The bad business idea that suddenly becomes profitable because of volume, volume, volume is an old joke among many experienced entrepreneurs and venture capitalists. (“If we lose $1 a widget, just imagine the possibilities if we tripled our customers!”) But these days, when that “volume” comes from Chinese consumers, that conventional wisdom seems to have gone out the window.
Case and point with China’s burgeoning consumer market for coffee: Is coffee the new black?. Some see it as a massive business opportunity. Others cited in the article have a more guarded view — seeing the current consumption trends rooted in a momentary infatuation with Western culture. A sort of capitalist fashion statement, as it were.
Many of modern China’s aspiring capitalists love making a name-brand fashion statement as much as anyone in Southeast Asia. But I wouldn’t expect the coffee quality in China to become anything noteworthy until a number of fundamental cultural changes take hold. Chinese consumers not only have to prove their coffee interest is more than just a Western fad, but they still need to discriminate between good coffee and bad coffee. That is something that has only just begun in America after decades of cultural coffee-drinking.
And while overly excited financial wonks are treating China like it’s late 1990s dot-com Silicon Valley, the truth is that it is more like the false utopia of 1950s auto-union Detroit.
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