Even you haven’t tried its coffee, you must have heard the name; Luckin’ Coffee, whose commercial plays on repeat in every office building, is now an Internet frenzy that has taken less than 6 months to seize China’s east coast.
The local brand (Chinese name; 瑞幸咖啡) was founded with an initial investment of ¥1 billion by Lu Zhengyao, CEO of car rental company Ucar, Inc. In just a few months, it has made a name for itself among coffee consumers in China, applying a brand strategy it calls “Any Moment”, that entails a combination of delivery services, lower prices and smaller-sized, hence more cost-effective stores.
By offering coffee at a price lower than Starbucks with a quality higher than McDonald’s, Luckin’ Coffee has opened their brick-and-mortar stores in 13 cities across China and completed 3 million orders, selling 5 million cups, according to China Daily. Meanwhile, by offering enticing coupons and hiring Shunfeng, widely regarded as the best courier service, to ensure all coffees be delivered within 15 minutes, the company has charmed over 1.3 million coffee lovers into downloading its APP where it collects the necessary consumer data that dictates where to open its next stores; a competitive factor for the company to grab Starbucks shares.
In the face of rival’s unrelenting challenges, Starbucks has announced its plan for delivery service in China. But Wang Zhendong, chairman of consultancy firm Shanghai Feiyue Investment Management, told China Daily that “Starbucks would find it very challenging to work with third-party delivery companies if it is not willing to share its customer database.”
That data, not coffee, is what really sells, gives businesses in China an omen, either good or ill. In a country of foodies where digits are getting smarter, and people lazier, the demand for convenience is vitiating the effectiveness of old business models. Given how Luckin’ Coffee has seized its momentum and fired lawsuit against Starbucks, accusing it of market monopoly and other conventional tricks, it is quite plausible that the coffee brand resolves to challenge not just a franchise, but the entire business model, and to take out corporate evils by invoking a deeper hell.
