Page 296 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
Coffee Alcoholic Beverages
Starbucks is the reigning king of a tea-drinking The spirits market in China is flourishing as the
country that only relatively recently discovered income level of Chinese consumers is increasing.
the joys of java. The Seattle-based coffee chain High-end spirits are common guests on Chinese
holds just over half of the Chinese coffee and tables. Local spirit of China still dominates the
specialty tea market. But the growth opportunities Chinese spirits market, but western spirits like
are huge. In just four years, China’s specialty tea whiskey and brandy are gaining traction. Western
and coffee market has grown from US$2.7 billion alcohol culture is becoming popular among the
in revenues to US$4.8 billion. The market is still younger generation, and the rise of e-commerce
diffuse, as well. The next-biggest competitor to platforms enable western spirits brands to
Starbucks, the McDonald’s-owned McCafe, has enter China’s alcoholic beverage market more
just 5 percent of the market (Stevenson). It’s no easily. Nevertheless, the regulations of China’s
exaggeration to say that Starbucks is the main alcoholic beverage market suffered changes for
reason why coffee is fast supplanting tea as the a long time, and the legislative body has still not
beverage of choice for China’s harried urban reached consensus on how to regulate alcoholic
residents. More than 3,700 Starbucks outlets have drinks in China. Spirits in China are consumed
opened across the world’s number two economy, differently than in the west. For Chinese Baijiu,
with a new store popping up every 15 hours or it is almost always drunk straight. This method
so. The firm aims to have 6,000 sites in China by was not suitable to other western spirits for
2023, and sees the world’s populous nation as a most Chinese consumers are not accustomed
main avenue of growth given market saturation in to the flavors of western spirits, and therefore
the US. Many Western chains are now betting big bars and night clubs mainly produced cocktails
that China’s demand for coffee will only increase. rather than serving shots. But currently, Chinese
There’s reason to be optimistic on that front. The consumers are trying to take western spirits in the
Chinese on average currently drink two cups of same way as Chinese Baijiu. Single malt Whisky,
coffee every year—in Italy it’s 700—and so even for example, is becoming a new favorite in bars.
a marginal uptick across China’s 1.4 billion people Chinese liquor consumers are younger compared
could herald profits galore. Of course, there’s a to other countries. Whiskey brands have already
chance consumption could plateau, but in coffee’s noticed this trend and adopted the corresponding
corner is that it’s an addictive beverage and China tactic to attract young consumers group. First-
is urbanizing fast (Campbell). tier cities like Beijing, Shanghai, Guangzhou,
and Shenzhen have bars specialize in providing
Coffee in China is truly one of the world’s greatest single malt whiskey to Chinese consumers.
retail growth opportunities. Coffee sales in are Many international brands are targeting young
expected to grow significantly to 5.5 cups per capita consumers by building fashionable images since
per year in 2023. The market has grown from 15.6 they have enormous consuming potential and
billion yuan in 2013 to 56.9 billion yuan in 2018, and willing to pay for fashionable lifestyles (Noël).
is estimated to reach 180.6 billion yuan in 2030. This
growth represents a 25 percent compound annual 2019 was a tough for the Chinese wine market
growth rate from 2018 to 2023, according to Frost & – imported volumes decreased 8 percent, marking
Sullivan. “We believe a faster pace of life, changing the first decline in five years. Consumers are
consumer habits (younger generation adopting a drinking less frequently, but that’s not the whole
western lifestyle) and increasing disposable income story. While the market is maturing, it’s also
will continue to drive the growth of the coffee market changing – opening up new opportunities at the
in China,” Credit Suisse’s Tony Wang said in a note to same time. Imported wines account for about
clients (Fitzgerald). 40 percent of the Chinese market. The growth in
consumers have slowed. Per capita consumption
in 2018 was 1.2 liters in 2018 compared to 1.3 the
liters the previous year. However, consumers are
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Coffee Alcoholic Beverages
Starbucks is the reigning king of a tea-drinking The spirits market in China is flourishing as the
country that only relatively recently discovered income level of Chinese consumers is increasing.
the joys of java. The Seattle-based coffee chain High-end spirits are common guests on Chinese
holds just over half of the Chinese coffee and tables. Local spirit of China still dominates the
specialty tea market. But the growth opportunities Chinese spirits market, but western spirits like
are huge. In just four years, China’s specialty tea whiskey and brandy are gaining traction. Western
and coffee market has grown from US$2.7 billion alcohol culture is becoming popular among the
in revenues to US$4.8 billion. The market is still younger generation, and the rise of e-commerce
diffuse, as well. The next-biggest competitor to platforms enable western spirits brands to
Starbucks, the McDonald’s-owned McCafe, has enter China’s alcoholic beverage market more
just 5 percent of the market (Stevenson). It’s no easily. Nevertheless, the regulations of China’s
exaggeration to say that Starbucks is the main alcoholic beverage market suffered changes for
reason why coffee is fast supplanting tea as the a long time, and the legislative body has still not
beverage of choice for China’s harried urban reached consensus on how to regulate alcoholic
residents. More than 3,700 Starbucks outlets have drinks in China. Spirits in China are consumed
opened across the world’s number two economy, differently than in the west. For Chinese Baijiu,
with a new store popping up every 15 hours or it is almost always drunk straight. This method
so. The firm aims to have 6,000 sites in China by was not suitable to other western spirits for
2023, and sees the world’s populous nation as a most Chinese consumers are not accustomed
main avenue of growth given market saturation in to the flavors of western spirits, and therefore
the US. Many Western chains are now betting big bars and night clubs mainly produced cocktails
that China’s demand for coffee will only increase. rather than serving shots. But currently, Chinese
There’s reason to be optimistic on that front. The consumers are trying to take western spirits in the
Chinese on average currently drink two cups of same way as Chinese Baijiu. Single malt Whisky,
coffee every year—in Italy it’s 700—and so even for example, is becoming a new favorite in bars.
a marginal uptick across China’s 1.4 billion people Chinese liquor consumers are younger compared
could herald profits galore. Of course, there’s a to other countries. Whiskey brands have already
chance consumption could plateau, but in coffee’s noticed this trend and adopted the corresponding
corner is that it’s an addictive beverage and China tactic to attract young consumers group. First-
is urbanizing fast (Campbell). tier cities like Beijing, Shanghai, Guangzhou,
and Shenzhen have bars specialize in providing
Coffee in China is truly one of the world’s greatest single malt whiskey to Chinese consumers.
retail growth opportunities. Coffee sales in are Many international brands are targeting young
expected to grow significantly to 5.5 cups per capita consumers by building fashionable images since
per year in 2023. The market has grown from 15.6 they have enormous consuming potential and
billion yuan in 2013 to 56.9 billion yuan in 2018, and willing to pay for fashionable lifestyles (Noël).
is estimated to reach 180.6 billion yuan in 2030. This
growth represents a 25 percent compound annual 2019 was a tough for the Chinese wine market
growth rate from 2018 to 2023, according to Frost & – imported volumes decreased 8 percent, marking
Sullivan. “We believe a faster pace of life, changing the first decline in five years. Consumers are
consumer habits (younger generation adopting a drinking less frequently, but that’s not the whole
western lifestyle) and increasing disposable income story. While the market is maturing, it’s also
will continue to drive the growth of the coffee market changing – opening up new opportunities at the
in China,” Credit Suisse’s Tony Wang said in a note to same time. Imported wines account for about
clients (Fitzgerald). 40 percent of the Chinese market. The growth in
consumers have slowed. Per capita consumption
in 2018 was 1.2 liters in 2018 compared to 1.3 the
liters the previous year. However, consumers are
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