The Chinese coffee market size is estimated at USD 2.1 billion in 2024. It is projected to reach USD 2.3 billion by 2029, registering a CAGR of 1.90% during the forecast period (2024-2029).
The instant coffee segment held a significant market share owing to its convenience. Moreover, middle-class consumers' rising household expenditure, changing lifestyles, and acceptance of Western cultural trends have increased demand for instant coffee across the country. In line with consumers' growing preferences for coffee over other beverages, instant coffee manufacturers have launched several flavored products to attract a broader customer base. Online retailing has been a minor distribution channel for instant coffee in China for the past few years. It is likely to gain prominence in the market during the forecast period owing to the convenience it provides to consumers. Consumers find it easy to choose their preferred brands from the wide variety of product choices available.
Further, product innovations are expected to aid the market growth during the forecast period. Players are innovating with products to differentiate product offerings and broaden the customer base. For instance, in August 2022, Zhongxuegao, a Chinese brand dubbed the 'Hermès of ice cream' for its premium prices, unveiled a new coffee pop-up product in nearly 600 cafés in China. The products included a blend of Zhongxuegao's almond and yogurt-flavored ice cream with cold-brew coffee, while others added Japanese probiotic milk beverage Yakult or jasmine green tea. Thus, many private-labeled companies launched their versions of coffee RTD cocktail drinks to satisfy the increasing demand for coffee and spirit-based RTD offerings.
The Chinese coffee market is highly competitive, with a strong presence of local and global players. Thus, to sustain their positions in the market, the players are bringing innovations in packaging and product offerings to cater to consumers' diversified demands for coffee. They also focus on social media platforms and online distribution channels for marketing and branding their products. Owing to a significant rise in the consumption of coffee, global and local players are investing in expanding their production facilities across the country. The key players in the market are Starbucks Coffee Company, Nestle SA, Gloria Jeans, JAB Holding Company, and Luigi Lavazza SPA.
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