China's First Costa Drive-Thru Store Opens in Shanghai!

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

For more specialty coffee beans, please add the private WeChat of FrontStreet Coffee, WeChat ID: qjcoffeex

The Expanding Chinese Coffee Market

With the continuous expansion of China's coffee market in recent years, coffee brands such as Starbucks, Luckin Coffee, Costa, KFC, and Pacific Coffee are accelerating their competition for market share through various consumer scenario layouts.

Costa Opens First Drive-Thru Store in China

Recently, according to Coffee Finance reports, the coffee chain brand Costa Coffee has opened China's first "Drive-Thru" store on Tainan West Road in Pudong New Area, Shanghai. Costa's Chinese brand name is "咖世家" (Coffee House). The brand was founded in London in 1978 by the Costa brothers from Italy. In 2006, Costa Coffee officially entered the Chinese market and opened its first store in China on Nanjing East Road Pedestrian Street in Shanghai.

According to public information, Costa's "Drive-Thru" stores were already established abroad long ago. Around mid-2019, Costa operated a total of more than 40 "Drive-Thru" stores in the UK. Then with the outbreak of the COVID-19 pandemic, this number rapidly increased to over 300 stores within a few months, all offering "Drive-Thru" or similar takeout services.

Understanding the Drive-Thru Concept

"Drive-Thru" may be relatively unfamiliar to Chinese consumers. This model was first pioneered in the United States in 1921, meaning customers can directly get meals or beverages packaged to go without getting out of their cars. This model makes most people think of fast food restaurants. With the rapid development of fast food throughout the 21st century, the Drive-Thru market has been continuously growing.

In 1975, McDonald's opened its first Drive-Thru restaurant in the United States. Until today, there are thousands of such restaurants worldwide. Coffee chains such as Starbucks, Tim Hortons, and Peet's also have some stores with Drive-Thru functionality or专门 provide Drive-Thru services for customers. For decades, Drive-Thru coffee has gradually become an important part of the broad coffee industry.

Innovative Business Models: Meeting Room Rentals

According to reports, in addition to traditional coffee sales business, Costa's Drive-Thru stores can also rent out meeting rooms. The entire store is approximately 500 square meters with a total of 4 meeting rooms available for rent. The provided shared office spaces are equipped with traditional office equipment such as projectors and conference tables, available for 12-18 people to use for meetings. Meeting room rentals? It seems Starbucks also offers such business?

Yes, that's right! Starbucks China launched the "Shared Space" concept store last November, which can also meet the needs of mobile office, small group collaboration, business meetings, and multi-person conferences. The concept store is divided into four major functional areas, including private paid meeting rooms, semi-open single-person work areas, sofa areas convenient for group discussions, and leisure areas for short breaks. To ensure privacy, the meeting rooms all adopt noise reduction designs, and large meeting rooms are also equipped with screen projection and other equipment.

Costa vs. Starbucks: A Competitive Analysis

When entering the Chinese market initially, Costa regarded Starbucks as its biggest competitor. Not only was the coffee pricing close to Starbucks, but it also adopted a more aggressive expansion strategy, opening 2 to 3 new stores almost every week, adopting a "close follow" tactic against Starbucks - almost every Costa store was located adjacent to Starbucks. However, its development speed seems to have gradually slowed in recent years.

It seems Costa has been left far behind by its target competitor Starbucks. Starbucks' latest quarterly financial report for 2022 shows that its domestic store count has reached 6,021, and it plans to increase the number of stores to 9,000 by fiscal year 2025. Meanwhile, data from Narrow Door Restaurant Eye shows that Costa currently has only 424 stores in China. In terms of store count and market share, it is significantly lagging behind Starbucks, which continues to strengthen its presence in the Chinese market.

Future Prospects for Costa in China

But now that Costa's Drive-Thru store pilot has been successful, whether it will accelerate the brand's store opening speed in China remains to be further verified by the market.

A Costa representative stated: "We are committed to providing customers with quality service and experience when they visit our stores. We are delighted to open the first Drive-Thru store in China. Showcasing great innovations here is our key to gaining competitive advantages in the market."

Image source: Internet

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473