‘cof­fee cats’


of the more than 4,000 cof­fee shops in Shang­hai, whose pop­u­la­tion of 25 mil­lion con­sume 20 cups of cof­fee per capita each year on av­er­age.

Statis­tics from the China of­fice of Euromon­i­tor, a Lon­don-head­quar­tered mar­ket re­search firm, show that to­tal cof­fee sales at stores in Shang­hai hit 20 bil­lion yuan ($3.2 bil­lion) in 2013, dou­ble the rate of 2008. It is ex­pected to dou­ble again by 2017.

Cof­fee sales at Korean cafes on the out­skirts of Shang­hai and in nearby sec­ond — and third — tier cities have also rapidly been gain­ing trac­tion.

Com­mer­cial prop­erty agent RET Prop­erty es­ti­mates there have been 600 new open­ings of Korean cafes in China in the last two years.

This seems like a con­ser­va­tive guess, as Caffe Bene alone has con­trib­uted nearly 600 new open­ings since en­ter­ing the Chi­nese mar­ket in late 2012.

One of the ad­van­tages Korean cafes boast is the va­ri­ety of of­fer­ings on their menus, adding items like waf­fles, pancakes and milk shakes. Most cof­fee shops of­fer fewer than 40 items. Korean stores ramp this up to around 70.

Most of Caffe Bene’s out­lets are fran­chised to lo­cal part­ners, rais­ing con­cerns among in­dus­try ex­perts of how to main­tain stan­dards. But Korean cafes are ex­pand­ing rapidly, due in part to their en­dorse­ment by popular K-pop stars, a trend that is likely to re­shape the in­dus­try in China and weaken the strong­hold of West­ern cof­fee chains.

But no com­pany is yet to ri­val Star­bucks, the first for­eign cof­fee chain to open an out­let in China, which it did in 1999. It now has over 1,600 stores in more than 80 Chi­nese cities, a num­ber un­matched by any of its ri­vals.

Its take­away cups have even be­come a stylish ac­ces­sory among the up­wardly mo­bile in China’s big cities. On Taobao.com, China’s largest on­line shop­ping mar­ket, copy­cat cups sell for 10 times the price of regular white Sty­ro­foam cups. Top stores on the site claim they can shift 30,000 units a month. Shop­pers can also buy its green straws, brown pa­per bags and card­board sleeves.

Ac­cord­ing to Star­bucks CEO Howard Schultz, the com­pany will con­tinue to in­crease its pres­ence in China, its sec­ond-largest mar­ket af­ter North Amer­ica. At least an­other 200 new stores are planned for the sec­ond half of this year, or more than one a day, Schultz said last month.

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