China embraces growing coffee culture

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Comfortably sitting on a sofa at a coffee shop in downtown Beijing, 25-year-old Xu enjoys her free time sipping a cup of coffee. Sampling java beans has become one of her favorite ways to spend an afternoon during weekends.

"I like nicely furnished coffee shops. With artistic decorations, soothing music, coffee aromas and the romantic mood, they are the perfect places to go when I need to get away from work stress and the mess in life," she said.

Buying experience, not just products

Xu's preferences and lifestyle are reflective of typical white-collar workers in big Chinese cities. They are developing a taste for the black drink, and embracing a more delicate way of living represented by a growing coffee culture.

It's no wonder that Starbucks, the biggest winner in China’s coffee market, opened on Wednesday its first and largest international roastery and tasting room in Shanghai.

A coffee roaster inside the Shanghai Starbucks Reserve Store. /VCG Photo

Located in Shanghai’s swankiest commercial district, Nanjing West Road, the 3,000-square-foot store combines coffee roasting, manufacturing, education and retail, and aims to stun customers with an "unparalleled experience".

"Women under thirty are moving away from buying Louis Vuitton bags to experiences. And coffee culture is a part of that," Shaun Rein, managing director of China Market Research Group told BBC.

Starbucks has sniffed the new trend long time ago, and invested heavy sums in its store design and services across China.

When asked by Chinese media years ago about the reason it charges higher fees for the same drink in China than in other countries, the company explained that Chinese customers' inclination to stay longer at their stores pushed the rental and labor costs up.

Customers fill the Shanghai Starbucks Reserve Store. /VCG Photo

China’s coffee market expanding at double-digit rates

A 2015 report by the International Coffee Organization (ICO) shows that China’s coffee consumption increased by 16 percent year on year from 2004 to 2014, much faster than the world's average growth of 2 percent.

The ICO compared China’s coffee consumption growth over the decade ending in 2013 with that of Japan 40 years ago, and found a similar tendency. Japan’s growth momentum continued till mid-2000s when it reached over seven million bags and became the world’s fourth-largest coffee consumer.

CGTN Photo

However, an average Chinese person drinks only five cups of coffee per year, far behind the world’s average of 240 cups. With China’s fast urbanization and expanding middle class, many believe the market's potential is yet to be unlocked.

"China represents the most important and exciting opportunity ahead of us," said the chairman of Starbucks Howard Schultz, who expected the Chinese market to surpass that US's at some point.

Since its debut in Beijing in 1999, the company has opened about 3,000 stores in over 130 cities in China. It is targeting 2,000 more outlets in the country over the next five years.

Coffee vs tea

VCG Photo

In a country with a long history of tea culture, the popularity of coffee and Starbucks seemed unlikely at first.

Yet the market hasn’t given birth to a tea house chain giant like Starbucks, even though retail sales of tea still outweigh that of coffee by about 10 to one.

According to Zhu Danpeng, an analyst of China’s food industry, consumers above the age of 45 still go to tea houses, but younger generations prefer coffee bars, which they feel are more stylish.

"Coffee shops are more modern and suits an urban life. Tea houses seem like something outdated,” said Liu, who developed a love affair with coffee bars during his study time in Europe. “But I drink tea at home,” he added.

Zhu also noted that most of the owners of tea houses are traditional men, who lack the business acumen and spirit to achieve something like the empire Starbucks built in the Middle Kingdom.