China is world’s new ‘branded coffee shop’ capital

The global dominance of branded coffee chains, which originated from a single Starbucks in Seattle in 1971, has seen a significant shift, with China surpassing the United States as the country with the most branded coffee shops.

Research by World Coffee Portal indicates that the number of branded coffee shops in China surged by 58% over the past year, reaching a record 49,691 outlets. This figure surpasses the 40,062 outlets in the United States, where the market experienced a modest growth of 4%. The US had held the title of the world’s largest coffee shop market for the past two decades.

Jeffrey Young, founder and CEO of World Coffee Portal, noted that the rapid growth of the East Asian coffee shop market, particularly in China, has made it a global powerhouse in the coffee industry. Local chains such as Luckin Coffee and Cotti Coffee played a substantial role in this growth, with Luckin Coffee, established just six years ago, becoming the largest operator with 13,273 stores in China.

Starbucks, present in China since 1999, remains the largest branded coffee chain in East Asia, with 6,806 stores in the country. Despite opening 785 stores in China in 2023, Starbucks faces competition from Cotti Coffee, founded by former Luckin executives in 2022, which is quickly catching up with 6,061 stores.

The growth of branded coffee chains is not limited to China, as domestic operators in East Asia, such as South Korea’s Mega Coffee, Indonesia’s Tomoro Coffee, and Malaysia’s Zus Coffee, are challenging Starbucks’s dominance and expanding their market share. As the overall East Asian branded coffee shop market matures, operators are increasingly seeking international growth opportunities. Cotti Coffee, for example, has expanded into South Korea, Indonesia, Japan, and Hong Kong since opening its first store in China in 2022. Other brands, including Luckin Coffee, Kopi Kenangan, and Compose Coffee, have also opened their first international stores in the past year.

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