Global Capital Shows Strong Interest in Chinese Chain Coffee Brands: China's Coffee Market Expected to Reach Trillion-Yuan Scale by 2025!

Have you noticed that there seem to be more and more coffee shops around us in recent years? No matter where you go, we can easily find the presence of coffee shops. According to data, in 2020, the number of newly registered coffee shops nationwide reached 22,700, and the coffee market size reached 300 billion yuan. By the first 10 months of 2021, the number of newly registered coffee shops nationwide had already reached 20,900.

The market is continuously expanding at an accelerated pace, with the main reason being that multiple chain coffee brands, after securing capital, have been crazily expanding their stores! From January to September 2021, there were 21 financing events in the domestic coffee sector, with a total financing amount exceeding 4.6 billion yuan. With intensified competition in the coffee industry, everyone immediately embarked on brand expansion after securing financing, doubling the number of coffee shops in a region within a short period. With such rapid growth, market analysis predicts that China's coffee market size will reach 1 trillion yuan by 2025!

Why Global Capital is Enthusiastic About China's Chain Coffee Market

Why is global capital so enthusiastic about China's chain coffee market? The main reason is the rapid growth of the domestic fresh-ground coffee market. As of 2020, fresh-ground coffee accounted for only 36.5% of China's coffee market, which is a significant gap compared to other developed countries, while instant coffee dominated the market with a 52.4% share.

Since the outbreak of COVID-19, people's work and life stress have increased, and to stay alert and refreshed, the demand for coffee has grown. At the same time, with the spread of specialty coffee culture, analysis predicts that by 2023, fresh-ground coffee's share in China's coffee market will rise to over 51%, while instant coffee's share will drop to below 40%.

It's evident that China's fresh-ground coffee market is a typical consumer upgrade market with considerable growth prospects. From the perspective of industry growth speed, fresh-ground coffee is also a high-growth sector.

Exceptional Growth Opportunities in China's Coffee Market

After the COVID-19 outbreak, global fresh-ground coffee consumption decreased by 16% year-on-year in 2020. Market analysis suggests that in the next five years, the compound annual growth rate of global fresh-ground coffee consumption will be 5.7%, while China's fresh-ground coffee consumption will achieve a compound annual growth rate as high as 24.6%. Such rapid growth provides chain companies in the coffee industry with a high margin for error and opportunities to overtake competitors.

Additionally, the main reason capital favors China's chain coffee market is the low chain rate of domestic coffee shops. As of 2020, China's coffee chain rate was only 13%, which still has significant room for growth compared to the over 50% chain rate in overseas countries. With capital injection, the domestic coffee shop chain rate is expected to reach 18% by 2023.

High Profitability Driving Investment

Secondly, domestic coffee shops are simply too profitable. Local chain coffee brands like Manner and Luckin typically operate smaller-scale stores compared to large chains like Starbucks and Costa. Small shops require low initial investment, so the return on investment doesn't take too long—generally around half a year, while large shops often need two years. The high return on investment and ultra-short investment recovery period of China's chain coffee naturally make them a favorite among capitalists.

Image source: Internet

For professional coffee knowledge exchange and more coffee bean information, please follow Coffee Workshop (WeChat public account: cafe_style).

For more specialty coffee beans, please add FrontStreet Coffee on private WeChat, ID: kaixinguoguo0925

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473