East Asia branded coffee shop market booms as China overtakes US by outlets

Download our infographic on the East Asian branded coffee shop market | Photo credit: © World Coffee Portal

• Project Café East Asia 2024 shows the total East Asian branded coffee shop market grew 24% in terms of outlets over the last 12 months to reach 119,221 stores, with China representing nearly 42% of the total market 

• 17 out of the largest 18 East Asian markets achieved net outlet growth over the past 12 months, with seven markets experiencing double digit store growth 

• Eighty-five percent of the 645 branded coffee chains currently in operation across East Asia originate in the region with 95 operators from outside the continent 

• 72% of East Asian industry leaders surveyed report increased sales over the last 12 months, with the same percentage believing trading conditions will further improve next year 
   

China leads significant coffee shop growth across East Asia 
 

China has overtaken the US as the largest branded coffee shop market in the world by outlets, growing 58% over the last 12 months to reach 49,691 outlets. Growth was led by the rapid expansion of small store format and delivery focused Luckin Coffee and Cotti Coffee, which added 5,059 and 6,004 net new stores respectively. Starbucks opened net 785 outlets in China during the period and is the second largest branded coffee operator in the country by outlets.  
 

China is the fastest growing market in East Asia ahead of Malaysia (28%) and the Philippines (15.3%). Overall, six of the largest 10 markets by outlets achieved double-digit outlet growth over the last 12 months. 

Starbucks remains East Asia’s largest coffee chain – but competitors challenge dominance 

Starbucks remains the largest branded coffee chain in East Asia, having opened 1,223 net new outlets in the last 12 months to reach 13,524 stores across 15 markets. However, domestic operators such as South Korea’s Mega Coffee, Indonesia’s Tomoro Coffee and Malaysia’s Zus Coffee are challenging Starbucks’ 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. 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. 
 

Convenience key concern for Chinese coffee consumers 
 

More than 90% of 4,000 Chinese coffee shop consumers surveyed drink hot coffee weekly, while 64% consume iced coffee at least once a week. Indicating the role of coffee shops in driving consumption, 89% of consumers surveyed visit or order from a coffee shop at least once a week with a fifth of those doing so daily. 
 

Small format stores focused on convenience are widespread in the Chinese branded coffee shop market. More than 85% of those surveyed have pre-ordered or ordered for delivery from a coffee shop within the last 12 months, with 57% preferencing beverage delivery over visiting a coffee shop. 

Industry optimism remains high with further sales and outlet growth on the horizon  

The majority (72%) of industry leaders surveyed achieved annual sales growth in their respective markets, with the same percentage positive about current trading conditions.