China coffee market: the quest for novel experiential offerings

Alibaba have published an interesting overview of the Chinese coffee market on their Alizila website, even if it somehow neglects to mention the potential impact of emerging local players such as Luckin.

The key takeaway for me wasn’t so much the big numbers that the report throws around, but the two key consumption trends that it identifies: namely, the move to “premium artisan products” and the quest for “novel experiences.”

“The upgrade for coffee comes in tandem with an increasing demand for novel experiences among Chinese consumers as a whole,” the report notes before adding: “Premium-brew bars in China have turned coffee shops from grab-and-go spots for a cup of Joe into coffee destinations.”

This idea of novel experiences immediately brought to mind a passage I read yesterday in Jonathan Spence’s wonderful book Return to Dragon Mountain about an impromptu lantern festival thrown together by the family of its subject Zhang Dai:

“The extravagance began when several of Zhang Dai’s uncles decided to light up the whole of Dragon Mountain in Shaoxing with a display that would put all other families to shame. They cut and sharpened many hundreds of stakes, painted them with bright red lacquer and tied them together in threes. Each of these triangular scaffolds was garlanded with satin, and from each a lantern was suspended. Under the branches of the tree that grew in profusion on the mountain – and were also festooned with lanterns – the lines of lacquered frames with their gleaming offerings ‘hemmed the skirts of the mountain paths, climbed along the steep mountain steps and clothed the valley with radiance.’”

The demand for novel experiences is nothing new. Chinese festivals and markets have always been filled with verve, color, and spectacle. The difference now is that rising wealth, increasingly sophisticated consumer tastes, and new IoT and AI technologies are driving the creation and enjoyment of ever more vibrant and distinctive new experiences on a scale that has never been possible before.

I’m looking forward to my trip to Empower Digital China in Hangzhou later this month even more now as I’m sure that it will give me a much sharper snapshot of the directions that this quest for delivering novel experiential offerings will lead us in the future.

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