This is an English adaptation of a FoodBud historical article originally published on June 7, 2022.
This article is adapted from reporting by Zhixiangwang, ID: passagegroup, by Peng Hui. It describes how coffee consumption across Asia was accelerating in the early 2020s, creating opportunities for local operators in markets long associated with tea.
Hao Li, a 32-year-old from Shanxi working in Shanghai, began drinking coffee in 2013 after his then-girlfriend, now wife, influenced him to switch from tea. She had picked up the habit while living in the Netherlands. Hao now brews coffee at home and buys it from the growing number of coffee shops across Chinese cities.
International Coffee Organization data cited in the article said Asian coffee consumption grew 1.5% over the prior five years, compared with 0.5% in Europe and 1.2% in the U.S. Asia, historically a high-tea-consumption region, was becoming more central to global coffee demand as urban middle-class consumers looked for fashionable new products.
The article frames coffee as both a beverage and a cultural marker shaped by colonial history and Western influence, from Meiji-era Japan to colonial Vietnam and Dutch coffee plantations in Sumatra. Nobuko Kobayashi, a partner at EY Japan, told media that in many Asian markets, coffee production, export, and drinking culture were rooted in colonial histories such as Vietnam with France and Indonesia with the Netherlands. She added that Western lifestyles and urbanization helped lift demand for instant and takeaway coffee.
The pandemic also increased demand for locally produced coffee. Asia produced 29% of the world’s coffee beans, while the region including Oceania consumed 22%.
Iman Kusumaputra, co-founder of Indonesian coffee chain Kopikalyan, said the company’s vision was to become the first international coffee chain from a coffee-producing country. He noted that Starbucks from the U.S., Costa from the U.K., Gloria Jean’s from Australia, and Arabica from Japan did not originate in producing countries such as Brazil, Vietnam, or Indonesia.
Vietnam has been a coffee power since French colonists first harvested coffee cherries in the 19th century. Coffee is deeply embedded in local culture: bribes may be called “coffee money,” socializing can mean going for coffee, and ca phe sua da became an exportable cultural product. The condensed-milk coffee style emerged in a period when refrigeration for fresh milk was scarce.
Vietnam became the world’s largest robusta coffee exporter and a coffee society. Its market now spans traditional street carts selling roughly US$1 drip coffee and specialty cafes such as UCC Coffee Roastery in Ho Chi Minh City, where baristas use siphon brewing methods. The article describes Vietnam moving from traditional coffee roots into a more diverse, TikTok-influenced taste culture serving both consumers who want novelty such as frappes and enthusiasts interested in terroir and roasting.
UCC manager Phan Thi Kieu Nga said information is now public, making it easier for consumers to research origins and reviews, and that awareness of coffee quality is growing. Her store sold beans from three continents, used an industrial roaster, and offered tools such as hand grinders.
She said COVID-19 created a large group of home brewers who improved their coffee skills during lockdowns, copied Instagram influencers, and developed interest in single-origin coffee.
Fourth-generation farmer Rolan Colieng, whose company K’Ho Coffee is named after an ethnic minority group in Vietnam’s Central Highlands, said Vietnam had previously focused mainly on exports. She said Vietnamese people were taking a more active role in building the quality and reputation of local coffee, beyond the cheap robusta legacy planted by French colonists. She added that domestic specialty-coffee demand creates high value for farmers, who now keep some of the best coffee for themselves.
Nguyen Duy, a 21-year-old with bleached hair and Nike sneakers, said he likes both coffee from aluminum filters and espresso-machine coffee. He represents a shift in taste shaped partly by foreign chains such as Starbucks, which were not present in Vietnam a decade earlier and helped popularize espresso-based drinks such as macchiatos. While studying in Australia, he developed a taste for Americano, though his parents disliked it; as a child, they had introduced him to stronger, more bitter Vietnamese coffee.
Vietnamese cities now support a wide mix of formats: chains selling higher-priced cappuccinos, street vendors with folding chairs and handwritten cardboard menus, self-service machine coffee at GS25, and moka pot orders at Vietnam Coffee Republic. Duy, who looks for cafe trends on TikTok, said cafes remain attractive because people can sit on the street, enjoy coffee, and talk with friends and family.
The article also notes that as wealthier Vietnamese consumers retreat into malls and gated communities, sidewalk cafes and restaurants remain important street-life venues where different social groups cross paths.
Indonesia, Asia’s second-largest coffee producer, was also building momentum. Six years before the article, Iman Kusumaputra returned from Melbourne, Australia, with a finance degree and planned to start a property company plus an Indonesian version of Starbucks. He said the coffee shop business survived while the real estate business did not.
