BEIJING, People’s Republic of China – With China’s growing middle class and a shift toward more upscale consumer habits, the coffee industry is growing nationwide.
Although tea has always been the preferred drink of many Chinese, the nation is developing a thirst for coffee, particularly among young professionals in the its largest cities.
In southern China’s Yunnan province, famed for its Pu’er tea production, there are large coffee plantations that now produce more than 100,000 tons per year.
Meanwhile, international cafe chains such as Starbucks and Costa have also focused on establishing themselves in the Chinese market, which has brought about a deeper understanding of coffee culture.
China has become one of the fastest-growing coffee consuming markets in the world, with a growth rate of 25 percent. But Chinese coffee brands face challenges as well as opportunities. Indeed, in 2016 there were more than 100,000 coffee shops in China, but the rate of closure was 13.5 percent.
Aiming to provide a platform to address such issuses and to expand the Chinese coffee market, the 5th China International Cafe show was held in Beijing from July 6-9.
The show welcomed more than 300 exhibitors from all around the world, and it was expected to receive more than 70,000 visitors.
At the exhibition, Shi Shuomiao, marketing manager of Mellower Coffee, a speciality coffee chain that originated in Shanghai in 2011 and now has 20 stores, said that the key to the success of coffee shops is to concentrate on product quality.
“For Chinese brands, we learn from the foreign coffee companies in management; we also create a third space for ourselves to develop. Our aim is to make a different way of managing, which is to focus on the quality of coffee products,” Shi said.
“What we want is to let the customers enjoy coffee itself, which is also our motto: just for a good cup of coffee… But now the popularity of coffee culture is still low in China, and what we’re doing is to change the consumers’ attitude toward coffee-drinking.”
Despite the growth of China’s coffee market, there are concerns about low entry requirements, poor profits and a lack of management expertise. Joyce Chen, general manager of Hiang Kie Coffee Beijing Business and Trade Co. Ltd., believes that individuation, creativity and high quality of products are essential to good management.
“Chains in China now pay more attention to quality, while the foreign brands favor the uniformity and consistency of flavor. Some of our specialty coffee shops focus more on the individuation and high quality of coffee; that should be a development trend for coffee shop management in the future,” Chen said.
“And for shop decoration, it should be simple and clean, and more attention should be paid to the quality of products, the outlooking, the control of materials, the simple and creative presentation of products are key elements for success.”
Though the coffee market in China is expanding, there is still a lot of room for growth. The national per capita consumption is only about five cups per year; in neighboring South Korea, the number is higher than 300, and the world average is about 240. China’s consumption lags well behind the levels in Europe and in many of its Asia-Pacific neighbors.
Facing such challenges, professionals at the exhibition shared their experiences and made suggestions for the stable and sustainable development of China’s coffee industry and improving the national coffee culture.
“We never changes our pursuit for the quality of coffee and best service for customers; that is the most important point for us to develop in the Chinese market. And it’s our coffee practitioners’ obligation to serve our customers better products,” said Liu Wenyan, chairman of Beijing Milan Gold Coffee Company.
“Half of our company’s staff are technicians. We have more service staff and fewer factory workers, because the advanced production line will guarantee the quality of coffee production. Our products are mostly found in five-star hotels, but we hope we can make more Chinese to pursue good quality of coffee, know Milan Gold, and serve more coffee-lovers.”
Founded in 1995, Milan Gold Coffee Company was one of the first brands to roast its own coffee beans in mainland China, and it has witnessed the development of China’s coffee industry. When asked about building Chinese brands’ fame in the international coffee industry, Liu expressed optimism and confidence.
“Last year, we were proud to be appointed as the official brand for G20 Hangzhou Summit. And at the Beijing One Belt One Road Forum held this May, almost all the assembly rooms and hotels the leaders stayed in are now our clients,” Liu said.
“We have the confidence to compete with any global brand in this field. Now we’re honored that the coffee you drink in Hong Kong’s Shangri-La Hotels and Kerry Centers is from Milan Gold Coffee Company.
“With the spreading of our overseas operations, Milan Gold will appear at Shangri-La hotels in Malaysia. We’ll attend the Milan International Coffee Exhibition in Italy this October, which a first time for a Chinese coffee brand. I believe that we’ll make more coffee-lovers around the world get to know us.”
