Total No. 3919
Author | Restaurant boss internal reference internal ginseng Jun
Luckin ushered in the "20,000 store era":
Occupy the commanding heights of the industry
On the busy streets of Zhongguancun, a touch of cool "Luckin Blue" was born. Inside the store, blue electronic screens are arranged in a digital matrix, using this as a screen, and a futuristic atmosphere that transcends the times gushes out.
This Zhongguancun flagship store, the 20,000th store of Luckin, opened recently. Since then, Luckin has become one of the members of the "20,000 Restaurant Club" of China's restaurant chain.
◎Luckin Zhongguancun flagship store
At this moment, it is only 13 months since Luckin broke through the scale of 10,000 stores. Nearly 10,000 stores are opened in a year, and they are all "explosive" in the world.
In the domestic coffee market, Luckin's store scale is "faulty" leading. According to the 2023 financial report data, Luckin's store size and sales have surpassed Starbucks, the largest coffee chain brand in the Chinese market in the past, and stand at the top of the domestic coffee chain industry.
Luckin's brand influence has also begun to transcend national borders. Brand Finance (United Kingdom Brand Finance Consulting), a leading brand valuation consulting firm, released the 2024 Top 25 F&B Brand Value List, and Luckin Coffee became the fastest growing brand in 2024 with a 96% increase in brand value.
The development of Luckin is accompanied by the growth rate of the Chinese coffee market. From the soaring scale of stores to the huge coffee consumer base, the speed of Luckin is, to some extent, the speed of Chinese coffee.
According to public data, there are currently about 193,000 coffee stores in operation in China. This year, China has overtaken United States as the country with the largest number of coffee outlets in the world.
Judging from the market size and store expansion speed, the coffee war has entered the second half, and it has also reached a critical stage of competing for internal strength. The scale of 20,000 stores allows Luckin to take the lead in occupying most of the high-quality points. This also gives Luckin a stronger initiative in the second half of the coffee competition.
Behind the Crazy Supply Chain:
Professionalism is the confidence of "opening 10,000 stores in 1 year".
Behind the store data, the supply chain is the engine that drives brand expansion.
Only by establishing a sound supply chain system can brands achieve a competitive advantage in total cost leadership. According to the research of CITIC Securities, the model of direct purchase of cooked beans will generate an additional 20%-30% premium in the intermediate link, and if the green bean and roasting links can be integrated and the intermediate channels can be reduced, the cost advantage will be more obvious after the scale increases.
In the baking process, Luckin has a strong voice. In Pingnan, Fujian Province and Kunshan, Jiangsu Province, Luckin has invested in two automated and intelligent baking bases. In addition, Luckin's fresh fruit processing plant in Baoshan, Yunnan Province has also been put into use.
Located in Kunshan, Jiangsu Province, Luckin Coffee Roasting Base, as the "largest single coffee roasting base with the largest production capacity" in the domestic coffee industry, is also considered to be one of the "most intelligent" coffee roasting plants in China, with an annual production capacity of 30,000 tons, accounting for nearly 20% of the national coffee roasting capacity, which is enough to get a glimpse of Luckin's determination to reposition the coffee supply chain.
◎Jiangsu Kunshan Luckin Coffee Roasting Base
Further upstream, Luckin goes deep into the "last meter" of origin to control quality from the source.
Luckin Green Beans purchases from Colombia, Ethiopia, Guatemala, Yunnan and other global high-quality producing areas, and has become the largest importer of coffee beans in China.
It is worth noting that Luckin recently signed a large purchase order of 120,000 tons with Brazil, becoming Brazil's largest coffee bean purchasing partner in China. Not long ago, Brazil Vice President Gerardo · Alckmin visited Luckin Beijing store and tasted Luckin Coffee, fully affirming Luckin's contribution to promoting China-Brazil coffee trade and the development of the coffee industry. The Ambassador of Brazil to China also visited the headquarters of Luckin Coffee and attended the opening ceremony of Luckin's 20,000th store.
◎Left: Brazil Vice President Gerardo · Alkemin Right: Guo Jinyi, Chairman and CEO of Luckin Coffee
Luckin's deep integration of the supply chain also includes the selection of suppliers on a global scale, and the establishment of "close and stable" cooperative relationships with many top companies, providing them with a stable supply of key elements such as milk, coconut milk, coffee beans and machinery and equipment.
