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China Overtakes US as Branded Coffee Shop Capital of the World

The branded coffee chain craze may trace its roots to a single Starbucks in Seattle’s Pike Place market in 1971, but now China has toppled the US as the country with the most branded coffee shops.

The number of branded coffee shops in China increased by 58% over the past 12 months to a record 49,691 outlets, according to research by World Coffee Portal. That was more than 9,000 in excess of the 40,062 in the US, where the market grew by just 4%. The US had held the crown as the world’s biggest coffee shop market for the entire 20-year history of the research.

Jeffrey Young, the founder and chief executive of World Coffee Portal, said: “The east Asian coffee shop market is clearly experiencing rapid growth led by phenomenal outlet expansion in China, which has fast become a global coffee industry powerhouse.”

The local chains Luckin Coffee and Cotti Coffee rapidly expanded over the past year, adding 5,059 and 6,004 stores respectively. Luckin, founded only six years ago, has 13,273 stores in China, making it by far the biggest operator.

Starbucks, which opened its first shop in China in 1999, opened 785 stores in the country in 2023, taking its total there to 6,806. China is still the chain’s fastest-growing market but Cotti Coffee, founded by two former Luckin executives in August 2022, is rapidly catching up with 6,061.

Starbucks remains the largest branded coffee chain in east Asia, having opened 1,223 outlets in the past year to reach 13,524 stores in 15 markets. However, domestic operators such as South Korea’s Mega Coffee, Indonesia’s Tomoro Coffee and Malaysia’s Zus Coffee are challenging Starbucks’s dominance and increasing their market share.

“As the total east Asian branded coffee shop market matures, rapidly expanding operators are increasingly seeking international growth opportunities,” World Coffee Portal said. “Cotti Coffee has entered South Korea, Indonesia, Japan and Hong Kong since opening its first store in China in 2022, while Luckin Coffee, Kopi Kenangan and Compose Coffee all opened their first international stores within the last 12 months.”

Source : The Guardian