A Peep Into China’s Instant Coffee Market 2023

China’s instant coffee market is experiencing tremendous growth. While there’s no doubt about the significant opportunities it brings, foreign marketing specialists and business owners face many formidable challenges when tapping into China’s coffee industry. The complexity of language, cultural differences, and ambiguous ways of outreach make it difficult to seize opportunities.

To help you have a clear vison and insight of what’s happening in China’s instant coffee industry, we researched and re-organized data from a survey done by iiMedia Research, a third-party data mining and analysis agency for the global new economy industry. This company also provides original, authoritative reports and surveys done by Chinese coffee market research experts. You’ll be shock with our findings.

Key Takeaways From the Survey

Here’s a summary of the most interesting findings and key statistics to China’s instant coffee industry:

#1: The size of China’s instant coffee market is expected to reach 153.6 billion USD in 2026. The coffee market is gradually closing to the general public.

#2: Price is the most important factor that consumers pay attention to when buying instant coffee.

#3: More than 80% of consumers expect instant coffee taste innovation, and 56.9% of consumers expect category innovation. This means the demand for instant coffee category innovation and diversified taste has increased.

#4: The category of instant coffee is becoming high-quality and niche in China, especially coffee+tea is leading the new trend of the industry.

#5: In the past decade, the Chinese coffee consumption per capita has increased significantly, from 3.2 cups per year to 11.3 cups per year from 2013 to 2022. Although this is far lower than the global average 75.2 cups per year, the increasing number shows great market potential and room of improvement without high competition.

Growing Market Size

Data from iiMedia Research

The advantage of instant coffee is convenience and the fast speed, making it suitable for a fast-paced lifestyle in most cities in China. According to iiMedia Research, China’s instant coffee market reached 58.4 billion USD in 2022, and in the future, the coffee market will only expand from first- and second-tier cities to third- and fourth-tier cities.

This only means that there’s a gradually developing consumer base that can further drive the growth of the total instant coffee market. That is why the size of China’s instant coffee market is expected to reach 153.6 billion USD in 2026, tripling in under 5 years time.

Increasing Demand & Low Competition

Data from iiMedia Research

In the past decade, the coffee consumption per capita of the Chinese people has increased significantly, from 3.2 cups per annum in 2013 to 11.3 cups per year in 2022. Although China has a lower coffee consumption than the global average of 75.2 cups per year, this rate actually has been accelarating since 2013. This indicates a huge coffee market potential with low competition and that the overall penetration rate of China’s coffee market is low. This means that there’s still has a lot of opportunities for improvement.

Increasing Supply

Data from iiMedia Research

Survey Limitation: the actual number of financing from most of these capitals are not public, with only a general refer. The reality statistics may differ significantly, so please be cautious when you take them into consideration.

With the growing demand for coffee in the market, many stakeholders in China are actively investing in the instant coffee industry to take hold of opportunities. Multiple coffee establishments including Tasogare Coffee, Cephei Coffee ,Cha Latte, etc., have received investments at different stages of financing.

For example, Tasogare Coffee has entered the C round of financing, but the specific amount of financing has not been disclosed. The main investors include well-known investment institutions such as Qiming Venture Partners, Duowei Capital, and FutureX Capital; Shefei Coffee has completed A round of financing with an amount of several million USD, led by Jinshajiang Venture Capital. Huatiancui has received angel round financing led by Qingshan Capital.

In addition, Fanzhu Capital (Xiaofangtable) participated in the seed round of financing, while Encouragement also completed the seed round of financing with an amount of several million yuan. Macstar Investment and Zhongyuan Capital participated in the A+ round of financing for Yongpu Coffee. These data show the prosperous scene of the instant coffee market and the enthusiasm of capital in this field.

New trend: The “Coffee + Tea” lead the new trend of the coffee industry

Data from iiMedia Research

With the increasing competition in China’s coffee market and the diversification of consumer tastes, brands are constantly looking for innovation. One such innovation is the “tea-coffee,” a new trending drink among Chinese instant coffee consumers. In the most literal sense, it is made by mixing of tea and coffee.

The emerging brand, Cha Latte, the famous coffee chain, Luckin’ Coffee, and Farmer Spring’s ready-to-drink coffee beverage, TanBing, have successively launched a series of tea and coffee products. The innovative category of tea and coffee has won the consumers, especially among younger generations.

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Mesphird Yang

I have been brewing and drinking coffee for almost 6 years now. At first, I was just dazzled by how baristas look and that's why I started learning. In the long run, I became obsessed with its charm. I have tried many coffee brewing methods, with different kinds of beans in various roast levels. If I could have more than 4 cups of coffee a day, I definitely would!

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