As sales have lagged somewhat in their home markets, both Costa Coffee and Starbucks are looking at international expansion to drive growth.
China is considered a key market here. According to GlobalData, retail sales of hot drinks in China alone will hit $34.2 billion by 2022, and hot-drinks volumes across all channels have more than doubled there in the past five years.
Starbucks, which is currently the leading chain with 2,800 locations in China, is aiming to double its store count to 6,000 locations and triple its revenues over the next five years.
Starbucks CEO Kevin Johnson said in May that the company is looking to push "a coffee culture in China where the reward will be healthy, long-term, profitable growth for decades to come," CNN Money reported.
Earlier this month, Starbucks also announced a deal with Chinese e-commerce giant Alibaba to expand its delivery services throughout the country.
Meanwhile, Costa Coffee, the second-largest coffee chain in China with more than 400 locations, has its own expansion plans.
In October 2017 Costa Coffee bought Yueda, a Chinese coffee chain with which it had operated a joint venture in China for more than a decade. Several months later, in April, Costa Coffee CEO Allison Brittain announced that the company was looking to spin off from its parent company, Whitbread, in order to facilitate its expansion plans, pointing to China as a key area for growth.
"Costa will become a listed entity in its own right and the clear market leader in the out-of-home coffee market in the UK," Brittain, said in a statement at the time. It will be "well positioned to build further on its strong international foundations with growth expected in China and Costa Express."