Coffee Machines in China. People worldwide drink a total of 7.4 billion cups of coffee every year, and 20 million cups of coffee are consumed every day. On average every coffee drinker drinks an average of 120 cups annually. The Finns drink the most coffee with the average Finn drinking 1459 cups of coffee a year. Although the average Chinese person only drinks 5 cups of coffee a year, the Chinese coffee market has experienced tremendous growth. The annual growth rate of coffee consumption is 2%, whereas coffee consumption in China is growing at a rate of 30% annually. With such growth rates and a large population, China is projected to become a major coffee-consuming country.
The Chinese urbanites accounted for the largest proportion of Chinese coffee consumption and established brands such as Starbucks and Costa Coffee are all expanding their business in major cities such as Beijing and Shanghai. However, as coffee has penetrated Chinese cities and become a part of urbanites daily consumption habits, two recent trends has come to fruition.
Firstly, as the Chinese pallet has become used to the taste of established brands by Starbucks and Costa Coffee, many Chinese coffee drinkers are demanding new blends and different tastes. Secondly, as many Chinese urbanites crave caffeine throughout the day, they purchase premium coffee machines to satisfy their demand. The impact of these two trends on the Chinese coffee market will be discussed in this article.
New Blends – Chinese Consumer Crave New Tastes and Experiences
As Chinese coffee drinkers become used to the taste of established brands, such as Starbucks, they crave fresh coffee-drinking experience. This has given room to smaller coffee businesses to offer customized coffee tastes and blends. The Coffee Academics is Hong-Kong’s self-proclaimed coffee pioneer, and it offers a customized blend, mixed after a detailed personal consultation and delivered to your door. You drop by one of their two outlets on the island. Then you fill out a comprehensive questionnaire. You have to answer questions such as “which alcoholic beverage do you prefer?”, “do you smoke?” etc. A barista then analyses your response and suggest an ideal blend, made up of 20 different kinds of beans from across the globe, from Panama to Puerto Rico, and Costa Rica to Colombia. Afterward, your personal mix is roasted, packaged, and ready to drink ten days later.
Premium Coffee Machines – Satisfying Chinese Coffee-Addicts
Many Chinese urbanites have gotten used to drinking coffee, so much so that many Chinese businesses in major cities have purchased coffee machines in order to fuel their workers with the caffeine they need to work well. There are even some Chinese urbanites who have gone so far as to purchase coffee machines for their domiciles. The market for espresso machines in China is projected to grow. According to Business Wire, with the rise of the purchasing power of the Chinese middle class, there is an increase in demand for good quality coffee. According to a market research report by Prof Research Reports, a market research firm, the demand for espresso coffee machines is projected to increase to 2019. On China, the market for coffee machines is fragmented. For instance, Xiangyin Industrial Corporation, Changzhou Pilot Electronic Corporation, Zhanjiang Sapoe Drink Systems Manufacturing, Sunbird Technology Development Corporation and so forth, all offer their espresso machines to Chinese consumers. This suggests that there are a lot of opportunities to enter the Chinese coffee machine market with customized offerings to different niche segments.
A different marketing strategy is likely to have to be adopted when focusing on premium coffee machines. This stems from the reason as to why Chinese consumers are demanding premium coffee machines, which is that they crave high-quality coffee whenever they’d like. Hence firms should focus on building relationships with their client base, to learn and understand what kind of taste Chinese consumers desire and yearn for. This can easily be done by linking your marketing strategy with e-commerce, and traditional social media platforms such as WeChat. Such relationships can serve as a basis for a sustainable competitive advantage, that can be leveraged as the market matures and consumers become more price sensitive.
In conclusion, new blends and premium coffee machines in China are in high demand. This is because many Chinese consumers are bored with the standardized offerings of established chains such as Starbucks and Costa Coffee. Moreover, as many Chinese coffee drinkers crave more convenient and continual access to high-quality coffee, they have increasingly started looking to premium coffee machines to satisfy their needs for caffeine.
Case Study: Coffee machines in China
A prominent Korean coffee processor was seeking to expand into the Chinese market. The client’s company is involved in coffee processing and packaging as well as coffee machine manufacturing and distribution. They contacted Daxue Consulting to do a market overview, competitor benchmarking analysis, brand awareness study, and targeting research for an upcoming communication campaign. Daxue Consulting also conducted extensive sourcing research for the client, and we helped the client to develop particular distribution channels. We also developed a full and comprehensive communication strategy for the customer.
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