As the Street Stall Economy Boom Fades, Is Running a Mobile Coffee Cart Still Profitable?

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The Rise and Fall of Mobile Coffee Carts

Starting from 2020, the street stall economy swept across the country. On social media, coffee shop exploration shifted from beautifully decorated physical stores to mobile coffee stalls and carts with an authentic street atmosphere.

More sophisticated setups included camping tables and chairs provided by coffee carts, combining the booming street stall economy with the camping economy, offering busy urbanites a brief outdoor experience when travel wasn't possible.

Social media platforms saw an increasing number of people sharing their successful coffee cart business ventures, along with tutorials on how to convert coffee carts and lists of equipment and supplies needed for coffee cart operations.

For a while, coffee carts became the goal for many entrepreneurs and side hustlers. Some converted their existing vehicles, while others specifically purchased vehicles for conversion, with investments ranging from tens to hundreds of thousands of yuan.

Three years later, the once-popular search term "mobile coffee cart" has become associated with warnings to avoid pitfalls. Some of the latest success stories date back to the summer of 2021. Last summer, even after visiting multiple well-organized mobile markets, it was rare to see coffee carts. Instead, most vendors sold snacks, lemon tea, clay pot rice, and mixed drinks—businesses that don't require extensive machinery.

Why Did Coffee Carts Disappear So Quickly?

Compared to other mobile food stalls, coffee carts require significantly higher investment while dealing with perishable ingredients. Additionally, many coffee carts operate primarily in the evening, when coffee consumption is naturally lower. While coffee carts may appear cheaper than physical storefronts, this is only superficial. If purchasing a vehicle specifically for conversion, the costs can even exceed opening a small neighborhood coffee shop.

Even with an existing vehicle, we must factor in the vehicle's cost, fuel or electricity expenses, labor costs, coffee machine, grinder, generator, small refrigerator, various equipment, utensils, ingredients, and decorations. The total cost is substantial! Consumers choose coffee cart products for the outdoor experience and urban atmosphere, as well as for relatively lower prices compared to brick-and-mortar establishments. Therefore, despite significant investment, quickly recouping costs through product sales is extremely difficult. Breaking even daily operations is already quite an achievement.

While some entrepreneurs have indeed made money through coffee carts, these are few cases, often among the earliest operators. As the number of coffee carts rapidly increased, many early entrants reported that business became much more difficult.

Operating a coffee cart is far from the ideal venture many imagine.

Challenges of Coffee Cart Operations

1. Inability to Obtain Business Licenses

Some coffee carts have business licenses because the owners already operate physical coffee shops. However, most coffee carts cannot obtain proper business licenses.

2. No Fixed Location

Regardless of where you set up, someone will intervene. Traffic police enforce roadside parking regulations, urban management officers monitor designated areas, and property management controls residential or parking lot areas. Without a fixed location, there's rarely repeat business or stable customer base. If operating in legal mobile market areas, additional venue fees and a 100% requirement for business licenses apply.

3. Weather Dependency

Cloudy, rainy, humid, or winter days—weather that makes people uncomfortable or too cold—inevitably means no business for mobile stalls. Therefore, coffee carts only have good business during the few months from spring to summer and summer to autumn, on sunny days.

4. Inability to Clean Equipment Promptly

After making most coffee products, the equipment used needs immediate cleaning. Particularly, milk pitchers that aren't cleaned promptly can develop residue that spoils and contaminates subsequent products.

5. Generator Noise and Fumes Affect Customer Experience

Due to large electrical equipment like coffee machines and grinders, most coffee carts require generators. However, generators run on gasoline and produce noise during operation, which not only diminishes the consumer experience but also leads to complaints from nearby residents over time.

Is It Still Worth Operating a Coffee Cart in 2023?

As the economy gradually recovers, the street stall economy is no longer mainstream. After years of limited social interaction, consumers now prioritize physical venues over mobile stalls. Additionally, coffee shop prices have become more affordable, with regular products like Americanos and lattes averaging 15-25 yuan in most coffee shops.

For consumers, at similar price points, most prefer fixed locations that provide shelter from wind and rain. The hygiene standards of physical establishments also offer consumers greater peace of mind.

Image source: Internet