Expanding to 20,000 stores and launching high-quality tea drinks, what is Luckin Coffee's confidence?
2024-08-13
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The total net revenue in the second quarter of this year was 8.403 billion yuan, a year-on-year increase of 35.5%. After delivering a record high in quarterly revenue, Luckin Coffee has a new layout.
On August 11, Luckin Coffee officially announced Liu Yifei as Luckin Coffee’s global brand spokesperson and chief recommendation officer for tea beverages, which means that the Chinese coffee giant is constantly expanding its product boundaries and exploring more possibilities.
Luckin Coffee, which is making great strides in the coffee industry, is taking the lead in developing all-day products. In the industry's view, Luckin Coffee's coffee business is "out of reach" for its peers. Against this backdrop, it is only natural for Luckin Coffee to develop tea products and expand new consumption scenarios. Tea and coffee complement each other in the Chinese market, and most of the supply chains of the two businesses overlap. Relying on Luckin Coffee's solid supply chain foundation, it has an inherent advantage in making tea drinks. At present, the main theme of Luckin Coffee is still coffee, and the rise of the tea business will bring new growth points to Luckin Coffee.
Creating Chinese flavor
On August 11, Luckin Coffee officially announced Liu Yifei as the global brand spokesperson and chief recommendation officer for tea beverages. On August 12, Luckin Coffee co-founder and chief growth officer Yang Fei announced on his social circle of friends that the first-week sales of Qingqing Jasmine exceeded 11 million cups, becoming the best first-week sales of new products this year.
Screenshot of Luckin Coffee co-founder and chief growth officer Yang Fei's WeChat Moments
The light milk tea product launched this time does not contain non-dairy creamer, aspartame, or hydrogenated vegetable oil under the default store beverage options and standard production and sales conditions. The whole cup of drink meets the requirements of 0 trans fatty acids and is healthy and burden-free. The seven-scented double-petal jasmine tea used comes from Hengzhou, Guangxi, the "hometown of jasmine in China." Luckin Coffee also launched the "Morning Coffee Afternoon Tea - Send You 100 Million Cups of Afternoon Tea for 9.9 Yuan" event on August 12, allowing consumers to experience a cup of high-quality afternoon tea at a high cost-effectiveness.
Luckin Coffee, which has produced many hit products, has focused on tea products due to its in-depth research on the "Chinese taste". Previously, Luckin Coffee has created a series of "Chinese tea and coffee" products, and traditional categories such as Biluochun, Tieguanyin, and Jasmine have brought surprises to consumers' taste buds. From tea and coffee to tea drinks, cross-track integration and development will also be a new trend in the next stage of development of the Chinese tea beverage market. Based on this, Luckin Coffee has expanded consumption scenarios, relying on its scale advantages, supply chain advantages, and brand advantages to break the boundaries of the track and make early arrangements.
Liu Yifei, Luckin Coffee's global brand ambassador and chief tea recommendation officer. Photo provided by the company
As a Chinese local brand, Luckin Coffee's actions in recent years have all been directed towards one goal - developing products that suit the tastes of Chinese consumers. Tea is a traditional Chinese drink with a history of thousands of years. With the inclusion of "Chinese traditional tea-making techniques and related customs" in the Representative List of the Intangible Cultural Heritage of Humanity, tea has also become a business card for China. For Chinese brands, making tea drinks has natural advantages and is also a unique feature of Chinese brands.
More professionalism is the confidence of cross-border
In the coffee and tea industry, stores, products, and supply chains are the key to success or failure for a brand. Crossing over from coffee to tea products is not just about launching new products, but requires a deep foundation in product menu adjustment, consumer marketing, and supply chain control. Luckin Coffee currently has just such capabilities.
Behind the huge store system is a mature supply chain system. In terms of the number of Luckin Coffee stores, in July this year, the 20,000th Luckin Coffee store opened in Beijing, becoming the first coffee brand in the Chinese coffee market to exceed 20,000 stores. Next, Luckin Coffee will continue to pursue the vision of "creating a world-class coffee brand and making Luckin a part of people's daily lives" to bring consumers more high-quality, cost-effective and convenient coffee.
In terms of products, Luckin Coffee insists on innovative research and development. In the second quarter, 30 new products were launched, including Coconut Latte, Lemon C Americano, Light Coffee Lemon Tea series and other products that are popular with consumers. In April, on the third anniversary of the launch of Luckin Coconut Latte, the sales volume of a single product exceeded 700 million cups; the sales volume of Luckin Lemon Tea, which was launched in June, exceeded 37 million cups, ranking TOP3 in the single product track. The deep product reserves have allowed the industry to see Luckin Coffee's innovation ability and ability to create explosive products. The launch of tea products is within the capabilities of Luckin Coffee.
The frequent release of hits and the maturity of the supply chain have given Luckin Coffee sufficient advantages and capabilities. Professionalism is the most solid foundation, the most powerful engine and the most effective tool of Luckin Coffee. Freshly brewed coffee has strong functional properties and the production process has strict standards. In the entire beverage market, professionalism is extremely high and requires sufficient professional support. This is also the confidence of Luckin's cross-border tea products.
Creating a new consumption scenario
For Luckin Coffee, launching tea products and creating a consumption format of morning coffee and afternoon tea will give consumers more choices.
Luckin Coffee's Jasmine product image. Photo provided by the company
From the perspective of Luckin Coffee's consumer groups, young consumers are the absolute main force. With the explosion of light milk tea products in the new tea beverage industry, Luckin Coffee has "taken over" the entire day of young consumers by launching new products. A cup of coffee in the morning to refresh the mind, and a cup of light milk tea with friends in the afternoon to spend a good time. The essence of Luckin Coffee's promotion of tea products is to meet the increasingly complex and diverse consumer needs, provide customers with new choices, and new consumption scenarios also allow consumers to experience different consumption experiences.
Consumer demands are diversified, and brands need to expand their business scope, which is determined by the current competitive environment of China's beverage market. While tea brands are making coffee in different modes, coffee brands are also making tea drinks to meet the diverse needs of users, increase user stickiness, and further expand the brand's customer acquisition path.
In the view of industry insiders, Luckin Coffee has a huge user base in the Chinese market. Based on the trust and recognition of the coffee brand, coupled with the outstanding products and supply chain behind it, it can be foreseen that the tea beverage business will bring more surprises and expectations to the beverage industry.
Text/Wang Ziyang
Editor: Qin Shengnan
Proofread by Chen Diyan
