Focus on the Coffee Market in China
Wangjing, an area in the northeast of Beijing, is one of the biggest Korean districts in China. It is known for its mixture of Korean culinary experiences. In recent times, however, coffee has become a prominent commodity sold and it is now a testing area for the Korean coffee market in China. In fact, it is so competitive it is more of a battleground, with all brands vying for the holy grail of successfully scaling throughout the Chinese mainland. Although Chinese citizens traditionally indulge in tea rather than coffee, it is believed a new coffee market might be blossoming among China’s youth. Indeed, Daxue Consulting has estimated that the coffee market in China has been growing around 30% per year since 2007 and that there are margins for potential growth.
Noteworthy is that many of the Korean brands have made concerted efforts to adapt their stores to the requirements of Chinese consumers. They have recognized that many Chinese consumers are not used to drinking coffee and consequently they spend more time in stores and order snacks. Accordingly, Korean outlets have varied menus and are cozy environments. Meanwhile, different brands have taken contrasting entries into the market. C. J. Foodville, who own Twosome Coffee, have been relatively cautious in the face of an immature market, opening stores slowly. Indeed, this has been the approach of Starbucks who entered the Chinese market in 1999 and only had 1000 stores across 60 cities by late 2013. Caffe Bene, however, has been far more aggressive and amounted 100 stores by the end of 2013 after opening in 2012. Furthermore, they plan to have 1 500 stores by 2015, according to the company’s website. With the coffee market growing in China, it will be interesting to see whether the market continues to expand or stagnates. It will be equally interesting to track which market strategies are most effective.
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