CBN Friday Special丨Coffee drinking culture in China brews battle in brands

Luckin Coffee is back and bigger.

The Chinese Starbucks competitor that became mired in a fraud scandal in 2020 and got kicked off Wall Street, is making a strong comeback.

Luckin reported a stellar performance in the second quarter of 2023, turning a net loss of 114.7 million yuan to a gain of nearly 1 billion yuan in the comparative quarters.

Total revenues rose 88 percent to 6.2 billion yuan, as the coffee chain expanded its footprint with 1,485 net new stores opening worldwide, including five in Singapore, ending the second quarter with 10,836 outlets.

The opening of the new Xiamen store on June 5 saw Luckin reach a milestone to become the first coffee chain to open 10,000 stores in China, beating out foreign and domestic competitors alike. Starbucks China is reportedly aiming to open 9,000 stores by 2025 and buzzworthy homegrown rival Manner Coffee’s outlets currently number only in the hundreds.

Much of the income in the latest quarter have been brought by an influx of customers, as Luckin had a MAU of 430.7 million by the end of June, more than doubling from the same period last year. And its monthly transacting users reached 50 million in June for the first time in history.

A big part of the Chinese firm's appeal comes from discounts and convenient takeout experiences. Luckin Coffee launched promotional events in June to celebrate store anniversaries and issued weekly vouchers to offer coffee for just 9.9 yuan per cup. The events were welcomed better than expected and the firm decided to extend the campaign by at least two years to increase its market share, Guo Jinyi, chairman and chief executive, said during a meeting held to release the results.

Coffee drinking culture catches on 

China is probably the last place where one would expect a large group of consumers to overwhelmingly take to coffee.

Coffee reportedly made its initial appearance in China when a French missionary planted coffee beans throughout Yunnan Province in the 1890s. The drink would go largely unnoticed for the following hundred years. 

Traditionally home to products like oolong and Longjing (Dragon Well) tea, the country is, however, slowly seeing consumer preferences and consumption patterns evolve in favor of the dark beverage.

In 2021, China’s coffee market grew by 31 percent over the previous year and is projected to increase at a compound annual growth rate of 9.63 percent between 2022 and 2025.

As the population of Chinese coffee consumers continues to grow, in 2022, the coffee segment will generate US$15.34 billion in revenue.

The country's coffee industry is expected to maintain a growth rate ranging from 25 percent to 35 percent in the coming years. By 2025, it is projected that the overall market size nationwide will exceed 1 trillion yuan from 381.7 billion yuan in 2021, according to a report released by Alibaba Group Holding's research arm AliResearch.

The number of coffee shops in China has reached 148,000, equal to 10.5 per 100,000 people, according to data from catering sector research firm Canyan Data. Some 53,000 new stores were opened in the country in the past year, a net increase of 19,500.

The coffee battle heats up

Although more people in China are embracing the coffee culture, per capita coffee consumption in the country still lags behind that of developed nations like Japan, South Korea, and the United States. This has caught the attention of both global and local coffee brands, who recognize the immense untapped potential of the Chinese market.

In big cities such as Beijing, Shanghai and Guangzhou, people drink about 300 cups of coffee a year, close to US levels. But across mainland China as a whole, the average is just nine cups, according to Deloitte data.

The fierce competition between global coffee chains such as Starbucks and Costa, and domestic players like Luckin Coffee and Manner Coffee, coupled with surging demand for coffee makers and beans sourced from various countries, have resulted in a greater number of coffee shops springing up across the country, leading to a significant increase in coffee consumption.

Industry insiders noted that big coffee chains previously held off from opening stores too close to each other. But now, everyone, even international brands, are opening stores regardless of the location to try to seize as large a market share as possible.

In addition to the faster pace of openings, coffee chains have turned to promotions, including price cuts and new products such as durian latte and avocado coffee. Promotional pricing is the sales strategy mainly embraced by emerging coffee brands. For example, Cotti cut the price of all products to 9.9 yuan per cup in February, and in May that was further lowered to 8.8 yuan. It offered new customers coffees for just 1 yuan throughout last month. Starbucks, which initially shunned competing directly with emerging brands, has stepped up efforts to launch new products.

Others are teaming up with famous brands to boost their appeal. For example, Yongpu Coffee joined with liquor maker Wuliangye to launch a special liquor-infused coffee product.

Manner Coffee recently opened a time-limited bookstore with French fashion house Louis Vuitton. Previously, it launched joint products with French high-end skincare brand Helena Rubinstein.

