Analysis Of Coffee Market Among The Millenials In China. The article “China Millennials Switch to Coffee as Starbucks Pushes East” by Isis Ameida, Craig Giammona, Jiefei Liu, and Corinne Gretler analyses the demand growth of coffee and expansion of China’s coffee shop hence paving way for premium sales. The increased demand of coffee in China has attracted major brands such as Starbucks which extended its reach in the market with $1.2 billion deal to control over one thousand coffee shops (Ameida, Giammona, Liu and Gretler 2017).
This article indicates that despite that the China’s coffee consumption volumes is low according to the global standards, there could have high impact over time as coffee consumption has shifted to more populous and tea drinking nations. Traditionally, China is a tea drinking nation, however, customers especially the millennials are increasingly taking up what has been believed to be Western culture of taking coffee at coffee shops. Analysis Of Coffee Market Among The Millenials In China.
The article asserts that as a result, the demand for coffee has increased drastically in China especially among the millennials. In a graphical comparison of coffee consumption in China, this article indicates that there has been a 16% annual increase from 2004-2005 to 2013-2014 (Ameida, Giammona, Liu and Gretler 2017). This increase in coffee consumption has been attributed to increased urbanization, increasing incomes due to economic growth, and a rising middle class with high disposable incomes. Analysis Of Coffee Market Among The Millenials In China.
The authors in this article indicate that China is following the steps of Japan which was traditionally a tea drinking nation but later became one of the countries where coffee is taken in large volumes. As the demand for coffee increase, the supply will increase hence the decision by Starbucks to invest heavily in the market. This article reports that Nestle is the main coffee player in the market enjoying 66% and capital share of $1.1 billion (Ameida, Giammona, Liu and Gretler 2017). Despite that the demand for coffee in China is lower than the United States and Japan; there is high potential for growth indicating that retails will flock for position. A good example is Starbucks and Dunkin Donuts which are targeting the millennials in the market. Analysis Of Coffee Market Among The Millenials In China.
This essay deduces that suppliers of coffee such as Starbucks and Dunkin Donuts would benefit significantly from an increase in demand for coffee in China among the millennials. The supply of coffee will increase in China because as the demand increases there will be increased prices as companies strive to make high profits and hence eventually the demand will reduce hence resulting to a reduction in price. However, the increase in price will not go beyond a certain point because the demand in the market is not influenced by price but by non- price factors such as personality, perception, and increase in income. Chinese have high disposable income levels hence they will continue demanding coffee in the market. This will increase the number of suppliers. Analysis Of Coffee Market Among The Millenials In China.
Ameida, Isis., Giammona, Craig., Liu, Jiefei. and Gretler, Corinne. 2017. “China Millennials Switch to Coffee as Starbucks Pushes East.” Bloomberg News, Accessed September 30, https://www.bloomberg.com/news/articles/2017-08-08/china-millennials-swap-tea-for-coffee-as-starbucks-pushes-east
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