Chinese coffee consumption is growing quickly, spurring cutthroat competition between local and foreign coffee chains that have opened thousands of branded shops in recent months and surpassed the number of coffee stores in the United States.

Analysts expect China's growing thirst for coffee to be a key driver of future demand for the beans as coffee shops expand beyond Beijing and Shanghai to dozens of midsized cities where young professionals have warmed to the beverage.

The United States Department of Agriculture sees China using 5 million bags of coffee in 2023/24, which makes it the world's seventh-largest consumer.

China's rising coffee demand is an opportunity for international chains like Starbucks and Tim Hortons that are investing heavily in China, though they face a steep challenge from rapidly expanding local brands.

But there is also harsh competition between the local chains and international chains. Each one is trying to grab as big a share as they can of the growing market.

Alegra Group estimates China's Luckin Coffee added 5,059 stores in the last 12 months, while another Chinese chain, Cotti Coffee, opened 6,004 outlets in the period.

U.S.-based Starbucks opened 700 stores in China in the last year and said it is on track to operate around 9,000 stores in the country by 2025, while Canada's Tim Hortons plans to have 3,000 stores in the country in four years.