Cotti Coffee’s success story: Is coffee becoming the new tea?

Cotti Coffee’s store in Hawaii. Image: World Coffee Portal

Held from November 28th to 29th, the 36Kr WISE2024 summit in Beijing brought together prominent figures from China’s business community. Among the standout speakers was Li Yingbo, Chief Strategy Officer of Cotti Coffee, one of China’s fastest-growing coffee brands.

Under the theme “Hard But Right Thing,” Li delivered a keynote address on Cotti Coffee’s meteoric rise. Founded in August 2022, the brand is barely two years old but has already emerged as a formidable player. In this short span, Cotti Coffee has opened over 10,000 stores across 28 countries, including Thailand, Australia, and most recently Qatar, where the 10,000th store launched in October.

This rapid expansion has been driven by affordable pricing, a vast store network, and strong brand-building efforts, making Cotti Coffee synonymous with convenience and accessibility. However, as Li noted, this is only the beginning. He remains bullish on China’s coffee market, seeing immense untapped potential.

A Market in its Infancy

Despite the rise of domestic coffee brands like Cotti, Luckin, and Manner, China’s coffee consumption remains low compared to global standards. Over the past seven years, annual per capita coffee consumption in mainland China has grown from just 6 cups to 15 cups. Yet, this pales in comparison to other markets:

• Hong Kong: 200 cups

• Europe and the US: 400-600 cups

• Japan and South Korea: Over 300 cups

• Taiwan: 200-300 cups

These statistics reflect a market still in its infancy, with tremendous room for growth. As Li emphasized, China’s vast and diverse landscape cannot be understood through first-tier cities alone. The real question is: Can coffee truly become an everyday staple for hundreds of millions of Chinese consumers?

Pu’er tea is one of China’s most well-known traditional teas. Image: The Whistling Kettle

Tea to Coffee: A Cultural Shift

Traditionally, China has been a tea-drinking nation. Tea originated in Yunnan and spread worldwide, leaving its legacy in the very word itself: “teh” (from Hokkien) and “cha” (from Mandarin). Shifting from tea to coffee may seem daunting, but history provides examples. Vietnam, another tea-drinking culture, embraced coffee, giving birth to iconic beverages like cà phê trứng and cà phê sữa đá.

Why Coffee Could Boom in China

There are clear indicators that a similar shift is underway in China:

• Rapid Growth: Coffee consumption is growing at 15% annually, far outpacing the global average of 2.2%.

• Cultural Adoption: Rising disposable incomes and a burgeoning middle class are redefining coffee from a foreign luxury to a daily or weekly staple.

• Market Size: China has already surpassed the US as the world’s largest branded coffee shop market, with over 49,691 outlets.

• Youth Influence: Young Chinese, influenced by Western cultures and lifestyles, are driving the trend. For many, coffee has become a coping mechanism for stress and long working hours, replacing traditional tea.

According to surveys, 90% of Chinese consumers drink hot coffee weekly, and 64% enjoy iced coffee at least once a week. These numbers highlight the growing appeal of coffee in both its forms.

Coffee shops are not just a place to drink coffee but a place to spend time. Image: NBC News

More Than a Drink: Coffee as a Lifestyle

Li’s optimism for Cotti Coffee reflects a broader trend. The rise of coffee culture in China isn’t just about big brands or supply chains - it’s about a new lifestyle. Coffee shops are becoming “third places” - social hubs outside home and work - creating unique opportunities for brands to engage consumers.

As the market matures, Chinese consumers are expected to become more discerning, driving demand for:

• High-quality coffee

• Sustainable sourcing

• Enhanced customer experiences

The demand for coffee also creates opportunities for suppliers, including foreign producers. Many international suppliers showcased their offerings at the recent 7th China International Import Expo (CIIE) in November, signaling growing Chinese interest in imported coffee, even from regions as far as Africa.

The Road Ahead

China’s coffee revolution is only just beginning. As consumption grows and coffee shifts from a luxury to a staple, opportunities abound—not only for brands like Cotti but for suppliers, innovators, and experience-driven businesses.

While the cultural transition from tea to coffee may be gradual, history and current trends suggest that the transformation is well underway. For brands willing to adapt to this dynamic market, the potential is as vast as China itself.