Coffee Brand Localization for Companies Entering China

In light of Costa coffee’s recent announcement to almost triple the number of stores in China in the next 5 years, it seems appropriate to discuss one of the most intriguing markets in China: the coffee industry, and coffee brand localization. This is a sector in which big brands from the west have had to adapt drastically and localize everything from product lines to the design of stores in order to meet the needs of a culture so different from their own.

It is common knowledge that China has, and always has had, a very large tea drinking culture and not only this but also a culture in which sitting and relaxing in a comfortable environment can last for hours on end. Compare this to the “grab and go” style interaction used to get a caffeine hit in most coffee shops in the west, this opens up a very interesting dynamic for how western coffee companies would ever be able to settle and become successful in China.

Belinda Wong, the president of Starbucks China, said that “the company aims to capture a larger market by going more local and applying its cultural insights.” This led them, back in 2010, to launch nine different types of tea after discovering the long way (after more than ten years of just selling coffee) that the Chinese market wasn’t ready for such a drastic change in hot beverage choice. Not only this but a lot of the coffees on the menu have been made sweeter than in the west in order to mask the taste of the coffee itself, while the breakfast and lunch options have been modified to appeal more to local demand.

However, the largest adaptation western coffee companies have had to make when moving to China doesn’t lie with the products but with the environment in which the customers enjoy their drinks. Lots of stores all over the country have been built with a substantial amount of seating space and larger sofas as opposed to a big serving kiosk like in the west. Anyone who has spent some time in these establishments will quickly understand why, ranging from large groups of 10-15 people gathering for birthdays to lazy couples cozying up on the sofa with a laptop, the space and the environment are the main reasons people head to these cafes.

The localization of coffee companies in China is still a very interesting situation though, one in which companies such as Starbucks and Costa Coffee have localized and will continue to do so as long as the market remains as lucrative as it currently is. They will also continue to succeed in the process as it is not about the coffee, but about researching the societal and cultural factors in China and providing as close a service to these needs as possible.