Understanding China’s Food & Beverage Chain Boom: Tea, Coffee and Quick Service in 2025

Why Cheap Ice Cream, Fast Coffee, and 30-Minute Pizza Still Rule

Ciao Ragazzi,

China’s F&B chain sector might not grab headlines like semiconductors or EVs, but it’s quietly becoming one of the most dynamic and revealing corners of the consumer economy. In a year when many discretionary categories are flatlining, the country is adding tens of thousands of new tea shops, pizza kitchens, and coffee kiosks — not just in Shanghai, but in small towns across Yunnan and Inner Mongolia.

Why? Because these businesses have cracked the code on what today’s Chinese consumers want: speed, affordability, digital convenience, and localized comfort. Mixue sells soft-serve and iced tea to 660 people per day, per store. Luckin delivers barista-quality coffee at half the price of Starbucks. DPC Dash promises 30-minute pizzas in markets where no pizza chain never dared go before.

This post breaks down the strategies behind China’s three most interesting F&B chains — Mixue, Luckin Coffee, and DPC Dash — and what their trajectories tell us about value creation, saturation risks, and consumer behaviour in 2025. Whether you’re an investor, operator, or just someone trying to understand how China eats, this is a story of franchise physics, digital dominance, and the surprising resilience of cheap indulgence.

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Food and Beverage Chains in China: Market Analysis and Outlook

China's Food and Beverage (F&B) chain market continues robust growth despite economic headwinds, exhibiting differentiated performance across segments. Tea and ice cream chains demonstrate the strongest expansion, while coffee remains a smaller but rapidly growing category. Quick Service Restaurants (QSR) maintain steady growth, whereas the hotpot segment faces saturation challenges. Key success factors for market leaders include effective digital integration, compelling value-focused offerings, and successful expansion into lower-tier cities.

China's food and beverage chain market has evolved into a dynamic and highly competitive ecosystem, estimated at approximately RMB 1.8 trillion in 2024 and expanding at 5-7% annually (as per S&P Global, 2025). This sector represents a significant component of China's overall consumer economy, accounting for roughly 15% of total food and beverage expenditure. The market has undergone substantial transformation over the past decade, shifting from fragmented independent operations towards increasingly organised chain formats offering standardised products and experiences.

The development trajectory of China's F&B chain market features several distinct phases. Initial entry by international chains during the 1980s and 1990s established a foundation for standardized operations and brand-driven consumption. The 2000s witnessed the emergence of domestic competitors who successfully adapted international models to local preferences. Subsequently, the 2010s brought digital transformation and the integration of online-to-offline (O2O) services. The current phase is defined by format innovation, value-focused offerings, and strategic expansion into lower-tier markets.

Within the broader Chinese consumer sector, F&B chains occupy a unique position, benefiting from and driving changing consumption patterns. As highlighted in previous consumer sector analyses, services consumption has outpaced goods consumption, growing at approximately 7% year-over-year compared to 3-4% for physical products (Source: National Bureau of Statistics, China). F&B chains sit at the intersection of these trends, providing experiential consumption while leveraging digital platforms to extend reach and enhance convenience.

The sector's resilience has been particularly noteworthy amidst economic headwinds. While overall retail sales growth moderated to 4.6% year-over-year in Q1 2025, F&B chains maintained relatively stronger performance. Leading players demonstrated adaptability through adjusted pricing strategies, optimized store formats, and effective use of digital channels, allowing them to navigate challenges ranging from shifting consumer preferences to cost pressures and regional economic disparities.

Types of F&B Chains and Popularity Trends