In recent years, the term “Chinese style” has grown to encompass a wide range of items, beyond simply those with traditional Chinese cultural components, and is associated with many aspects of contemporary Chinese lifestyle – including coffee habits.

For example, Tong Ren Tang, the largest producer of traditional Chinese medicine, has established a sub-brand called Zhima Health and has introduced coffee products infused with traditional Chinese medicine concepts at seven new stores in Beijing.  

All eyes on the “sinking market”

Apart from first- and second-tier cities, coffee consumption is also expanding in lower-tier cities, or known as the “sinking market”. Meituan's data shows that last year, third-tier cities experienced the fastest growth in the number of coffee shops, reaching a growth rate of 19 percent.

This rapid expansion into smaller cities is advantageous for large on-premise coffee brands due to lower expenses on management, labor and rent compared to major cities, said Wang Qi, vice-president of the Beijing-based China National Food Industry Association.

Luckin has been targeting smaller cities for years with a franchise model it calls “retail partnerships,” more commonly found in fast-food industries such as milk tea and fried chicken. This typically sees Luckin stores take up small spaces with lower operating costs and rent compared to its foreign competitors.

Moreover, Luckin’s modus operandi is hyper-convenient takeaway coffee. Customers pre-order on an app, drop into the store to collect their coffee, and take it to go with virtually no queuing and no staff interaction necessary. Opening as many stores as possible to maximize the brand’s visibility has been Luckin’s primary expansion strategy so far. This is aided by the pre-order and takeaway model, which keeps overhead and staffing costs low and requires far less real estate.

Luckin has long powered its growth through spendthrift marketing expenditure and unsustainably deep discounts, the new generation of Chinese coffee brands instead caters directly to the tastes of young consumers via clever brand collaborations, social media-ready limited-edition beverages, and sustainability-based efforts, as well as affordable but not solely deep discount-based pricing.

It is the value proposition of being “Starbuck cheaper alternative” that will be most interesting to watch as Luckin continues its comeback tour. Will it crack the code and sort out its unsustainable pricing and discounting strategy to achieve long-term revenue that can offset massive marketing expenditures?

Illustrating Luckin’s new strategy is a recent recruitment notice for retail partners, which specified 20 fifth-tier cities and four fourth-tier cities in provinces such as Gansu, Yunnan, and Heilongjiang. By the end of 2022, retail partnership stores represent more than 30 percent of Luckin’s stores nationwide, up from just 10 percent in March 2020.

Luckin’s ability to provide coffee at a lower price is also related to its strong supply chain control capabilities. Luckin built its first coffee roasting base in Ningde City, Fujian Province, with an annual baking capacity of 15,000 tons of coffee beans. The base is equipped with a full set of imported equipment, which can realize fully automated production from raw bean processing, baking, packaging, palletizing to storage, while the second baking base is located in Kunshan, Jiangsu Province.

Delivery is a staple of life in China: food, cosmetics, pet products, and nearly anything else are but a click away. Luckin’s strategy to support a delivery service for single cups of low-price coffee was immediately accepted by Chinese consumers. 

By comparison, grabbing a coffee in a traditional café quickly felt inconvenient. There is no denying that Luckin is an innovative market leader. However, consumers who drink delivery coffee from Luckin and those who choose to sit in specialty coffee shops fall into different categories: those who seek caffeine and convenience and those who seek taste and experience. 

Starbucks, for example, has chosen to stick to the somewhat high- end market, focusing on not just the coffee but the experience. In the third quarter of fiscal 2023 (ended July 2), Starbucks China revenue was $821.9 million, up 60 percent year over year. Starbucks added 237 net new stores in China during the reporting period, more than the previous two quarters combined. At the end of the third quarter, Starbucks China operated 6,480 stores in 250 cities.

"We are focused on delivering a premium coffee experience that cannot be replicated by other brands. We are able to serve customers' diverse consumption scenarios and needs,” Wang Jingying, chairman and chief executive of Starbucks China, said on an earnings call recently. Starbucks is clearly not giving up on its value proposition, even when a price war is closing in on its comfort zone. Still, Starbucks plans to have 9,000 stores in China by 2025.

