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Coffee Houses - China - December 2015

Published By :

Mintel

Published Date : Dec 2015

Category :

Beverages

No. of Pages : N/A

Given the relatively low consumption per capita of coffee drinks compared to the global level, coupled with the confidence demonstrated by international coffee chains to further penetrate China, there is strong evidence for promising growth for the coffee shop market. However, specialist coffee house operators should avoid being over-optimistic as they are facing fierce challenges from bakery and fast food chains with cheaper alternatives.

To justify the premium image, the ability to create menus with a healthy twist, the use of coffee beans from specific regions, and multifunctional store design are the core strategies.

Table of Content

Overview

Definition
Methodology

Executive Summary

The market
Figure 1: Total value sales of coffee houses in China, 2010-20
Companies and brands
Market becoming increasingly consolidated towards international chains
Figure 2: Market share of leading companies in the coffee shop market in China, 2013 and 2014
Who’s innovating?
The consumer
Four different types of coffee house consumers
Figure 3: Target group of attitudes towards coffee houses, September 2015
The importance of ambience and location
Figure 4: Attitudes towards coffee houses, September 2015
Threat from bakery and fast food chains
Figure 5: Changes in spending on freshly made coffee at different venues in the last six months, September 2015
The importance of afternoon tea innovation
Figure 6: Occasions of visiting specialist coffee houses in the last six months, September 2015
Perception of different specialist coffee houses
Figure 7: Elements associated with different specialist coffee houses, September 2015
Food enticement
Figure 8: Interests in coffee shop menus, September 2015
The scope for coffee shops designed for working and studying purpose
Figure 9: The top three most appealing features at coffee houses, September 2015
What we think

Issues and Insights

Where are different chains standing currently?
The facts
The implications
How to attract new coffee houses adopters against bakery and fast food chains
The facts
The implications
Adding experience, ethical and cultural elements for coffee house enthusiasts
The facts
The implications

The Market – What You Need to Know

Will the Chinese coffee shop market be able to sustain robust growth in the next five years?
How has the rise of bakery chains changed the game?
What is the future for coffee chains?

Market Size and Forecast

Consumers’ increasingly sophisticated tastes encourage the expansion of coffee chains
Figure 10: Total value and volume of coffee shops, China, 2013 and 2014
The forecast
Figure 11: Total value sales of coffee houses in China, 2010-20
Figure 12: Total volume of coffee shops in China, 2010-20

Market Drivers and Barriers

Upgraded tastes in packaged coffee flavours helps the development of coffee shops
Figure 13: Total retail share of coffee, by segment, China, 2012-14
Future demand for experiential consumption is growing at a strong pace
The impact of the economic slowdown
Possible threat from cheaper alternatives

Market Segmentation

The share of chains is getting more powerful
Figure 14: Segment performance of coffee houses market in China, 2010-14
Independent coffee houses fail to shine
Figure 15: Segment performance of the coffee shop market in China, 2010-14

Key Players – What You Need to Know

Domestic chains are facing difficult situation
Starbucks is the leader for innovation
The scope for collaborating with art and culture events

Market Share

Market becoming increasingly consolidated towards international chains
Figure 16: Market share of leading companies in the coffee shop market in China, 2013 and 2014
Market headwind for domestic coffee chains

Who’s Innovating?

Special afternoon tea set with fashion labels
Product crossover and luxury brands invasion
Eco-friendly campaigns
Greater consumer involvement in coffee making process
Art and culture-related events to boost sophistication
Expanding alcohol beverage selection and alcohol inspired innovation

The Consumer – What You Need to Know

The profile of four main types of coffee house consumers
Men in the 20s spend more on both international coffee chains and fast food chains
The demand for afternoon tea occasions is high
Multifunctional store design provides greater incentives for non-frequent coffee shop users to visit

Four Different Types of Coffee House Consumers

Figure 17: Target group of attitudes towards coffee houses, September 2015
Disengaged
Demographics
Figure 18: Disengaged target group of attitudes towards coffee houses, by demographics, September 2015
Characteristics
Copying the Affluent
Demographics
Figure 19: Copying the Affluent target group of attitudes towards coffee houses, by demographics, September 2015
Characteristics
Non-Mainstream Aspirants
Demographics
Figure 20: Non-Mainstream Aspirants target group of attitudes towards coffee houses, by demographics, September 2015
Characteristics
Classic Affluent
Demographics
Figure 21: Classic Affluent target group of attitudes towards coffee houses, by demographics, September 2015
Characteristics

Attitudes towards Coffee Houses

Three key attitudinal indicators
Figure 22: Attitudes towards coffee houses, September 2015
The importance of ambience and location
Figure 23: Attitudes towards coffee houses, by gender and age, and monthly personal income, September 2015
Experiential consumption
Figure 24: Interests in special features at coffee houses, by clusters, September 2015

Spending on Freshly Made Coffee at Different Venues

Threat from bakery and fast food chains
Figure 25: Changes in spending on freshly made coffee at different venues in the last six months, September 2015
Figure 26: Changes in spending on freshly made coffee at different venues in the last six months, by gender and age, and monthly personal income, September 2015
The growth of independent coffee houses is facing a bottleneck
Figure 27: Changes in spending on freshly made coffee at different venues in the last six months, by gender and age, September 2015

Occasions of Visiting Specialist Coffee Houses

The importance of afternoon tea innovation
Figure 28: Occasions of visiting specialist coffee houses in the last six months, September 2015
Figure 29: Occasions of visiting specialist coffee houses in the last six months, by clusters, September 2015
Catering for men during working hours
Figure 30: Occasions of visiting specialist coffee houses in the last six months, by gender and age, September 2015

Perceptions of Different Specialist Coffee Houses

Correspondence map – Methodology
Where do Western, South Korean, Chinese coffee chains and independent cafés stand?
Figure 31: Elements associated with different specialist coffee houses, September 2015
European and American coffee chains have a classic premium image
South Korean coffee chains maintain casual relaxed positioning
Independent coffee houses share similar attributes to South Korean coffee chains
How can domestic coffee chains survive?

Menu Enticements at Coffee Shops

Justify the innovator for healthy menus
Figure 32: Interests in coffee shops' menu enticement, September 2015
Food enticements
Figure 33: Menu enticement at coffee shops, by clusters, September 2015
Drink enticements
Figure 34: Menu enticement at coffee shops, by clusters, September 2015

Interest in Special Features at Coffee Houses

The scope for coffee shops designed for working and studying
Figure 35: The top three most appealing features at coffee houses, September 2015
Figure 36: Interests in special features at coffee houses, by clusters, September 2015
Non-mainstream coffee shop users embrace mini-market format
Figure 37: Interests in special features at coffee houses, by clusters, September 2015
Leverage ethical and luxury elements for the affluent
Figure 38: Interests in special features at coffee houses, by clusters, September 2015

CHAID Analysis

Methodology
Environmentally friendly design soars among culturally sophisticated consumers
Figure 39: Coffee houses – CHAID – Tree output, September 2015

Meet the Mintropolitans

Why Mintropolitans?
Who are they?
Mintropolitans predominantly appreciate relaxation activities in coffee shops
Figure 40: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
Figure 41: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
Figure 42: Occasions of visiting specialist coffee houses in the last six months, By Mintropolitans vs Non-Mintropolitans, April 2015

Appendix – Market Size and Forecast

Forecast methodology

List of Table

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