China’s Favorite Coffee Chain That You’ve Probably Never Heard Of
Forget the green mermaid, when it comes to China’s coffee scene, everyone is watching the blue deer emblazoned on the cups of a chain called Luckin. While Starbucks has rarely paused its dramatic and unceasing march around the world and is currently the largest coffee chain in China (where it’s been for 20 years and continues to grow), it may be about to lose that title to the country’s homegrown upstart. Luckin is the second-largest coffee chain in China, is only two years old, and is poised to yoink the title of the biggest coffee chain in the world’s largest country, reports Business Times.
Luckin’s secret doesn’t rely on making better tasting coffee, nor on the cache that Starbucks holds outside of the United States: instead, it uses technology and data to find the best places, sizes, and drinks for their customers. For example, while Starbucks has always banked on creating a “third place” for customers, almost all of the Luckin stores are tiny “pick-up stores” without much seating, and placed in super-high-traffic office buildings or college campuses. The remaining ten percent are “relax stores” and delivery kitchens, but the bulk of the business is the small, efficient, almost booth-like stores.
In China, Starbucks and Luckin face battle both with each other, and with trying to make inroads in a country that has long been more focused on tea than coffee. Luckin’s business model focuses less on the loyalty and perceived status than Starbucks has, and instead on marketing hard on price, convenience, and service.
Currently, Luckin has 2,370 stores in China and plans to more than double that by the end of the year, which seems ambitious, but on the other hand, their shares more than doubled their value since last year, so it seems that they just might be poised to do it.
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