Coffee is poised to become the next big thing in China as the scale of the market is expected to grow to as much as USD 145 billion (RMB 1 trillion) by 2025. In the last decade, American coffee behemoth Starbucks deployed 3,600 stores across China, easily becoming the largest coffee chain nationwide in the process. However, the recent debut of China’s home-grown contender, luckin coffee, has shaken things up. Putting a new spin on the traditional coffee shop model, luckin has become the foremost rival of Starbucks in China by quickly expanding to 2,073 stores in 22 cities across the country by the end of 2018. With ambitious plans to operate a total of 4,500 coffee shops by the end of this year, the “new retail” coffee chain aims to seize the crown to become China’s largest coffee chain.
1. Various shops
Luckin unveiled its “Any Moment” strategy in May 2018. The approach harnesses the power of the Internet and cutting edge “new retail” concepts to facilitate unparalleled customer satisfaction. That’s why each luckin coffee shop is designed according to one of four possible themes, depending on the level of services offered. Theme classifications include ELITE, RELAX, PICKUP, and KITCHEN, and each is aimed towards a specific customer experience.
Flagship ELITE stores as well as RELAX stores are designed to meet customers’ offline social demands, while PICKUP stores will satisfy the needs of business people on the go hoping to grab a quick coffee. KITCHEN stores, by contrast, are specially designed for delivery services.
On February 12, luckin announced plans to launch in 18 additional Chinese cities by the end of April. Including the 22 cities in which it launched in 2018, the coffee chain is expected to operate in more than 40 cities nationwide by the end of this year.
2. Unrivaled convenience
Luckin’s rush delivery service with wait times averaging just 16 minutes sets the brand apart from competitors. With in-app ordering, the company guarantees a delivery time of 18 minutes or less within major cities. Since November 2018, luckin has partnered with China’s largest food delivery giant, Meituan Dianping, and now allows customers to order luckin coffee products via Meituan’s delivery app, Meituan Waimai. By the end of 2018, the company claimed to have achieved its “500-meter coverage” layout in downtown Beijing and Shanghai, meaning customers in the area can arrive at the nearest Luckin’s store within just five minutes.
In addition, luckin has streamlined the coffee purchasing experience, making it simple and nearly instant. When entering a luckin coffee shop, a customer need only spend a few moments scanning a QR code in order to pick up the coffee that he or she has already pre-ordered via the company’s smartphone app.
3. Premium quality
Chinese netizens have already given luckin coffee the nickname “Little Blue Cup”, owing to the company’s signature paper cup that features a white deer emblazoned upon a blue background. In addition to a catchy logo, luckin prioritized the high quality of its coffee. With select Arabica coffee beans and skillful barista teams — two of whose members were World Barista Champion (WBC) regional champions of Italy and China — the company is committed to providing Chinese consumers with a freshly roasted coffee consumption experience. Last December, the brand’s coffee blend was awarded the gold medal at the International Coffee Tasting 2018, an event organized by the International Institute of Coffee Tasters (lIAC) in Italy.
Additionally, American business magazine Fast Company deemed the luckin coffee brand among China’s top 10 most innovative in its well-known annual “Most Innovative Companies” ranking for 2019. Explaining the ranking, Fast Company commented, “luckin is working quickly to make coffee-drinking a habit in China” through fast-growing outposts, innovative app-powered networks, and competitive prices.
4. ‘Blue Partner’ Alliance
On May 8th, 2018, luckin coffee signed strategic cooperation agreements with six famous coffee accessory and equipment suppliers to establish the “Blue Partner” strategic alliance. The alliance includes coffee machine manufacturers Schaerer and Franke, syrup supplier Fabbri 1905, the world’s largest dairy cooperative Fonterra, coffee bean trader Mitsui & Co., as well as professional coffee roaster Yeuan Yeou.
In light of all this innovation, luckin looks poisoned to become the king of coffee in China.
(All photos created by AllTechAsia, and originally from luckin)