China instant coffee market is estimated to attain a market size of USD3,176.079 million by the end of 2025. The market is projected to grow at a significant pace owing to the rapidly growing coffee consumption in the country. The shift from the traditional tea-consuming country to the most promising market for coffee growers and international coffee chains is further augmenting the market growth in the forecast period. The expanding coffee chains in China including the largest coffee chain retailer, Starbucks is strengthening its footprint in the country. The company grew its number of stores by three times from over 1000 stores in 2013 to more than 3000 in 2018.
The evolving customer dietary patterns, along with the evolving living standards of the citizens, coffee drinking is gaining traction among urban consumers. The Chinese are keen to explore new coffee products from abroad. The country is ranked at a lower position in terms of coffee consumption on per capita basis in comparison to the other countries of the world like the United Kingdom and the United States, however, the total coffee consumption increased at a CAGR of around 16% in the last decade surpassing the world average of 2% (source: International Coffee Organization). As per the USDA estimates, the coffee consumption in China accounted to hold a market size of around 3.7 million 60kg bags during the time period 2016-2017.
The fast-growing customer base of the country including the middle-class population is further propelling the market demand in the forecast period. This is due to the increasing purchasing power of the consumers with the growing disposable income and increasing family income. The millennials also have an impact on Chinese coffee consumption, this group of the population is considered to be the most educated, and is a well-travelled generation, hence are well-aware of the coffee health benefits in addition to consuming coffee as one of the refreshing drinks, further contributing to propagate the market demand during the forecast period. The millennials, who are well-influenced by the online mode of purchases are known to purchase varied coffee products including instant coffee via the e-commerce platforms with safe payment options.
Organizations are adopting strategies in the form of collaborative partnerships for increasing coffee consumption. For example, Starbucks and Alibaba collaborated by opening the Starbucks Roastery in Shanghai in late 2017 and the consumers were offered a new retail experience through augmented reality, further giving rise to increasing the customer foot traffic, and simultaneously surging the sales of coffee products.
The current global COVID-19 pandemic scenario that originated from China in December 2019 is projected to adversely impact the market growth in 2020. The pandemic situation further led to the lockdown and self-quarantine measures by the individuals in order to prevent disease transmission. This has further led to the shutting down of public places which include coffee shops, hotels, and restaurants throughout the nation.