Kopikalyan operated three cafes around Jakarta and opened its first and only overseas branch in Tokyo in December 2020. The chain used arabica beans sourced entirely from Indonesian plantations. Alongside espresso and cappuccino, it sold local blends such as Es Kopi Susu, an iced coffee with milk and palm sugar. It also launched Kopi Atlas, offering eight curated single-origin coffees from Indonesian regions spanning Aceh in the west to Papua in the east.
Kusumaputra said Indonesia’s island geography creates distinct regional coffee flavors and many single-origin varieties, with even a single island able to contain several origins.
Kopikalyan opened its first cafe in 2016 and had planned expansion into other major Indonesian cities plus Japan, the United Arab Emirates, and Australia, but COVID-19 and mobility restrictions forced delays.
Kopikalyan Tokyo head Kenny Tjahyadi said Indonesians were beginning to recognize their coffee as something to be proud of. In the past, arabica and premium coffee were largely exported rather than consumed domestically, but the cafe boom helped high-end beans circulate locally.
Kusumaputra said that in 2016 only a few “coffee warriors” asked cashiers about flavor and brewing, while Indonesian consumers had since become more curious about origin and growers. Home brewing also made beans easier to sell.
During the pandemic, Kopikalyan developed new packaging including aluminum cans and drip bags, partnered with Gojek and Grab for delivery, and used local e-commerce platforms such as Tokopedia to reach more customers. Tjahyadi said domestic brands benefited as more consumers leaned toward supporting local products rather than foreign brands.
Although Indonesia was the world’s fourth-largest commodity exporter, coffee’s popularity rose only in recent years as the pre-pandemic middle class expanded, disposable income increased, and cafe culture became popular with urban youth. Tjahyadi also noted that 90% of Indonesians are Muslim, creating demand for a non-alcoholic social drink.
DealStreetAsia reported that newer companies including Kopi Kenangan, Janji Jiwa, and Fore Coffee were filling demand for affordable fresh coffee and attracting global investors, with Kopi Kenangan becoming Indonesia’s newest startup unicorn.
Andita, a 23-year-old architecture graduate in Jakarta, said she began visiting cafes in university to do coursework and now uses them for work projects. She said she often worked through the night and, under work-from-home policies, worked at cafes with a good atmosphere. On weekends she met friends at cafes such as Kopikalyan, and at home she often brewed coffee with a French press.
Meralda Abida, an 18-year-old university student, began drinking coffee in high school to help her study for exams, when her options were mainly sachet coffee from convenience stores. With campus classes still fully online because of COVID-19 restrictions, she often completed coursework alone or with classmates in cafes. She visited favorite cafes near her residence in South Jakarta one to two times per week and also ordered ready-to-drink coffee through Gojek or Grab.
China was seeing a similar shift. Foreign chains including Starbucks and Costa entered Chinese cities in the late 1990s and attracted young consumers. In recent years, local chains and roadside cafes have pushed China’s own coffee culture forward.
A March 2021 report by Yicai said Shanghai had 6,913 independent coffee shops, more than Tokyo with 3,826, London with 3,233, and New York with 1,591.
Yicai’s research suggested China’s coffee shops were highly concentrated in wealthy urban areas and targeted younger consumers. Min Chun, a Shanghai-based project manager at DAXUE Consulting, said young consumers had spending power, wanted to try new things, and were open to new trends and attractive products.
Initially, young coffee drinkers with overseas experience helped develop the Chinese market. Later, local brands such as Manner Coffee and Luckin Coffee led the takeaway trend, winning urban consumers with prices from RMB10 to RMB25.
Chun said younger consumers often did not have time to sit in coffee shops and simply wanted grab-and-go products. He also said coffee from cafes with distinctive foreign names reflected urbanization and rising purchasing power, even among people who did not necessarily understand or like coffee.
China’s efficient delivery infrastructure made coffee cheaper and easier to consume. Consumers such as Wang Xiaoyi used mobile apps to satisfy coffee cravings without leaving home.
Specialty chains such as Seesaw Coffee and Mellower Coffee offered innovative drink menus including alcohol-mixed coffee aimed at urban consumers. Seesaw partnered with Finnish designer Marimekko, while Manner gave customers who brought their own cups a RMB5 discount.
iiMedia Research forecast in November that China’s coffee market would maintain a 27% annual growth rate and reach RMB1 trillion in 2025, up from RMB381.7 billion in 2021.
Investors were watching the category. Manner was reportedly planning an IPO and had attracted several financing rounds the prior year from investors including Singapore’s Temasek, Meituan, and ByteDance. According to Chinese data provider Itjuzi.com, Seesaw operated fewer than 100 stores but raised more than RMB100 million in July 2021.