9块9瑞幸，杀疯了。

瑞幸，凭一杯“生椰拿铁”在年轻消费者喜爱的一众品牌中脱颖而出。无论是一季度的爆款产品“碧螺知春拿铁”，还是深受大家喜爱的“喊你上班”利路修、哆啦A梦和悲伤蛙联名，瑞幸总能准确踩准年轻人的喜好，网友称“瑞幸，你是懂年轻人的”。在社交媒体上，“瑞吗”“今天瑞点啥”成了年轻人的新口头禅。无论是加班、学习亦或是纪念日，“喝一杯瑞幸”已成为了不少人的新日常。

8月1日晚间，瑞幸咖啡公布最新的业绩。财报显示，瑞幸咖啡第二季度总净收入为62.014亿元人民币，同比增长88.0%；净利润9.987亿元人民币，上年同期亏损1.147亿元人民币；截至2023年6月30日，瑞幸咖啡现金及现金等价物、限制性现金、定期存款和短期投资为人民币52.564亿元。

财报显示，2023年第二季度瑞幸咖啡在美国会计准则（GAAP）下营业利润为11.728亿元人民币，营业利润率为18.9%。

从门店运营层面来看，瑞幸咖啡自营门店收入第二季度为44.953亿元人民币，较2022年同期的24.27亿元人民币增长85.2%。自营门店门店层面利润第二季度为13.075亿元人民币（1.803亿美元），自营门店门店层面利润率29.1%，2022年同期为6.898亿元人民币，门店层面利润率为28.4%。联营门店收入第二季度为14.858亿元人民币（2.049亿美元），较2022年同期的7.775亿元人民币增长了91.1%。

此外，第二季度瑞幸咖啡门店规模进一步扩大，净新开门店1485家，总门店数量环比增长15.9%。截至第二季度末，瑞幸咖啡门店总数达10836家，其中自营门店7188家，联营门店3648家。瑞幸咖啡成为中国市场第一家门店数量破万的连锁咖啡品牌。

瑞幸咖啡月均交易客户数第二季度为4307万，同比增长107.9%。6月瑞幸咖啡交易客户数达到5000万，创历史新高。瑞幸方面称，为答谢消费者的支持，瑞幸咖啡“9.9元”感恩回馈活动将常态化进行下去，此次活动将至少持续两年。

瑞幸咖啡董事长兼CEO郭谨一说：“2023年下半年，我们将持续加大投入，关注客户价值，将规模优势转化为对消费者的长期回馈。同时，我们也将致力于加速中国咖啡市场的教育和发展，扩大瑞幸咖啡市场份额和品牌影响力，推动可持续的海外拓张，让全世界都能享受到中国咖啡品牌的高品质产品和服务。”

瑞幸将9.9元喝咖啡的优惠变成常态活动的同时，库迪咖啡把价格打到了8.8元；本以为幸运咖5元的美式已是极限，奶茶品牌CoCo的3.9元现磨美式再次打破了认知。随着象征“优雅、小资”的咖啡高光不在，人们不禁疑惑：咖啡真的要从“质感生活”撞进“人间烟火”了吗。

看上去的确如此。

根据《2023中国城市咖啡发展报告》，随着中国咖啡行业步入高速发展阶段，中国咖啡产品的供给愈发多元丰富。其中“性价比咖啡”快速突出市场重围，进一步推动咖啡走向大众化。

中国咖啡消费市场崛起

《2023中国城市咖啡发展报告》显示，中国咖啡作为咖啡消费新兴力量，复合增长率高达12.5%，发展潜力巨大。电商平台数据显示，2023年4-6月，咖啡店的团购订单量同比增长250%，是各类饮品中增长最快的品类。

《2023中国城市咖啡发展报告》调研数据及美团外卖近3年数据显示，大多数消费者养成每周饮咖习惯；同时，随着消费时段拓宽、频次提升，约25%的消费者甚至每天一杯起，早晨及晚上饮用占比也逐年提升。

伴随着国民咖啡消费习惯的养成，咖啡行业保持高速增长。预计未来几年，中国咖啡行业基本保持25%-35%的高速增长。根据美团数据测算，2025年中国咖啡产业规模预计将达到3693亿元。

面对如此巨大的市场，各路“玩家”纷纷入局。天眼查App显示，我国目前有超18万家咖啡相关企业，2023年新增约1.48万家咖啡相关企业，同比2022年同期增长3.79%。截至5月，我国约有现存咖啡相关企业18.76万家。

IT桔子数据显示，今年以来，咖啡赛道至少发生了10起融资事件，可统计的融资金额合计13.65亿元。

在国内市场上，连锁咖啡馆品牌既包括星巴克、Tims、COSTA等欧美连锁企业，也包括瑞幸、Manner、M Stand、%Arabica等本土新锐选手，呈现出新老品牌分庭抗礼的竞争格局。

