How China’s Coffee Revolution is Slowly Spreading to Smaller Cities

Beyond Shanghai and other megacities, young Chinese entrepreneurs are opening cafés in their hometowns. But there’s no shortage of challenges ahead

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3:42 AM HKT, Thu May 16, 2024 3 mins read

In the past decade, China’s coffee industry has experienced a remarkable boom: over the 2022-2023 crop year, the country consumed approximately 5 million 60-kilogram bags of coffee. This significant increase in demand for whole bean or freshly ground coffee over instant varieties has been driven by the proliferation of coffee shops across the nation. By 2023, the Chinese mainland hosted around 132 thousand, surpassing all other countries in the world. Shanghai stands out as a prime example of this caffeinated craze, with approximately 8,500 cafes on its streets. Like most other major Chinese cities, Shanghai boasts an almost equal distribution between independent and chain cafés. Major brands like Luckin and Manner have strategically targeted office workers, predominantly concentrating their outlets in megacities’ Central Business Districts. At the same time, many coffee-drinkers still prefer to visit independent cafés, savoring their high quality brews and curated environments.

Defying expectations, independent cafés are now also taking root in lower-tier cities across China. While it’s not exactly surprising that entrepreneurs would want a slice of the booming coffee market, moving into smaller cities, where consumers have less disposable income as well as less globalized tastes, certainly comes with risks. So who are the individuals behind these independent cafés? And who are their customers?

Local Fish Coffee Quanzhou

Local Fish, with historical buildings visible through the window.

Global Quanzhou, Local Fish

Balangyu Coffee (巴浪鱼咖啡馆) or Local Fish, situated in Quanzhou, Fujian province, stands as a pioneering establishment in the city’s growing coffee scene. Long before Quanzhou gained traction as a tourist destination propelled by media coverage, celebrity endorsements, and recognition as a UNESCO World Heritage Site, Local Fish’s owners Yasan and Amei embarked on a journey to establish a coffee shop in their hometown.

Their venture dates back to 2017, when, after each of them ended their previous jobs in Xiamen and Quanzhou, Yasan and Amei established Chizi Space, a cultural complex in the city’s historic Licheng District. The space is now a focal point of public artistic expression in the city, boasting an array of art books and zines, designer apparel, handmade lanterns made by local craftsmen, and even a corner for traditional barbers. Chizi Space intermittently hosts events in their physical location and elsewhere across the city: reading sessions, exhibitions, and performances.

Chizi Space Barbershop quanzhou

Chizi Space has a barbershop corner, run in collaboration with neighborhood barbers who lost their previous space in 2017.

Gradually, the couple started experimenting with coffee drinks again on the second floor of Chizi Space, leading to the birth of Local Fish Coffee. Notably, their menu features two signature beverages: a shihuagao latte (石花膏, a kind of seaweed paste) and youtiao affogato (油条, fried dough sticks). The seamless integration of local ingredients with coffee has spread the café’s name around China’s coffee scene, and patrons often queue up for the freshly prepared youtiao from a 30-year-old shop at the entrance of the lane where Local Fish is located.

Reflecting on Amei and Yasan’s journey, it’s evident that the essence of Quanzhou resonates deeply within their café. As Quanzhou’s status as a destination for cultural tourism has grown, Local Fish and Chizi Space have become something of an institution. Though coffee is a relatively recent arrival within Quanzhou’s millennium-long history as a cosmopolitan trading port, they’ve found a way to tie the beverage to the city’s cultural identity. Amei and Yasan seem as excited about local senior citizens stopping by their coffee stand at a temple as they are about Chizi Space participating in a Quanzhou-themed exhibition at London’s Oxo Tower Wharf.

Shihuagao latte Local Fish

A shihuagao latte and cold brew coffee at Local Fish.

Smaller City, Bigger Challenges

But not every coffee shop outside of Tier 1 and 2 cities has the same market opportunities as Local Fish — though less developed than its coastal neighbors, Quanzhou is still a relatively large city, and gets a major boost from tourism. Drunk Coffee (壮可咖啡) in Yangzhong, Jiangsu province, faces a distinctly different environment from Local Fish.

Zhuang Zhuang, the one-time owner of Drunk Coffee, returned to Yangzhong last April, after working at a coffee company in Shanghai. Her father’s health was in decline, and she planned to take responsibility for the family business. However, her coffee habit connected her with the owner of a café in the town center. When the owner mentioned he was thinking about subletting the café for six months, Zhuang Zhuang seized the opportunity. From August 2023, she took over Drunk Coffee for half a year.

An island on the Yangtze River, Yangzhong is a county-level city under the administration of the larger city of Zhenjiang, known for its black vinegar. Though there is some tourism in central Zhenjiang, in Yangzhong pour-over coffee proved to be a tough sell beyond Zhuang Zhuang’s circle of friends. She admitted that the island’s location limited customers, but shared her love for Drunk Coffee’s community atmosphere. When she was busy, her regular customers would sometimes bring coffee beans and milk to the café and use the espresso machine to make their own drinks.

After her six months running the café, Zhuang Zhuang started to work as a freelancer. Looking back on her time running Drunk Coffee, she’s grateful for her prior experience in coffee supply chain management in Shanghai, which enabled her to quickly adapt to the role of a coffee shop owner, rather than simply feeling like a daydreamer lacking any business acumen. At the time she tried to view other cafés in Yangzhong as allies rather than rivals, aiming to collectively elevate the quality of coffee. She emphasizes that cooperation over competition will be the way forward as people try to navigate the untapped coffee market in China’s less developed urban areas.

So despite what some Chinese urbanites might hope, starting a café in one’s hometown often isn’t exactly an escape from stress. It involves confronting market challenges and figuring out how to foster a connection with the local context, whether by building community or crafting recipes that resonate with tradition. Before taking the plunge, aspiring café owners should seriously consider whether their love for coffee outweighs the challenges of entrepreneurship, ensuring they're ready for the adventure that lies ahead.

Banner image of Drunk Coffee courtesy Zhuang Zhuang. All other images by Mia Fan.

Visit Drunk 壮可咖啡 at No. 29 South Huancheng Road, Yangzhong City, Jiangsu Province, and Local Fish 巴浪鱼咖啡, on Chengtian Lane, Licheng District, Quanzhou City, Fujian Province.

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