McDonald's China is planning massive expansion for its own McCafé coffee bar brand.
McDonald's China plans to invest Yuan 2.5 bn (€321 m) over the next three years and upgrade the shop-in-shop coffee bar brand.
The fast-food group wants to use the existing McDonald's restaurants, delivery network and capacities for the McCafé expansion. The focus is also on digital channels to respond to the booming coffee market in China.
"Chinese consumers demand high quality coffee at reasonable prices, and we feel well positioned to use the existing supply chain and strong brand awareness to attract coffee drinkers," Phyllis Cheung, Chief Executive Officer of McDonald's China
, is quoted as saying.
Investments planned until 2023
All Chinese McDonald's restaurants are to be equipped
with their own coffee bar
, with new equipment, a changed layout and a refreshed McCafé brand image
. The concept is designed to appeal specifically to young coffee drinkers between 18 and 30 years of age - in addition to the existing regular guests.
According to current media reports, the company already has a coffee bar in around 1,500 of the total of around 3,600 McDonald's locations. By 2023, the number of McCafés is expected to be more than 4,000.
A competitive market with potential
Market researchers at Forward Intelligence Co expect the Chinese coffee market
to grow at an average annual growth rate of 15
percent and reach a size of Yuan 217 bn by 2025.
The Chinese coffee bar market has been highly competitive
for several years. Both the world market leader in coffee bars, Starbucks, is pushing its expansion in China and domestic players, such as the chain Luckin' Coffee, which has come under fire as a result of a stock market scandal.