How the coffee shop culture became popular in the city

Walk the streets of Shanghai and its cafe culture is not lost. There are certain places where you can't turn without passing another small cafe.

The Chinese capital now has so many coffee shops that the government says it has the most of any city in the world.

The city's cafe culture has developed over the years, but post-Covid openings have given it a boost, as locals embrace living outside, looking for places to meet friends and family.

However, with many new establishments, competition for customers has intensified. Most of the owners we spoke to do not think that all these businesses can survive.

Shanghai officials say “there are more than 8,000 restaurants in the city”. And the Shanghai International Coffee Culture Festival report, recorded 9,553 coffee shops by the end of 2023.

And it's not just the number of shops that sets Shanghai apart.

Where other Chinese cities are still dominated by large coffee chains like Starbucks and its local rival Luckin, Shanghai's cafe explosion is fueled largely by niche, independent shops, such as Hidden Track.

Owner Dong Xiaoli says he “had no choice” but to enter the industry first because he loved coffee so much.

But it was not easy.

Asked what advice he would give to someone considering following in his footsteps, he laughs and replies: “I would say don't do it.”

“The investment versus return is terrible. You need to buy expensive equipment and spend a lot of money on decoration. You earn very little compared to other industries.”

To succeed in this crowded market, having a unique vibe has become as important as anything else in attracting customers.

Hidden Track has gone for a limited menu and a simple, minimalist vibe that paves the way in a welcoming way.

The storefront here is considered hip and urbane, and that has helped drive younger customers through the doors. Cafes have become a social event where many young people dress up and meet to drink coffee and chat.

Shanghai residents who have long seen themselves as inheritors of the outward-looking, cosmopolitan attitude of Shanghai in the early decades of the 20th century, are also proud of their cafe culture.

“Shanghai has long been a trading city: we started drinking coffee a long time ago. Small towns will gradually get different types of coffees,” said another man sitting in a shop.

A woman nearby admits that the culture of the restaurant is now strong. Asked how many cups of coffee he drinks a day, he laughs loudly and replies: “As many as I like.”

And as cafes grow, so does the desire to explore.

The coffee drinkers of this tea giant are eager to try new flavors and drinks.

Yuan Jingfeng, who runs the R1070 food stall, says all his beans come from Japan.

“My expenses are very high. The beans I buy from other countries include American and Italian styles, they are all bought in Japan and put in their original packaging,” he said.

“Shop prices have gone up a lot in the last few years. The wars in Yemen and Ethiopia have both had an impact. Good beans are decreasing while the number of coffee drinkers is increasing.”

But, so far, he says he has refused to pass on the increased costs to his growing coffee base.

AC café is deaf accessible and employs deaf baristas.

Yang Yanfang – who interprets in AC for those who can't speak with sign language – says that, after the epidemic, “friends are really willing to meet for a coffee or a drink and Shanghai has become a city with a really strong coffee culture.”

“I can skip meals, but I can't skip my coffee,” he adds.

And this is not the only cafe of its kind.

Another popular cafe, staffed by blind workers, serves coffee through a hole in the wall, from a man wearing an armful of a monkey suit, to customers waiting on the street.

In one street, we counted 18 cafes within just a few meters. They all had many customers inside.

The owners hope this won't just be a passing fad.

According to some estimates, China's coffee market was worth more than 260 billion yuan (US$35bn) last year. It is estimated that it could rise by another hundred billion (US$13bn).

The market for coffee shops is said to have grown by 58% last year, according to the World Coffee Portal.

Since the overheads are very high in Shanghai, many coffee shops cannot afford their premises under night use. So, when the sun goes down, they turn their cafes into bars, sometimes with live music.

The owner of Flower Café and Bar, Wang Xi, has a prime location with a clear view of the city. His scores are very strong but, for now, his career is still alive.

He says: “I have a lot of hope. “I hope that China's economy will quickly return to pre-pandemic levels. If the economy flows again, everyone will benefit.”

China's economy may be facing major challenges but, as Wang Xi speaks, he looks at the customers sitting at small tables and chairs staring down Suzhou Creek at the glittering Shanghai skyline and – on this night – it's hard not to share his optimism.