I live in Beijing, and as a coffee fan (some would say addict) I
regularly patronise a few coffee shops here. In larger cities
like Beijing, Shanghai, Shenzhen, Xian, there are already a plethora of
Starbucks and Starbucks clones. In the smaller cities there is alot of
room for expansion but the income levels are much lower in the smaller
cities so I can’t see that there will be shops on every corner.

I completely agree with the earlier comment about “oneupmanship”,
however there are now sprouting up some cafes that offer good coffee and
snacks at less than half the price of Starbucks. That new competition
will have to have some effect.

On a side note, China does actually produce some coffee that is quite
good and I assume that it is used in some of the cheaper cafes. Its name is
Yunnan coffee. A standard pack (around 230g) of ground Yunnan coffee
comes in at about 13RMB compared to 50 to 100RMB (or more) for the
familiar European/American brands.

Finally, I would be careful about investing in a small cap going into
the Chinese retail market especially where transactions are
predominantly cash. I would want to know their strategy to avoid fraud.
Alot of money spent in Chinese retail does not end up in the
official accounts. In China this is relatively easy to achieve since
most customers do not ask for the official tax receipts or “fa piao”
for small cash purchases.

I don’t really know anyting specific about this company but I hope that
this general info is of some use.

Smart Money Exposes Greenwashing‏
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