China’s coffee market is projected to reach a staggering RMB 1 trillion in 2025. This rapid growth, however, also comes with intensifying competition. In addition to well-known domestic coffee brands and international coffee chains, even tea-focused brands like Mixue Ice Cream & Tea (蜜雪冰城) have entered the coffee market with their own freshly ground coffee brand, Lucky Cup (幸运咖). With approximately 3,000 outlets, Lucky Cup has priced its main products as low as RMB 5 to 10.
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Decoding coffee price plunge in China
This intense competition is further exemplified by a recent trend known as “早C晚A ,” signaling a cultural shift where coffee in the morning and alcohol at night have become increasingly popular among young professionals. This trend triggered a heated discussion in the 3rd week of April on Weibo in terms of #why is coffee becoming cheaper as it sells more# (咖啡为什么越卖越便宜), garnering over 220 million views.
Dynamics behind falling coffee price in China
According to our recent survey results from Chinese residents, the declining coffee prices can be attributed to two main reasons. For one thing, many Chinese coffee consumers prioritize convenience over quality. Despite an emphasis on coffee quality, our survey indicates a preference for instant coffee and bottled coffee over freshly made coffee in a coffee shop. For another, the younger demographic, particularly Gen Z, shows heightened price sensitivity. While older coffee drinkers value unique flavors and innovations, younger consumers prioritize price, environment, and location, contributing to the downward pressure on coffee prices.
In response to this, many netizens shared their views under the hashtag. Some suggested that lower prices enable more consumers to afford coffee, while others indicated a reluctance to purchase coffee priced above RMB 10. A netizen from Hainan even humorously remarked, “Is the coffee industry running a rat race now as well?”
Brewing battles: The dynamics of falling coffee prices in China
- The coffee market in China is heating up. Traditional and unexpected players like Mixue Ice Cream & Tea entered the fray with low-priced offerings.
- The rise of the “早C晚A” trend, where coffee in the morning and alcohol at night gain popularity. This highlights the changing consumer habits and preferences, especially among younger consumers.
- Survey results indicate that declining coffee prices in China are driven by consumer priorities. The emphasis on convenience and price sensitivity among younger demographics shaped market dynamics. As such, netizens debate the impact of affordability on industry competitiveness.
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China’s coffee market is a dynamic sector, influenced by shifting consumer preferences, technological advancements, and evolving dining habits. Daxue Consulting offers expert market research in China, providing in-depth insights into the trends and challenges shaping the F&B industry.
Our comprehensive consumer understanding helps businesses refine their offerings and craft effective marketing strategies to resonate with local diners. Through our consulting services, we guide you to leverage emerging opportunities and navigate the competitive landscape. Reach out to us today to discover how our expertise can drive your coffee business’s success in China.
