More and More Coffee Shops Are Opening in Small Cities! What Type of Coffee Shop Is Best for Small Town Entrepreneurship?

Professional coffee knowledge exchange. For 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, WeChat ID: qjcoffeex.

The three years of the pandemic have hindered many people's journey home, and hometowns, which used to be filled with traditional New Year's atmosphere, have lost some of their lively spirit.

However, during this Spring Festival, homes have become lively again. This year, I noticed that many coffee shops have suddenly appeared in high-traffic areas in my hometown, including trendy coffee shops, private specialty coffee shops, and chain coffee brands like Luckin Coffee and Starbucks.

So why are coffee shops expanding to smaller counties? Relevant data shows that the opening speed of coffee shops in most third-tier cities is growing rapidly, even faster than in first and second-tier cities. According to the "2022 China Fresh Coffee Category Development Report" jointly released by Meituan and Ka Men, as of May 1, 2022, there were 117,300 coffee shops in mainland China, an increase of 15,000 from the previous year.

Professional analysts suggest that office workers may be the primary consumer group for coffee in third-tier cities. These office workers mostly returned from other major cities and have already developed a habit of drinking coffee, making them the key demographic driving county-level coffee consumption.

They chose to return home for employment or entrepreneurship for various reasons, bringing with them their demand for coffee. Under their influence, people in county towns have also begun to develop an interest in coffee.

The emergence of this demand naturally sparked the interest of a group of local entrepreneurs who, leveraging their advantages in understanding local markets and industrial structures, created their own coffee brands.

Major Coffee Brands Target County Markets

In addition to local entrepreneurs, major coffee brands have also recognized the potential of county-level coffee markets. Brands like Luckin Coffee and Starbucks are planning to expand into smaller counties.

On the 5th of last month, Luckin Coffee announced in its official WeChat account that it would recruit new retail partners in 41 cities across 9 provinces. These locations are primarily in third and fourth-tier cities.

Starbucks China's 2025 China Strategic Vision also states that Starbucks plans to open 3,000 new stores at an average rate of one new store every 9 hours by 2025, covering over 300 cities in China.

Liu Wenjuan, Chief Operating Officer of Starbucks China, stated that these 300-plus prefecture-level markets include nearly 3,000 county-level cities.

The Potential of County-Level Markets

From these statistical data and coffee brands' development plans, it's not difficult to see that下沉市场 (sinking market) is indeed an area for future significant development by coffee brands. Professional analysts believe that in recent years, the country's support for county-level cities has continuously increased, and the consumption level of county-level cities will continue to rise.

Furthermore, various county-level cities are also providing local policy support for returning populations, attracting people from other regions to return for employment and entrepreneurship. Under these circumstances, county-level cities will continuously attract population inflow.

With the continuous return of population, the age structure and consumption preferences of county towns will change, meaning that county-level consumer markets will have enormous potential for future development.

Future Competition in County-Level Coffee Markets

Against the backdrop of strong consumption potential and broad coffee markets, we can foresee that in the coming period, competition in county-level coffee markets will become increasingly intense.

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