研究团队采用熵权TOPSIS方法对连锁咖啡店进行客观测量得到的最终排名中，中国主要连锁咖啡店排名第一名为星巴克，第二名是瑞幸咖啡。前者以优质的咖啡产品与舒适的门店氛围闻名遐迩，后者以高性价比产品突围破圈，已经成为中国门店数量最多的连锁咖啡店。

相较之下，Tims中国与COSTA排在第三和第四名，Manner、M Stand以及%Arabica分列第五至七名。

除了主营咖啡的各位“玩家”，越来越多看起来毫不相干的企业也在积极跨界“挤赛道”。例如，中国邮政首家邮局咖啡在厦门落地，运动品牌制造商李宁推出自家咖啡品牌，新能源汽车制造商蔚来申请注册4枚咖啡商标，华为也申请注册了咖啡商标，同仁堂、脑白金、猿辅导、悦刻、飞利浦等企业也纷纷开出咖啡门店或布局咖啡业务。

据正式进入了咖啡赛道的李宁选手透露：开“NING COFFEE”，是希望通过优化店内服务，提升顾客在购物时的舒适度和体验感。与李宁等品牌为扩充消费场景而布局咖啡业务不同的是，中国邮政、“猿辅导”等选择将咖啡业务单独列出。邮局咖啡一看就是个新鲜的东西，适合在社交媒体上传播，更容易获得消费者的新奇感。

而在过去很长一段时间，咖啡几乎都是外资品牌的天下。而近几年来，在资本加持以及行业发展下，本土咖啡品牌迅速崛起，涌现出瑞幸咖啡、Manner、Seesaw等一系列国产品牌。

《2023年咖啡赛道专题研究报告》显示，与国际连锁品牌相比，本土品牌对中国市场的用户需求、中式咖啡文化、社交和营销场景等方面都有着更本土化的理解。针对不同用户、不同场景的垂直赛道，本土咖啡品牌的创新玩法正一步步动摇着国际连锁品牌长期引领中国咖啡市场的行业竞争格局。

抢占下沉市场

从前一提到白领，人们可能会立刻联想到《穿Prada的女王》中时尚女性人手一杯星巴克的场景。然而，不知何时起，9.9元的生椰拿铁、5元的冰美式悄然占据了写字楼，成为白领办公桌上的常客。

随着一、二线城市咖啡市场的竞争日趋激烈，咖啡品牌企业正不断向“下沉市场”发展，“下沉市场”成为下一个增长点。一众品牌“含泪半价腰斩”自家商品，其目的不外乎希望以低价抢占县域农村咖啡消费市场。

京东消费及产业发展研究院联合京东超市发布的《2023咖啡与茶消费洞察》显示，今年一季度，咖啡在县域农村市场的用户数同比增幅达110%，县域农村市场的人均咖啡消费金额也在增加。

瑞幸创始人成立的第二个咖啡品牌库迪，放言今年7月底将拓店至5000家，其中6月-7月新增千家门店中，以下沉市场为主。5月，瑞幸咖啡官微消息宣布正式开放瑞幸咖啡联营合作伙伴“带店加盟”模式，三线及以下城市是瑞幸咖啡此次开放“带店加盟”的重点区域。

业绩交流会上，瑞幸咖啡董事长兼CEO郭谨一也对瑞幸的市场空间给予期待：“无论是一二线城市、还是在低线城市，能够达到瑞幸选址要求的可选点位仍然非常多，市场空间远远没有达到饱和”。

此外，麦当劳、蜜雪冰城、奈雪等其他餐饮品牌均推出咖啡品类，在布局门店同时瓜分下沉的咖啡市场。

过去，雀巢和星巴克这样的海外巨头将咖啡作为一种生活方式带入中国，并塑造了对于速溶咖啡与连锁咖啡门店的商业范式。

现在，以瑞幸为代表的本土后来者，则用更符合中国消费者口味的创新产品、更低客单价的产品以及更灵活的扩张方式，迅猛进攻下沉市场，并实现咖啡对更广泛消费者的触达和普及。

随着本土咖啡品牌推动咖啡大众化，咖啡真正地成为消费者的日常饮品，其个位数的售价还是令消费者担忧：这真能赚钱吗？

也许的确可以。

以瑞幸为例，瑞幸作为一家快速崛起的咖啡巨头，其店面规模和供应链控制能力非常强。6月5日，随着厦门中山路旗舰店开业，瑞幸咖啡在中国市场的门店数量达到10000家，如此庞大的门店数量让瑞幸有比较强的规模经济效应，可以以更低的价格提供产品。

