SUBSCRIBE TO CHINA
Today’s market sees international students, traveling businessmen, and savvy youth driving China’s coffee boom. Coffee sales are expected to rocket up by 15 to 20 percent annual growth, mainly due to patronization of Chinese domestic outlets selling expensive mugs of coffee. This is all despite the fact that China at large remains a marginal coffee drinker and producer, with consumption only around 30-35,000 tons of beans per year. That levels out to only three cups per person per year.
Consumers in China want more than just a simple cup of hot brown liquid. Coffee culture is more of a status symbol for the new middle classes, not emphasizing enjoyment of the actual drink. Krista Pederson, a consultant at WGP Investment Consulting in Shanghai, told the Wall Street Journal that “to carry around a Starbucks cup or to meet in a Costa Coffee is to mark yourself as having status.” Many Chinese customers order a coffee to show their modernity and cosmopolitanism, and coffee houses offer them that opportunity on a stylish couch.
For Westerners, coffee is utilitarian, part of a daily routine. For the Chinese, that’s tea. The Chinese don’t expect the blends and flavors expected in American houses - they want an experience. Chinese want to be pampered to; they want to be seen in coffee houses. Many want more than a simple drink; they demand a comfortable, fashionable environment to talk with friends, to see and be seen, to relax and enjoy the afternoon.
When Starbucks was first introduced to Shanghai in the 1990s, it was introduced as a “European” coffee experience to differentiate it from the other chains already present in China. While up to 80 percent of American Starbucks orders are to go, in China more customers want to sit back and relax. To combat this, Starbucks added more seating and food. The strategy has been an overwhelming success, but at present China remains a traditional tea market: statistics show that the average Chinese guzzler only knocks back three cups of coffee per year.
Sitting around all day doesn’t bring a lot of business, nor does it attract a lot of appreciation for the taste. A lot of this stems from misunderstanding of what coffee is beyond something that overseas people seem to enjoy: you don’t make coffee by pouring hot water on top of a mug full of beans. Some coffee shops, including Starbucks, are beginning to hold “coffee appreciation classes,” lecturing on the delicate flavor of a roast from Java or Peru.
Independent shops, such as Horst Cafe in Fengtai District, try to promote the drink by savoring its flavors, whether flowery, fruity, chocolaty, or nutty. Horst has provided classes for more than 15,000 young drinkers, teaching them to enjoy every drop. These classes are helping to push coffee up to be accepted by more and more Chinese. Big cities such as Beijing and Shanghai have seen an enormous increase of coffee shops.
None of these shops are trying to replace tea, if such a task is possible at all. To the uninitiated, coffee might seem to make a grande impression on the environment. Even though the cost of a latte continues to rise, with a price currently higher than that of Starbucks’ in the United States, coffee is here to stay. But in China, Starbucks’ greatest sales are tea and tea drinks. It took a few tries, but by reevaluating how they did business with Chinese Starbucks was able to finally push a profit. Though tea might not be going away any time soon, it may not necessarily be served in a teahouse. It’ll be next to a cup of joe.