Tag Archives: coffee

“Something’s Brewing” (Literally) In China

Popularity Of Coffee In the Chinese Market Leads To Rapid “Luxurification” Of The Standard American Coffee Shop

Chinese coffee chains like Ming Tien tend to promote their food and coffee in equal measures, but their comparatively high prices make it difficult for them to rival juggernauts like Starbucks

Chinese coffee chains like Ming Tien tend to promote their food and coffee in equal measures, but their comparatively high prices make it difficult to rival juggernauts like Starbucks

While any visitor to China’s biggest cities will quickly become accustomed to seeing familiar sights like Starbucks on virtually every corner, until recently coffee has remained something of a luxury in the world’s most populous  nation. Although tea has reigned supreme in China for thousands of years, after 30 years of internationalization the country has opened up to new beverages at a never-before-seen rate: whiskey has become the drink of choice for many of China’s business and political elite, Chinese collectors are snapping up prize bottles at fine wine auctions, China consumes more beer than any other country on earth, soft drink companies like Coca-Cola lean on their reliable China profits, and now coffee is quickly becoming less of a niche drink and more of a daily necessity for millions of Chinese.

Though coffee is less widely consumed in China than other beverages, Chinese coffee chains have multiplied in number in the last 20 years, with large mainland companies like Ming Tien Coffee Language and Taiwan’s UBC Coffee becoming somewhat ubiquitous even in smaller second- and third-tier cities that are less westernized than Beijing, Shanghai or Guangzhou. China International Business today looks into the sustainability of this growing interest in coffee in China, and how companies like Starbucks and other major foreign chains have capitalized on their “foreignness” to promote coffee as a sophisticated, “western” drink that stands in stark contrast to tea:

According to the April 2009 Euromonitor International Report, the total volume of coffee sold in China grew over 10% in 2008, a hefty figure compared to the world average of roughly 2%, and Starbucks — which opened their first Chinese mainland coffee shop in 1999 in Beijing — isn’t the only one leading the charge, far from it in fact.

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Knowing Your Market: Entrepreneurs Creating “Affordable Luxury” In China

Companies Appeal To Wider Range Of Customers With Affordable Yet Upscale Offerings

Taiwanese bakery chain 85c has successfully blended global luxury with prices and products that Chinese consumers find most appealing

Taiwanese bakery chain 85c has successfully blended global luxury with prices and products that Chinese consumers find most appealing

Although we tend to focus on the higher-end luxury market, occasionally we notice an interesting news item coming out of the Greater China region that puts a distinctly Chinese spin on luxury. While Chinese luxury brands are still the underdog in their home market — particularly for fashion items or automobiles — coffee shops and bakeries often have a home-court advantage in China. Although Starbucks has had huge success in the Chinese market, opening over 350 stores and projecting that number to double in the next 10 years, home-grown entrepreneurs from Taiwan and the mainland are getting more creative in their approach to “luxury” foods and drinks. While it may be odd to think of a chain like Starbucks being considered “luxury,” in China, these foreign chains mainly draw well-to-do urban youth or professionals rather than high-school kids.

85c, a Taiwan-based coffee and bakery chain, has tried to bridge the gap between the cosmopolitan and the everyday through what it calls “Low Price Luxury” (平价奢华) or “Affordable Luxury,” a concept that has helped the chain expand throughout Taiwan and the mainland, and even into the Australian and US markets. In an interview with CHaINA magazine, 85c’s Assistant General Manager Peter Zhu explains the idea of “Low Price Luxury”:

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