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Italy’s Lavazza Espresso Brand Takes On Starbucks in China

It’s betting a 126-year heritage of offering high-end beans will let it open 1,000 espresso shops in a market the American chain already dominates.
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Illustration: Stella Murphy for Bloomberg Businessweek

For millenniums the Chinese have turned to tea as their beverage of choice, typically jasmine or green varietals sipped from small porcelain cups. Then in 1999, Starbucks Corp. opened a Beijing beachhead that spawned thousands of other outlets across the country over the next two decades and got locals hooked on U.S.-style coffee concoctions, from nitro cold brew to pumpkin spice latte.

Now one of the biggest names in Italian coffee culture says it wants to serve up the real thing. Lavazza Group has big ambitions for its Chinese foray. By 2025 the Italian family-owned company wants to have 1,000 outlets in China. Lavazza opened a flagship outpost in Shanghai last year and has since added more coffee shops across the country. With design features including wall murals, traditional mocha machines, and white marble trimmings, the Shanghai store evokes an air of Italian dolce vita that the company hopes will resonate with Chinese consumers eager to embrace European luxury and style. “Lavazza has the opportunity to be perceived as a quality European brand, with an espresso heritage appealing to the most sophisticated consumers,” says Jeffrey Young, chief executive officer and founder of Allegra Group Ltd., a strategic advisory firm.