Since opening its doors in the country in 1999, Starbucks now has 1,001 stores. Dubbing China its second major market, the company plans to expand its outlets to 1,500 by 2015.

Yunnan brews up cups of success

Starbucks upbeat about China

"Residents in Fushan town, old or young, like to spend time in coffee shops. They may not know Starbucks, but they can name every local brand," said Xu Shibing, chairman of Hainan Coffee Association.

Coffee mainly grows in the provinces of Yunnan, Hainan and Sichuan.

Coffee grown in Yunnan accounts for more than 90 percent of China's total production, but over half of the output has been exported as crude material over the past years.

Xu said that the country boasts a few domestic coffee brands, mainly small enterprises or crude material producers. Very few of them can compete with foreign brands.

Sophisticated coffee-planting and coffee-making techniques, the lack of professional experience, and the absence of proper industry standards are major challenges for Chinese coffee companies.

Ji said that it is important for the country's homegrown coffee brands to focus on combining foreign coffee culture with local features to nurture people's consumption habits.