Its supply chain cooperation map not only covers well-known enterprises such as Coca-Cola, Nestle, COFCO, Xiamen C&D, OATLY, etc., but also many of the world's top suppliers in the coffee industry, such as the world's second largest coffee trader Switzerland's ECOM Group, Asia's largest green coffee trader Mitsui & Co., and the world's oldest fully automatic coffee machine manufacturer Shaerer in Switzerland.
Luckin's in-depth integration of the vertical supply chain means that a full-link quality control system has been formed from production, to processing, to R&D and a series of links, and the advantage of "total cost leadership" has become more and more prominent. This enables it to provide 20,000 stores with excellent quality and price products in the era of "quality-price ratio".
Three key barriers
Open up the imagination of a "world-class coffee brand".
"Luckin speed" has become a phenomenal topic in the entire catering market, and the imagination of this 20,000-store brand is still expanding. On the "foundation" of the supply chain, Luckin has created brand barriers, digital barriers, and operational barriers. This is not only a barrier to brand expansion, but also the cornerstone of Luckin's future development space.
In terms of brand barriers, Luckin's brand power can be viewed from two dimensions, internally it is the innovative model of "integration of quality and transportation", and externally it is the construction of consumers' minds.
On the one hand, since 2020, Luckin has connected marketing and user operation, forming a development model of "integration of quality and transportation", that is, integrating brand marketing and user operation. User operation provides a stable and powerful traffic base and traffic reach for brands, and brands provide rich content for user operations, providing continuous stimulation of traffic support and a ladder for popular models to bring traffic.
On the other hand, Luckin continues to establish a close connection with consumers, and with the brand proposition of "professional, young, fashionable and healthy", it has become a lifestyle for many young people.
The brand has always maintained communication and resonance with the post-90s and post-00s. According to statistics, in 2023, Luckin will cooperate with a total of 32 celebrities, with unique vision, and each of them is extremely suitable for the mental state of young people. Luckin has created a unique star cooperation path and achieved a significant increase in brand influence.
Co-branding is also a frequent co-branding with IP, striving to integrate into the details of young people's lives. For example, the co-branding with IPs such as LABUBU, Rose's Story, Havoc in Heaven, and Line Puppy has set off waves of "check-in" craze on social media.
Always standing with young people allows Luckin to radiate unlimited brand vitality.
The strong digital gene is the "innate advantage" that allows Luckin to lead the entire catering industry.
The digital layout is the gene of Luckin, and it is not a day's work. From 0-1, from 1-100, from 100-thousands of processes, all have data precipitation. Looking at the entire domestic catering enterprises, Luckin can almost be said to be the best brand in digitalization.
Based on the digital system and mature supply chain, Luckin's product innovation capabilities are "far ahead" of other coffee and tea brands.
According to Luckin's official data, in 2022, a total of 108 new products will be launched throughout the year; In 2023, a total of 102 new products were launched throughout the year. On average, 2-3 new products are launched every week. In contrast, the frequency of Luckin's new products is much higher than that of other competitors in the coffee and tea tracks. Based on this, a number of evergreen popular models were born, such as raw coconut latte that sold 700 million cups in 3 years.
Luckin's SKU new product R&D mechanism is built on Luckin's full set of digital data, and the massive data supports the innovation mechanism, which in turn feeds back more comprehensive and detailed data.
Whether it is facing the future market competition of tea and coffee, or going overseas and sinking to further expand the brand, digital genes can give brands the ability to respond quickly.
The precipitation of technology has further promoted the construction of Luckin's operational barriers.
Luckin's technological capabilities cover the entire business chain, covering all business links from data-supported store site selection, algorithm-driven supply chain procurement, user marketing automation, and store equipment IoT management.
Automation has made a "big leap" in Luckin's operational efficiency. Luckin stores use imported automatic coffee equipment to achieve standardized production and ensure the consistent quality of each cup of coffee. At the same time, it also greatly improves the efficiency of making coffee.
From the three major barriers of brand barriers, digital barriers, to operational barriers, a "stable triangle" has been formed, allowing Luckin to maintain stable growth and ensure the consistent quality of 10,000 stores in the current "systematic competition".
The comprehensive competitiveness built based on the increasingly large supply chain "foundation" and the three major barriers has supported Luckin's leading position and will also create more possibilities.
Luckin has started to deploy in the Southeast Asian market in 2023, and at the same time, it is growing rapidly in the sinking market. According to this development potential, more consumers will enjoy cost-effective and high-quality coffee.
Standing at a new starting point of 20,000 stores, Luckin has a grander vision - to build a world-class coffee brand and make Luckin a part of people's daily life.