The coffee industry in China is uproaring because of the newbie Luckin Coffee who took by storm in the Chinese coffee market. This new coffee shop is said to be the rival of Starbucks in China.
It is no surprise why Starbucks is a powerhouse in the coffee business, where they are always ahead from its competitors it is because they know what their costumers want, and the Starbucks Reserve Roastery in China and the newly opened Starbucks Reserve Roastery in Tokyo Japan shows what Starbucks can offer.
However, the big coffee chain seems challenged by the start-up coffee company the Luckin Coffee in the Chinese market. In a short amount of time, this newbie in the coffee industry is almost near to its goal to open 4,500 stores across China, aiming to outnumber the world best-known coffee chain Starbucks which have 3,600 locations in more than 150 cities in the country.
Luckin coffee outgrowing number of retail outlets focuses on the convenience of the consumers where there is easy access to coffee for all the coffee lovers at any time and anywhere. They are up to their game, where their vision is to provide accelerated service with its fast phase technology, delivery, and big discounts.
Each Luckin Coffee outlet stores operates using a smartphone which every customer are required to download the Luckin Coffee App where they can order their choice of coffee. So instead of telling the barista your order, each customer can conveniently browse their mobile phones and order a cup of Joe. The payment method also suits the Chinese consumer lifestyle which they can use their Wechat wallet to pay for their coffee or use the Luckin Coffee wallet included in the Luckin Coffee application service. Luckin Coffee does not accept cash payment, because everything is already in smartphones, which fits with China’s “new retail” trend.
Aside from the on-trend application Luckin Coffee have that caters with most of the Chinese consumers, and the fast phase growing number of their retail outlets Luckin Coffee also offers affordable prices for their coffee drinks. A large Americano costs 21 yuan ($3.15), a matcha latte 21 yuan, and a Hawaiian pineapple wrap is 9 yuan which is relatively cheaper than their rival Starbucks that sells their coffee in China costly than Starbucks in the US.
According to Luckin coffee chief of marketing Yang Fei, what Lucking Coffee want at the moment is scale and speed, whereas profit is not yet an issue for what’s important is the solid foundation that company has to stand for the next few years to come.
However, despite this surprising news about this new coffee chain in the industry, many were arguing if this newcomer, who only have a year of experience in the industry can positively surpass Starbucks which has a decade building their empire in China. To trackback Starbucks history in entering the Chinese market, they began in the Mainlands in January 1999 opening its very first store in China World Trade Building, Beijing. The big coffee chain did not have a swift business during their first step in the country and took them years building their solid foundation in China.
Well, having a lot of retail stores, big discounts, high-tech applications, and low prices are wondrous! However, product quality and service provided are also important factors to be on the leader boards and not just the numbers.
With the years of experience the Starbucks company have, can Luckin Coffee beat all the odds to become the leading coffee chain in the industry?