British Broadcasting CorporationStrolling through the streets of Shanghai, you can’t miss the cafe culture. In some areas you can’t turn a corner without passing another new little cafe.
China’s financial capital now has so many coffee shops that the government claims it has the highest number of coffee shops in any city in the world.
The city’s cafe culture has been growing for years, but the post-Covid reopening has really given it a boost as locals embrace the outdoors and find places to meet up with friends and family.
However, with so many new stores, competition for customers has become more intense. Most owners we spoke to don’t think all of these businesses will survive.
Shanghai officials say there are “more than 8,000 cafes in the city.” A report from the Shanghai International Coffee Culture Festival shows that by the end of 2023, the number of coffee shops will reach 9,553.
It’s not just the number of stores that sets Shanghai apart.
While other Chinese cities are still dominated by large coffee chains such as Starbucks and its local rival Luckin Coffee, Shanghai’s explosive growth in cafes has been driven in large part by niche independent outlets such as Hidden Track.
Its boss, Dong Xiaoli, said she had “no choice” but to dive into the industry because she was passionate about coffee.
But it won’t be easy.
When asked what advice she would give to someone considering following in her footsteps, she laughed and replied: “I would say don’t do it.”
“The investment versus return comparison is very bad. You need to buy expensive machinery and invest a lot of money in decoration. You make very little money compared to other industries.
To succeed in this very crowded market, having a unique atmosphere is just as important as attracting customers.
Hidden Track went for a limited menu and a simple, minimalist vibe that opens to the street in a welcoming way.
Cafes here are considered trendy and urbane, which helps attract younger customers through the doors. Cafes have become a social place for many young people to dress up, meet for coffee and chat.
Shanghai residents have long seen themselves as heirs to the outgoing, cosmopolitan attitude that pervaded Shanghai in the early 20th century, and they are proud of their café culture.
“Shanghai has long been an international trade city: we started drinking coffee a long time ago. Different types of cafes will gradually appear in smaller cities.
A woman nearby agreed that the local café culture was now firmly established. When asked how many cups of coffee she drinks in a day, she laughs loudly: “I drink as many cups as I like.”
As cafes grew, so did people’s interest in trying them.
The tea giant’s coffee converts are keen to try new flavors and brews.
Yuan Jingfeng, who runs R1070 Cafe, said all his coffee beans come from Japan.
“My costs are very, very high. My imported coffee beans include American and Italian-style coffee beans, which are imported from Japan in original packaging,” he said.
“Wholesale prices have increased significantly in the past few years. The wars in Yemen and Ethiopia have had an impact. There are fewer and fewer good coffee beans, and more and more people drink coffee.
But he said he has so far resisted passing on the increased costs to the growing community of coffee drinkers.
AC Cafe is owned by Deaf people and employs Deaf baristas.
Yang Yanfang, who provides AC translation for people who cannot speak with their hands, said that after the epidemic, “friends are very keen to meet up for a cup of coffee or drinks, and Shanghai has become a city with a strong coffee flavor” culture.
“I can skip meals, but I can’t skip coffee,” she added.
This isn’t the only cafe of its kind.
Another popular cafe, run by blind employees, serves coffee through a hole in the wall to customers wearing monkey costume arms, to customers waiting on the street.
Along a stretch of road, there are 18 cafes within a few hundred meters. They all have many customers inside.
Owners hope this won’t just be a passing fad.
China’s coffee market was estimated to be worth more than 260 billion yuan ($35 billion) last year. It is predicted that this number may increase by another US$100 billion ($13 billion).
According to the World Coffee Portal, the country’s branded coffee shop market grew by 58% last year.
Because Shanghai’s overhead costs are so high, many coffee shops cannot afford to underutilize their space at night. So when the sun goes down, they turn the cafe into a bar, sometimes with live music.
Wang Xi, the owner of Huaer Coffee Bar, has a prime location with a clear view of the city. His margins are very tight, but for now his business is surviving.
“I’m a pretty optimistic person,” he said. “I hope China’s economy can quickly return to pre-epidemic levels. If the economy flows again, everyone will benefit.
China’s economy may face some major obstacles, but as Wang Xi put it, looking out at the customers seated at small tables and chairs and gazing at the shimmering Shanghai skyline along the Suzhou River, it was hard not to express his optimism on this night. manner.
