China, a nation of tea-drinkers, now has more branded coffee shops than the US

By Diksha Madhok, CNN

(CNN) — China has overtaken the United States as the biggest branded coffee shop market in the world by outlets, according to a report by World Coffee Portal.

The number of branded coffee shops in the world’s second largest economy grew by 58% over the past 12 months to reach 49,691 outlets, the research firm said this week.

Starbucks opened 785 outlets in the country during the period and is its second largest branded coffee operator by outlets, World Coffee Portal added. Luckin Coffee, the Chinese startup that became mired in a fraud scandal and was kicked off Wall Street three years ago, is the country’s biggest coffee chain with over 13,000 outlets.

“More than 90% of 4,000 Chinese coffee shop consumers surveyed drink hot coffee weekly, while 64% consume iced coffee at least once a week,” World Coffee Portal said in a statement Tuesday.

It said nearly 90% of consumers surveyed visit or order from a coffee shop at least once a week.

China has become a global coffee industry powerhouse, despite grappling with numerous economic problems in recent years.

Earlier this year, Starbucks poured more than $200 million into a new campus in the eastern part of the country. At the time of opening in September, the beverage giant said it was the largest investment it has ever made for a coffee manufacturing and distribution center outside the United States.

China has long been one of the most important growth drivers for Starbucks, serving as its second biggest market worldwide and top overseas market.

But CEO Laxman Narasimhan says the company is “still in our early days in China,” noting that coffee consumption in the historically tea-drinking nation remains relatively low.

The US coffee chain is targeting 9,000 stores in China by 2025, World Coffee Portal said.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.