Not long ago, the idea of China as a coffee country would have seemed far-fetched. Tea has been woven into Chinese culture for millennia, both as a ritual and a part of traditional Chinese medicine. Coffee, by contrast, arrived much later and was long treated as a novelty for the westernized urban elite. 

That story has been changing surprisingly quickly.

At the end of 2025, China's Ministry of Human Resources and Social Security included "coffee processing technician" on its seventh list of newly recognized professions. 

Since 2010, China's coffee market has been showing a remarkable growth of an average annual rate of 21%, more than ten times the global average of under 2%. By 2024, the market was valued at around 789.3 billion yuan, expected to cross 1 trillion yuan in 2025. Annual per capita coffee consumption surpassed 20 cups for the first time, while coffee imports surged 32.5% year on year in 2024. Although the number pales in comparison to the US and European markets, where people often drink hundreds of cups a year, it indicates enormous space for growth. 

Urban areas are projected to account for around 60% of total coffee consumption in 2025, according to Market Research Future, with cities like Shanghai, Beijing and Chengdu leading the charge. The trendy cafes, once a foreign import, have become as much a fixture of Chinese city life as the tea houses they sit next to.

The homegrown disruption

What makes China's coffee story genuinely distinctive is not only how fast it's growing, but who is driving it. For much of the 2000s and early 2010s, American chain Starbucks dominated the market almost by default. At its peak in 2019, Starbucks commanded a 34% share of China's coffee market. By 2024, that figure had fallen to 14%.

The company that did the most heavy lifting is one that almost ceased to exist.

Luckin Coffee was founded in 2017, listed on the Nasdaq in 2019, and then spectacularly delisted in 2020 following a major accounting fraud scandal. However, it restructured and went back on the offensive with high store density, very competitive pricing and a mobile-first ordering experience designed for Chinese consumer habits. 

By Q3 2025, Luckin had grown to over 29,000 stores and was recording 112.3 million average monthly transacting customers, a 40.6% year-on-year increase, according to the US Securities and Exchange Commission. Starbucks, meanwhile, operated around 8,011 stores in China as of the end of fiscal year 2025, which is less than a third of Luckin's footprint.

However, Luckin's rise and scalability came with growing pains. A bruising price war with Cotti Coffee, founded by former Luckin executives, saw both chains slashing prices to as low as 9.9 yuan per cup and sometimes even heavily discounted with vouchers, squeezing margins across the industry. Luckin's store operating margin plunged from 25% in early 2023 to 7% a year later – in effect, Luckin traded short-term profits for market share, a classic scalability strategy to cement its dominance, albeit at a cost. 

The strategy proved to be a working one. 

In doing so, Luckin locked in customers, cemented brand loyalty and priced foreign competitors out of the everyday market. 

Coffee in China was no longer a treat; it became a habit.

Coffee market with Chinese characteristics

Domestic chains have not simply copied the Western coffee playbook – they have rewritten it for local tastes, introducing quirky local flavors that largely appeal to young consumers.

Sparkling apple Americanos, coconut-based lattes and seasonal drinks built around Chinese ingredients are some of these country-specific products often seen in local chains.

The most vivid example, Luckin's collaboration with Moutai to produce a famous Chinese liquor Moutai latte sold 5.42 million cups on its first day, with revenues exceeding 100 million yuan, according to Luckin's own investor communications. 

China is also quietly developing its own coffee supply chain. Yunnan Province produces around 95% of China's domestic coffee – the remaining 5% being farmed in Fujian, Hainan, and Sichuan – with output growing from around 105,000 bags in 1990 to an estimated 1.9 million bags in 2024/25, as Global Coffee Report points out. Farmers are experimenting with specialty varietals like Geisha and Yellow Bourbon, and Starbucks, Luckin, and Cotti are all sourcing locally.

The numbers still have room to grow. The China coffee market generated revenue of $3.3 billion in 2025 and is expected to reach $5.4 billion by 2033, US-based Grand View research estimates. And although annual per capita consumption in China remains a fraction of what it is in South Korea, Japan, or the United States, if it ever reaches global averages, China would become the world's single largest coffee market, overtaking the US.

Whether or not that happens, the trajectory is clear: coffee culture in China is no longer a foreign borrowed concept. 

China has now curated its own coffee culture with uniquely Chinese characteristics.

Editor's note: Zaruhi Poghosyan is a multimedia editor at CGTN Digital. This backgrounder follows Langyuan Station Coffee Festival: A microcosm of global coffee culture landing in Beijing as a snapshot behind a larger picture.