HONG KONG - Competition for China's cappuccino drinkers is percolating, after China Resources Enterprise (CRE), a Beijing-controlled conglomerate and the company's biggest supermarket operator, announced its intent to overtake Starbucks and become the country's biggest coffee chain, the Financial Times reports.

CRE announced earlier this week that it would buy 80 percent of Hong Kong-based Pacific Coffee and expand on the mainland, tapping in to China's expanding coffee culture.

Experts predict retail coffee consumption in China will increase more than 35 percent by 2014, and CRE said it would take advantage of that growing popularity, installing an outlet "in every one of our major malls."

Frank Lai, CRE deputy managing director, said among the company's 2,900 retail outlets in China, nearly 200 are considered "major malls."

However, CRE's plans are expected to be met with stiff competition.

Starbucks entered China in 1999 and is the country's number one coffeehouse with about 380 stores, with plans to expand. However, Lai remains undaunted by the challenge, saying CRE would grow rapidly by leveraging the company's retail presence and its customer base.

"It took us 15 years to become China??s largest brewer. We built the biggest supermarket chain in just six years. It??s down to Pacific Coffee to break that record," Lai said. "Competition is always intense in China, no matter what sector you are in."