GlobalData's Market Assessment for Chinese Hot Drinks highlights a compound annual growth rate of 6.1 percent, growing to $72.2 billion in 2027. The report indicated that while tea remains the most popular hot drink, coffee culture is the fastest growing.
"The stringent COVID-19 lockdowns in Beijing, Shanghai and in the Hainan province have undermined the on-premise sales of hot drinks. However, consumers are treating themselves to higher quality tea and coffee at home. The growing demand for the new consumption experiences among the urban youth and the introduction of new brew styles and flavours by international and homegrown companies are powering the growth of the hot coffee category in China," said Naveed Khan, Consumer Analyst at GlobalData.
Yellow tea and scented teas have gained traction as the demand for healthy herbal drinks increases.
Convenience stores were the leading distribution channel for the hot drinks market in 2021, followed by hypermarkets, supermarkets and e-retailers. Nestlé, China Tea, and Zhejiang Xiangpiaopiao were the top three companies, with Nescafe and U.Loveit leading in value.
"Multinational and local companies are launching new products with innovative marketing strategies to develop new consumption occasions and expand their base. They are targeting young consumers who are eager to experiment with innovative brew styles and flavours. However, the strict pandemic control measures, economic slowdown, and political standoff over Taiwan may slow down the hot drinks sector's growth momentum in the intermediate term."