瑞幸能够以较低的价格提供咖啡，也和其较强的供应链控制能力有关。在咖啡生产和运输环节中，瑞幸能够有效地压缩成本，瑞幸首家咖啡烘焙基地位于中国福建省宁德市，总投资2.1亿元、占地面积4.5万平方米，咖啡豆年烘焙产能1.5万吨，该基地配备了全套进口设备，可实现从生豆处理、烘焙、包装、码垛到仓储的全自动化生产，而第二家烘焙基地则在江苏昆山，通过自建供应链从而可以将价格控制在较低的水平。

此外，瑞幸重新东山再起之后，本身的资本力量也逐渐恢复。2023年07月20日，瑞幸咖啡宣布完成2亿美元B轮融资，投后估值22亿美元。而资本的注入，也让瑞幸具有更强的实力来进行市场竞争，同时也可以有更多的资源来支持其产品品质的提高。

星巴克也首次对“价格战”问题作出回应。

“我们欢迎竞争，因为竞争实际上扩大了咖啡市场并加速了咖啡消费的普及，且不同的品牌为消费者带来不同的价值主张和消费场景。”星巴克中国董事长兼首席执行官王静瑛表示，星巴克中国将加大投资，进行产品创新，提升门店体验、数字化以及人才培养，抓住未来中国市场的无限机遇。

按照她的说法，竞争对于星巴克第三季度的业绩并无明显影响，并且强调星巴克在“玩长期游戏”。

事实上，瑞幸能从容应对价格战的策略，已经是一套完整而成熟的打法。

曾经做空瑞幸的雪湖资本近期在评价该品牌时，总结出它基于规模效应的竞争壁垒。

其一是产品上新快，瑞幸产品的丰富度是星巴克的1.7倍，是幸运咖的2.4倍，是Manner的3倍；其二是品牌建设与数字化优势；其三是低线城市和供应链的先发优势，其低线城市门店是星巴克的2倍，选的也都是顶级供应商。

另外，瑞幸之所以能在门店数量上快速扩大，其策略在于直营与联营加盟结合的模式。它最近甚至还开放了“带店加盟”模式，进一步以较低成本的方式在低线城市争夺市场。

对于星巴克来说，其最大的竞争力还是在于大公司系统性的规模优势，譬如在第三空间之外发展的全渠道业务，包括专星送、啡快和电商等等；还有因地制宜的开店策略、多年打磨的流程体系以及供应链基础。以及，其最大隐形资产是品牌本身。这些过往20余年的积累也让星巴克在中国市场下沉时具备优势。

星巴克也展示了其下沉市场的扩张计划。2023年初，星巴克中国表示将延续对中国市场的投入，新进入10个新城市。据悉，这10个城市全是三四五线城市。星巴克中国首席运营官刘文娟在接受媒体采访时也曾透露，星巴克的市场拓展看中的不仅仅是全国300多个地级市场，也包括了近3000个县域市场。

而伴随着下沉市场的争夺战日益白热化，市场也在经历着分化。

譬如，星巴克选择坚守相对高价市场。财报显示，2023财年第三季度（截至7月2日），星巴克中国营收8.219亿美元，同比增长60%（去除汇率变动影响），较上一季度增长10%；同店销售额增长46%，同店交易量增长48%，平均客单价下降1%，相较于第二季度有所提高。报告期内星巴克中国门店净新增门店237家，超过前两个季度的总和。截至第三季度末，星巴克中国在250个城市运营6480家门店。

具体来看，星巴克旗下门店占领了大部分商圈中心位，装修好环境舒适，通过打造介于办公场所和住所之间的工作、休憩的“第三空间”的差异化概念，与自身的品牌文化和定位深度绑定。由此，高昂房租下，打价格战很难。

星巴克显然也不想放弃这种定位。“我们专注于提供高端的咖啡体验，这是其他品牌无法复制的。我们覆盖了线上和线下空间、快速和慢享体验，能够服务顾客多样化的消费场景和需求。”星巴克中国董事长兼首席执行官王静瑛在财报电话会上称。据此前规划，至2025年，星巴克中国总门店数量将达到9000家。

咖啡鏖战仍将持续。

Executive Editor: Sonia YU

Editor: LI Yanxia, HE Jia

Host: Stephanie LI

Writer: Stephanie LI, HUANG Qingyi 

Sound Editor: HUANG Qingyi

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

Presented by SFC

编委:  于晓娜

策划、编辑：李艳霞、和佳

播音：李莹亮

撰稿：李莹亮，实习生黄青衣

音频制作：黄青衣

设计：郑文静、廖苑妮

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