On September 27, Starbucks announced that it has reached 6,000 stores in mainland China. Shanghai has thus become the first city in the world with more than 1,000 Starbucks stores.
In recent years, due to the blessing of capital, new brands such as Luckin and Manner have emerged in the Chinese coffee market
According to iiMedia Research, the size of China’s freshly ground coffee market in 2021 is about 87.6 billion yuan, a growth rate of 38.9% over the previous year. It is estimated that by 2024, the size of China’s freshly ground coffee market is expected to reach 190 billion yuan. The annual market size of China’s coffee industry will exceed 1 trillion yuan.
Although Starbucks has been running fast in China for 23 years, China’s coffee market is far from saturated.
However, from a financial point of view, the biggest winner this year is Luckin.
On August 8, 2022, Luckin Coffee announced its financial report for the second quarter of 2022. In the second quarter, the total net income of Luckin Coffee reached 3.2987 billion yuan, an increase of 72.4% over the same period last year, and the same-store sales growth rate of its self-operated stores reached 41.2%.
In the second quarter of fiscal 2022, Starbucks’ net income in the Chinese market fell by 14%. In the same-store sales segment, Starbucks also had a bleak performance, with the average customer price falling by 4%, and Starbucks’ same-store sales in the Chinese market falling by 23%.
Luckin, which started with marketing, is slightly lower than Starbucks in price. In the post-pandemic era, Luckin’s price advantage is fully highlighted.
In addition, Luckin itself is good at cross-sector marketing. Just a coconut cloud latte that is popular in the circle of friends has created a sales volume of 400 million yuan for Luckin in a single quarter.