The coffee company believes it is capable of beating Starbucks in China

After nearly a year in business, the Luckyin Coffee Challenge challenged Starbucks in one of the largest coffee markets in the United States. More than 1,700 Luckin outlets have spread across China this year. This includes a store in Beijing’s Forbidden City, the historic cultural site Starbucks has known for more than a decade. Luckin plans to get 2000 outlets by the end of the year. It attracts customers at cheap prices and clever use of technology, which forces Starbucks to upgrade its game. The rise of Luckin in the US series challenge shows how Chinese start-ups are increasingly competing with Western brands in one of the world’s largest consumer markets. While both offer coffee, the similarities end up pretty much there. Unlike Starbucks brand stores, most Luckin outlets are small cabins outside of the spots that take orders online for both delivery and delivery. Luckin Coffee stores have spread rapidly in China this year. It plans to open hundreds more. Most importantly, Luckin Technology has developed into its core business from the beginning. Cash outlets are not accepted, and instead customers can only pay through the Luckin application, which offers loyalty rewards. “This is very convenient and time-saving,” said Hans Wang, a 33-year-old researcher in East Hangzhou. Place his application using the application and select it in the store. Customers are demanding these types of services in China that are increasingly interconnected. But until recently, Starbucks did not offer them. “Starbucks was a weak point,” said Jeffrey Towson, a professor at Beijing University and a Chinese business expert. “The fact that they did not have a delivery is ridiculous and sucked the application.” Growing competition China is the second largest Starbucks market after the United States. With about 3,000 stores all over the country, it is still bigger than Luckin. Starbucks plans to double that figure by the end of 2022. But in June, the company announced a sudden slowdown in growth in China. One of the things to blame for is increased competition, which analysts interpreted as a reference to Luckin. Starbucks wants to open a new store 2100 next year. There is a growing sense of competition between Lockin and Starbucks. In May, Lukin filed suit against a Seattle-based company, claiming that it was unfairly monopolizing the market. “We welcome organized competition, mutual promotion, continuous innovation, continuous improvement of quality and service, and creating real value for Chinese consumers,” Starbucks told Chinese state media. Luckin plans to open hundreds of outlets in the next two years. Starbucks is fighting now. In August, Alibaba (BABA), China’s largest e-commerce company, collaborated to launch home delivery services. A month later, Lukin announced his association with another major Chinese Internet company, Tencent (TCEHY). Yuwan Hu, an analyst at Daxue Consulting in Shanghai, said the competition from Luckin is also pushing Starbucks to go to a higher level by focusing more on its own brand in China. Consumer outlets offer more luxury coffee options in a larger, more luxurious retail space. Shanghai’s Starbucks Reserve, which opened in late 2017, is the world’s largest store. The world’s largest Starbucks, a 30,000 square foot store in Shanghai. Hu said Lukin was focusing on price competition. The company discounts discounts on Tencent ‘s famous “WeChat” social network, and its coffee is generally cheaper than Starbucks coffee. Suyo Ming, 25, who works for a technology startup in Beijing, said she was torn between her trademarks. She is attracted to cheaper Luckin’s prices, but she also likes a more recent experience at Starbucks, where she can meet friends. The answer to coffee is described as a coffee industry equivalent to Xiaomi, the smart phone maker in China, which has become one of the country’s best brands by selling cheaper alternatives to Apple iPhone (AAPL). To succeed, Luckin does not necessarily have to overtake Starbucks as a leading brand in China. Analysts say the market is big enough for each. Why Starbucks Needs to Feel at Home For now, Lucien is losing money as he seeks to grow, a common position for emerging startups. “We did not set a profit schedule,” spokesman Du Yang told CNN. In December, the company raised $ 200 million in new financing from investors, giving it over $ 2 billion, Du said. The long-term challenge for both Luckin and Starbucks works to turn more people who traditionally drink tea into coffee. People in China consume five cups of coffee a year on average. The Americans complain about 400. “The question for them now is, ‘How Chinese like coffee?’ , Towson said.


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