Growing demand for coffee in the China market

According to Mrs. Nguyen Thi Thu Thuy, Deputy Director of the Export Support Center (Department of Trade Promotion, Ministry of Industry and Trade), tea is still a traditional drink for Chinese people, but the demand for coffee consumption is increasing, especially in developed urban areas.

Instant coffee in the Chinese market is dominating thanks to its convenient use. China's social development, changing lifestyle and Chinese consumers' acceptance of new cultural trends are also contributing to the increasing demand for instant coffee in the country.

According to Mordor Intelligence - a market research firm - the Chinese coffee market is forecast to grow at an average rate of 10.42% annually between 2022 and 2027.

On the other hand, according to the China Coffee Association Beijing (CCAB), coffee consumption in the country is growing at an average annual rate of 15%. Although China suffered significant damages from the Covid-19 pandemic, consumers' demand for coffee has not been reduced.

Duong Te Dong, Chairman of the Culinary Association of Chongqing City, said that the Covid-19 pandemic in 2021 has adversely impacted the economy, but the beverage market in Chongqing City is still developing stably. The use of plant-based beverages in particular has grown markedly because of their rich, delicious taste, health benefits, and their suitability for many situations, from travel to families, offices, conferences, parties, and so on.

Many experts believe that Vietnam should promote instant coffee exports to the Chinese market because the instant coffee market in China is developing remarkably.

According to Ly Thanh Hai, Chinese Market Business Development Manager of Trung Nguyen Legend Group, Trung Nguyen coffee products have been introduced to the Chinese market for over ten years, the majority of which is instant coffee.

Thanks to a distribution system in China that includes fifteen importers, 300 distributors, 30,000 offline selling points, and thousands of online stores, Trung Nguyen Legend instant coffee holds an important position in this market.

Nearly 800 million cups of G7 coffee are sold in China every year. For every eighteen cups of coffee of any brand sold in the Chinese market, at least one is a Trung Nguyen Legend brand. With fifteen million regular users, G7 instant coffee is the largest instant coffee brand in China.

However Vietnamese coffee businesses need to study the market thoroughly and have an appropriate approach strategy to truly conquer the Chinese market.

Ly Thanh Hai said that the first and most important preparation for foreign businesses planning to enter the Chinese market is psychological preparation because despite being a market with great purchasing power, China is no longer an easy market. Chinese consumers are quite demanding in terms of trying/purchasing new products. Therefore, without regular product improvement, winning over consumers and developing long-term strategies in this market will prove to be difficult for businesses.

Moreover, businesses need to acknowledge and understand that participating in the Chinese market is a long-term journey and investment, so they must prepare a business plan along with sufficient resources for a minimum period of three to five years.

Acquiring knowledge of the local market is also essential. This can be done through the employment of local staff. For example, Trung Nguyen Legend's Shanghai office currently has over 100 employees, 95% of which are Chinese. Local staff help businesses save a lot of time for project implementation, quickly assess the market, avoid legal errors, connect with many partners, and most importantly, enjoy many preferential local policies.