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ANALYSIS OF COFFEE MARKET AMONG THE MILLENIALS IN CHINA
Table of Contents
2.1 Demand Of Coffee In China. 4
2.2 Supply of Coffee in China. 7
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). Analyzing coffee market among millennial in China.
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.
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. Analyzing coffee market among millennial 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. Analyzing coffee market among millennial in China
This essay will analyse the coffee market among millennials in China applying macro and micro- economic concepts and theories. These theories and concepts will be used to explain the growing demand for coffee in China and the reason as to why major global coffee retailers such as Starbucks and Dunkin Donuts are expanding into the market. This essay discusses the demand and supply factors influencing the consumer behaviours as well as the actions by coffee retailers with a focus on how economic growth increase demand for coffee. The price and non- price factors and their influence on demand of coffee in China among the millennials are discussed in this essay. Lastly, this essay offers a conclusion on the article and economic analysis of coffee market among the millennials in China. Analyzing coffee market among millennial in China
BIBLIOGRAPHY
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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Bantiwalu, Eskinder. and Demisse, Asfaw. 2011. ‘Analysing of potential market of China for Ethiopian coffee.’ Proceedings of the 7th International Conference on Innovation and Management, 444-449
Prasch, Robert. 2008. How markets work: Supply, demand and the real world. London: Sage
Qian, Yang. and Xing, Tu. 2016. ‘Starbucks vs Chinese tea: Starbucks brand management strategy analysis in China.’ International Business and Management Journal 12(2): 29-32. DOI: http://dx.doi.org/10.3968/%25x
Yang, Shang-Ho., Hu, Wuyang., Mupandawana, Malvern. and Liu, Yun. 2012 ‘Consumer willingness to pay for fair trade coffee: A Chinese case study.’ Journal of Agricultural and Applied Economics 44(2): 21-34. DOI: http://ageconsearch.umn.edu/bitstream/120449/2/jaae419.pdf