The article connects coffee with the broader rise of guochao, or local Chinese consumer brands, across categories from apparel to cosmetics. Chun said Chinese chains were beginning to choose local coffee beans because of cost and customer preference for local flavors, unlike foreign companies operating in China with imported beans. He said the strategy could work if Chinese companies proved local beans were equally refined and delicious, since their audience was local young consumers sensitive to this type of marketing.
Hao agreed, saying consumers like him did not necessarily prefer Starbucks or Costa and were willing to try independent shops. He also cited Manner’s environmental policy and said such consumers felt closer to the international community.
Danny Li, founder of Myanmar’s Goffee-Coffee, observed similar preferences among his customers. After graduating from a university in Taiwan, Li, who has Chinese and Myanmar heritage, opened his cafe in Mandalay in 2016, when there were few specialist cafes beyond restaurants. He said he wanted to bring coffee culture back to his home country after studying in Taiwan. His early customers were mainly tech workers, young engineers, and foreigners rather than locals. To spread coffee culture, he offered workshops. In Myanmar, a former British colony where milk tea had long dominated street beverage culture, he said the trend was changing as people began drinking coffee and learning how to identify good coffee.
The source article also included an image credit: Colossus.
Japan, another country with a long tea-drinking history, was also seeing coffee consumption rise. According to Mersol & Luo, Japan was Asia’s largest coffee market, with coffee sales of US$34.45 billion in 2020.
Masahiro Kanno, president of the Specialty Coffee Association of Japan, told Nikkei that tea had been the mainstream Asian beverage, but he expected coffee drinkers to increase, as seen in Japan. He said Japan’s existing tea culture meant people were already accustomed to boiling water, making refined coffee habits such as pour-over easier to adopt.
As coffee became one of Japan’s most consumed hot drinks, tea consumption declined. Japanese Association of Tea Production data showed domestic tea consumption fell to 108,454 tonnes in 2019, down 30% from its 2004 peak.
Herbert Yum, research manager at Euromonitor International, said younger consumers in markets such as Japan and South Korea may be losing interest in tea. In those markets, coffee had become the main hot beverage after long-term coffee-culture development.
Japan’s tea and coffee suppliers both faced challenges from population decline. But unlike the tea market, coffee consumption kept growing: All Japan Coffee Association data showed coffee consumption reached 452,903 tonnes in 2019, up 5.8% from 2004.
Japanese coffee drinking began as early as the 19th-century Meiji period, when consumers sought Western culture, long before Starbucks entered Japan in 1995. Starbucks and its no-smoking policy helped increase female coffee consumers, since many women had been put off by smoky traditional kissaten cafes. Around 2010, freshly brewed convenience-store coffee helped expand the market further.
COVID-19 in 2020 hit both cafes and convenience stores, but it also created an opportunity as consumers spent more on specialty beans and equipment for home use. Kanno said people in their 20s and 30s were willing to pay for products they considered valuable, and that the pandemic increased attention to coffee equipment and beans in Japan.
Before China overtook it in 2020, South Korea had been Asia’s second-largest coffee market. Cafes had become part of the country’s social ecosystem.
Seo Young-woong, 37, visited Lusso Lab in Sejongno, Jongno District, Seoul, twice a week. The two-story red-brick cafe gave him a break from the city. He said he liked the time, space, comfortable seating, and clean environment.
Lusso Lab was operated by local chain company CK. During a December afternoon visit by Nikkei, the cafe was crowded with customers from different age groups and backgrounds: a senior reporter interviewing a source on the second floor, three women in their 20s drinking Americanos and eating cake, and a teenage classical-music student with a violin drinking an iced latte.
The article contrasts Lusso Lab as an urban refuge with Cafe Comma, run by Munhakdongne Publishing Group, as a “book cafe” for coffee, reading, and study. Its five-story space was filled with shelves holding thousands of books. On the second floor, a young couple studied math on tablets and a woman in her 30s studied on a laptop by the window, making it look more like a library than a cafe.
Despite the pandemic, South Korea’s coffee market continued growing quickly as consumers used cafes as second homes, offices, or libraries. Customs data showed coffee imports reached US$916 million the prior year, up from US$738 million in 2020 and US$662 million in 2019.
Hyundai Research Institute, a Seoul-based private think tank, said in a 2019 report that South Korea’s coffee market was expected to grow to KRW9 trillion, or US$7.5 billion, by 2023.
Euromonitor’s Herbert Yum said Asia-Pacific coffee category growth was driven by the continuing development of coffee culture in the region, not only by economic expansion and higher disposable income. He expected coffee to become more deeply rooted in Asian societies over time as middle-class consumers pursued lifestyle goals that included higher-quality coffee, often influenced by social media and cafe-based socializing.
Note: IPO, financing, market-size forecasts, and forward-looking figures above are historical references from the 2022 source article.