Luckin Coffee, the fast-growing coffee shop chain is continuing its exponential growth in the new year, with over 10 new chain stores popping up in the Xianlin area of Nanjing’s Qixia District alone.
Established in October, 2017, Luckin raised $200m in A round financing (new investor funding) just last month, a vote of confidence in the brand’s tremendous expansion; more than 500 chain stores opened up in 13 cities across the country in only half a year, according to Xinhuanet.
That which makes Luckin Coffee different from other traditional coffee brands, and competitors, such as Starbucks, is its target consumer; a young generation of white collar workers, its fast delivery and convenient self-service pick-up that save time, in addition to pop-up-office-building shops.
Such shops, as well as cafe-style venues and online options, drive Luckin’s success. Last week, a new Luckin Coffee shop opened on Ninghai Lu in Nanjing’s downtown, where a lot of offices and schools are located, indicating the company’s wise location targeting. Back in Xianlin, two innovative tech buildings each welcomed Luckin pop-up shops in their first-floor foyers.
An employee of one told The Nanjinger, “I prefer to work here [Luckin Coffee] rather than in Starbucks, as I see it is promising and growing so quickly in Nanjing”.
The coffee startup’s fast growth is contributed to its brand-new marketing strategy. Qian Zhiya, the CEO of Luckin Coffee, points out, “Luckin Coffee breaks the traditional marketing mode of the coffee industry in China”, that high prices and inconvenient pickup methods are the two dominant weaknesses for expanding coffee shops in China, according to 36Qing.com. Therefore, Luckin Coffee uses to its advantage the combination of online and offline marketing, in order to realise a most-effective balance between cost and profit.
In terms of online marketing, the company has not only concentrated on celebrity charm, in order to expose its brand. On the contrary, Luckin Coffee brings to the table a new business retailing method, one which maintains their consumer base by offering hard-to-turn-down coupons. Consumers receive their first drink for free once they download the app, and every time consumers share purchases in Wechat, they can enjoy further discounts on following purchases.
Such steps that help build brand awareness are key to the new online retailing method that works perfectly for Luckin Coffee. The new shops in Nanjing reinforce Luckin as a trend leader in online retailing methods that more and more businesses will no doubt replicate.