China’s Specialty Coffee Market: A Rapidly Expanding Industry

The latest research on China’s specialty coffee market reveals an industry in transformation. The report highlights the increasing integration of coffee into daily routines, the rise of local production, and the ongoing shift in consumer preferences. With market size expected to reach 279 billion RMB in 2024, specialty coffee has emerged as a key player in China’s fast-growing coffee landscape​.

Coffee Shops Flourishing Across Major Cities

As of August 2024, China boasts 68,000 specialty coffee outlets, comprising nearly 28% of all coffee establishments nationwide. Major urban hubs such as Shanghai, Beijing, and Shenzhen lead in terms of store density and consumer engagement, with individuals spending an average of 38 RMB per coffee visit. This regional boom underscores both the urban consumer culture and the expanding influence of coffee consumption beyond traditional commercial coffee brands​.

Four Emerging Trends Shaping the Market

The study identifies four transformative trends influencing the specialty coffee sector:

1. Scaling and Localization: Specialty coffee brands are focusing on scalable business models and branching out to second- and third-tier cities, ensuring wider availability through efficient supply chains and partnerships. For instance, Manner Coffee opened over 250 new locations in 2024, demonstrating this growth strategy​.
2. Fusion and Innovation: Coffee brands are merging with other consumer experiences, including art, fashion, and gastronomy. New coffee varieties featuring lychee, chrysanthemum, and even medicinal herbs reflect the fusion trend, enhancing product differentiation.
3. Rise of Local Coffee Brands: Chinese specialty coffee companies are embedding cultural narratives into their products. Brands emphasize local coffee beans from Yunnan and integrate Chinese aesthetics into store designs. These efforts aim to “domesticate” coffee, traditionally seen as a Western drink, by telling Chinese stories through flavor and branding​.
4. Everyday Consumption: Specialty coffee has transitioned from being an occasional luxury to a daily habit. Survey data reveals that 78.7% of consumers drink coffee weekly, often seeking functional benefits like energy boosts during work or relaxation in the afternoon​.

The Critical Role of Yunnan Coffee Production

Yunnan, often referred to as China’s coffee heartland, has spearheaded efforts to produce high-quality beans. Notably, Menglian County stands out for its 62% specialty-grade coffee rate in 2023/2024, affirming its status as the “First County of Specialty Coffee” in China. With improved farming techniques, the county’s coffee production exemplifies the local industry’s emphasis on sustainability and high-quality, traceable beans. These efforts position Yunnan as a competitive player in the global coffee market​.

Market Growth Driven by Affordable Pricing

Another factor driving the popularity of specialty coffee is price accessibility. Brands such as Tili Coffee are setting new benchmarks by offering hand-brewed coffee for under 10 RMB, making premium coffee accessible to a broader audience. This approach not only widens the consumer base but also elevates competition with mainstream coffee chains​.

Conclusion: A Market Poised for Further Growth

The specialty coffee market in China is evolving at a rapid pace, with diversified product offerings, regional expansion, and cultural localization serving as catalysts for its growth. As more consumers embrace coffee as part of their daily lifestyle, the line between commercial and specialty coffee continues to blur. With a focus on high-quality production and sustainable practices, the future of specialty coffee in China appears both dynamic and promising, reinforcing the country’s growing influence in the global coffee scene.

This transformation is not only about changing tastes but also reflects China’s ambition to redefine coffee culture on its own terms. From Yunnan’s expanding coffee farms to Shanghai’s chic coffee boutiques, China is brewing a new coffee era that balances tradition with modern innovation.