Coffee culture hits new highs

The meteoric rise in the number of specialty cafes in Shanghai shows that Chinese consumers aren't just drinking more coffee－they are becoming more sophisticated as well.

When A&A Coffee opened in Shanghai in 2017, the specialty-coffee joint could only sell about 10 cups of coffee a day.

Today, the cafe sells an average of 100 cups during weekdays and 150 cups on weekends, and this can be attributed to the burgeoning coffee culture in China, says the co-founder of A&A Coffee, Lyu Manxuan.

The fact that customers in their 60s and 70s patronize the cafe every morning is also an indication that coffee consumption has become widely accepted by the general society and not just those from the younger generation, says Lyu.

"People know much more about coffee now. In the past, customers patronized coffee places mainly for the ambience and would order only cappuccinos or lattes," says the 26-year-old.

"Now, many customers understand the differences between coffee beans and are clearly more aware of what suits them."

According to CIConsulting, a leading industry-research firm, China's coffee consumption will grow by 15 percent to 20 percent per year between 2017 and 2021.

In a report that analyzed the Chinese coffee market, CIConsulting predicted that the per capita coffee consumption in the nation would increase from 6.2 cups in 2018 to 10.8 cups in 2023, with the market size growing threefold from 56.9 billion yuan to 180.6 billion yuan ($8 billion-$25.58 billion).

Shanghai has without doubt been the epicenter of this boom in coffee consumption, with Lyu citing such factors as the cosmopolitan nature of the city, the growing affluence of its citizens and the fast-rising levels of awareness of coffee.

Indeed, the number of specialty-coffee shops in Shanghai currently stands at around 8,000, up from 4,000 in 2015, according to the Shanghai Chain Enterprise Association.

Though business has been brisk, Lyu admits that selling specialty coffee is still "not very profitable". The main reasons behind this are the high rental rates in Shanghai and the growing competition.

"Small independent stores like us cannot invest much in marketing and promotion like the major coffee chains. This means that our reach is limited," she says.

Despite the low profits, Lyu says that she is determined to stay in this industry simply because of her love for coffee.

"There are many coffee shop owners in Shanghai who used to be lawyers, doctors and elites in their respective industries. But all of them have been willing to make sacrifices to pursue their love of coffee," she says.