Abstract
Coffee, tea and cocoa are known as the most popular drinks in the world. The market of coffee is worth billions of dollars around the world, and the population who consume coffee is more than 1.5 billion. A cup of coffee takes a long journey from initial coffee growing to beverages in consumers’ hand, and the value of coffee increases at least 70 times during the process of production. Besides, International Coffee Organization (ICO) also revealed that the global coffee consumption in 2014 was around 9 thousand tons which is nearly 2 billion cups of coffee consumed per day. The enormous consumption shows the increasing popularity of coffee. Even though 70% of coffee is consumed in western countries, the market of China cannot be underestimated. With the rapid development of economy in China, Chinese people have started accepting the existence of coffee. Despite Chinese people are accustomed to having tea as daily beverage in the past time, the younger generation has brought coffee into daily life and considered coffee as a symbol of “hipster”, which made coffee become the mainstream of beverages as well. Hence, coffee has popular and its sales increased rapidly in China. With the solid evidence of growing coffee market, it is important to understand the successful business model of starting coffee business in China. This study uses Company O as a case to investigate the profitable coffee business model in Shanghai and understand the approach to bring coffee culture into Chinese market. By interviewing the founder of O, Bill, we can realize the process of approaching Chinese coffee market and how to develop such foreign icon beverage, coffee, in China. The results of this study discovers three key elements of the business model, which are the management of key partners, consistency of value proposition, and flexibility of customer segments. This study can provide some insights for those coming new entries who want to invest in Chinese beverage market.