Figure 21: Reasons for sitting in, China, September 2018
- Coffee houses are competing with tea shops for consumers meeting friends
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- Figure 22: Reasons for sitting in, China. September 2018
- Become the best choice for business-related occasions
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- Figure 23: Selected reason for sitting in, by personal monthly income, China. September 2018
- Figure 24: Selected reasons for sitting in, by generation, China, September 2018
Drink Selections
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- Quality latte and cappuccino bring opportunity for further purchasing
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- Figure 25: Drink selections, China, September 2018
- A challenge on cold brew coffee
- Opportunities for providing non-coffee drinks in late hours
Food Pairing with Coffee
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- Food paring selections target the 25-29s and 40-49s
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- Figure 26: Other choices for on-premise coffee consumers who pair nuts with coffee, by selected age groups, China, September 2018
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- Figure 27: Consumption channels of on-premise coffee heavy users who pair nuts with coffee, by selected age groups, China, September 2018
- Popularity of savoury biscuits will catch up with that of sweet ones
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- Figure 28: Food pairing with coffee, China, September 2018
- Upward trend of pairing salad with coffee
Reasons for Ordering New Retail Coffee
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- Good taste is the top reason followed by discount and fast delivery
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- Figure 29: Purchase reasons, China, September 2018
- Drive sales by marketing on friend’s recommendation
- Best place for promoting new trials
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- Figure 30: Selected purchase reason, by tier one cities, China. September 2018
Expectations for New Retail Coffee and Services
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- Consumers are more interested in set meals
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- Figure 31: Satisfaction and expectation, China. September 2018
- Get to know consumers through offline new product tasting events
- Non-food rewards to attract 20-24s
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- Figure 32: Satisfaction and expectation for redeeming non-food rewards, by age, China, September 2018
Meet the Mintropolitans
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- Pay more attention to indoor design and space
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- Figure 33: Consumption channel and frequency, by consumer classification – Mintropolitans, China, September 2018
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- Figure 34: Reasons for sitting in, by consumer classifications, China. September 2018
- Opportunities to widen coffee choices especially cold brew coffee
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- Figure 35: Drink selections, by consumer classification, China, September 2018
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- Figure 36: Number of consumed drink types, by consumer classification, China, September 2018
- Subscription service for Mintropolitans
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- Figure 37: Expectations for new retail coffee and services - subscription service, by consumer classifications, China, September 2018
Appendix – Market Size and Forecast
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- Figure 38: Sales value of on-premise coffee, China, 2013-23
- Figure 39: Sales volume of on-premise coffee, China, 2013-23
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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