New entrants continue to shake up China’s coffee market, with Loong Coffee the latest to make a splash. According to 36Kr, the Beijing-based specialty coffee brand has secured tens of millions of RMB in its first financing round, although the investors remain undisclosed.
Founded in 2024, Loong Coffee distinguishes itself by serving Chinese-style black coffee. This approach bucks the current trend of milk-infused and flavored coffees, emphasizing the pure, unadulterated taste of high-quality coffee beans.
Much like the evolving tea market, which has seen a shift toward health-conscious choices, the coffee market in China is experiencing rapid growth. A recent industry report highlights that average annual per capita coffee consumption in China surged from six cups in 2016 to 16.74 cups in 2023. This increase coincides with a growing demand for specialty coffee, as consumers seek both affordability and quality.
Ready-to-drink black coffee is also gaining traction. Kantar Worldpanel reported that sales in this segment grew by 7.2% in 2023, with black coffee sales alone soaring by 31.6%, reflecting a broader trend toward health-conscious consumption.
“The Chinese coffee market is vast, with room to grow tenfold. We believe there are still opportunities with the right brand positioning,” said Zhu Zhengwei, co-founder of Loong Coffee. Accordingly, the company is aiming to make specialty coffee more accessible and affordable.
Shanghai, China’s most mature coffee market, is home to over 9,500 coffee shops. Brands like Manner Coffee and Luckin Coffee, known for their high-quality yet cost-effective offerings, are thriving. Saturnbird Coffee, with its premium ready-to-drink black coffee, also represents this burgeoning trend.
According to Zhu, the landscape of coffee consumption in China has evolved significantly. Before 2018, instant coffee dominated, with limited Starbucks stores based mostly in first- and second-tier cities. From 2019 to 2023, milk coffee became mainstream, reaching even county-level markets. Now, more advanced consumers are seeking better flavors and functionality, with black coffee steadily gaining market share.
Loong Coffee’s grassroots research indicates that coffee shops have been replacing milk tea shops in recent years, especially near schools. In economically developed areas like Beijing and Shanghai, black coffee sales in college-area coffee shops can reach nearly 30%.
Loong Coffee aims to be the “basic model” of coffee, akin to Uniqlo in the apparel industry, offering products made with top-notch materials at affordable prices. Its strategy revolves around small, efficient stores. Its first store in Chaoyang, Beijing, is just 20 square meters in size.
The brand offers a diverse range of products, including the basic black coffee series with options like “Dianxia Americano” and “Amber Americano,” the Loong blend series, and an oriental cold brew series. Additionally, innovative offerings like candied fruit and jasmine-flavored black coffee, as well as limited-edition blends like lychee with “Da Hong Pao” and ginseng with pomegranate, cater to local tastes. Loong Coffee has also launched buffalo sauce lattes and croissants to provide a richer flavor and nutritional profile.
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The brand’s first store near Beijing’s 798 Art Zone targets white-collar workers and offers a membership system with prices ranging from RMB 7.9–19.9 (USD 1.1–2.7) per cup. Most products are priced below RMB 14.9 (USD 2), with various membership benefits driving a 30% repurchase rate and over 70% repurchase consumption.
Loong Coffee’s branding centers on a dragon symbol, with storefronts featuring traditional Chinese architecture in red and interiors in simple black. The small store model prioritizes quick take-out service.
Looking ahead, Loong Coffee plans to expand into gym and food truck models. Zhu emphasizes that the success of a coffee brand is also a victory for local culture. “Loong” signifies “continuous improvement,” reflecting Eastern philosophy.
Through its quality black coffee, Loong Coffee aspires to showcase modern Chinese culture.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Yang Yafei for 36Kr.