Since the beginning of this year, with the rapid development of China's coffee industry, a large number of coffee companies have emerged, and Luckin Coffee is undoubtedly one of the most concerned objects.
1. Luckin Coffee's march into Hong Kong?
According to a report by Gelonghui, the social platform Xiaohongshu has gone viral that Luckin Coffee, known as the "Starbucks of China", intends to enter the Hong Kong market and will open branches in Yau Tsim Mong and Central areas, and said that its recruitment poster lists that it will hire a store manager or assistant store manager, etc., with a reported monthly salary of up to HK$30,000 and a barista of up to HK$20,000.
According to the data, Luckin Coffee was founded in 2017 and is one of the largest coffee chain brands in China, headquartered in Xiamen. As of the end of July this year, the number of stores nationwide has exceeded 20,000. The brand has launched a number of popular drinks, including the "Thick Milk Latte" in 2020 and the "Raw Coconut Latte" in 2021, and the "Sauce Latte" in collaboration with Kweichow Moutai last year attracted many people to snap up, selling more than 5.42 million cups on the first day of sale.
According to a previous report by Hunan Daily, Luckin Coffee plans to launch a large-scale overseas plan from the fourth quarter of 2024 to the first quarter of 2025, focusing on Southeast Asia and the United States market. According to the late team of the financial magazine, Luckin Coffee plans to expand overseas, focusing on Southeast Asia and the United States market.
Luckin Coffee has more than 20,000 stores in China, adopting an integrated online and offline operation model. In April 2023, Luckin opened its first overseas store in Singapore, and currently has 38 directly operated stores in Singapore. Unlike at home, Luckin did not adopt a price war strategy in Singapore. Luckin sees Singapore as a testing ground for its overseas presence and business model. According to the late team, in the next 3-5 years, Luckin plans to use Singapore as its Southeast Asian headquarters and gradually expand to the markets of neighboring countries and regions.
Second, what should I look at the layout of Luckin going to sea?
Since its establishment, Luckin Coffee, the "dark horse" of the Chinese coffee market, has set off a "Luckin whirlwind" in the domestic coffee market with its unique business model and aggressive expansion strategy. Now, Luckin Coffee has announced its entry into Hong Kong, how should we analyze it?
First of all, Luckin Coffee's announcement to enter the Hong Kong market seems sudden, but it is actually an inevitable part of Luckin's internationalization strategy. Since the beginning of 2024, Luckin Coffee has begun to actively plan its overseas layout, especially in the in-depth exploration of the Southeast Asian market. With its rapid expansion rate and unique business model, Luckin Coffee has risen rapidly in the domestic market and successfully challenged the market position of traditional coffee giants such as Starbucks. With the gradual saturation of the domestic market and the intensification of competition, Luckin Coffee seeks new growth points and sets its sights on overseas markets with more potential, and Hong Kong, as an important financial center and international city in Asia, has naturally become an important stop in Luckin Coffee's internationalization strategy.
Secondly, the most significant competitive advantage of Luckin Coffee in the domestic market is its ultimate cost performance. Through efficient supply chain management, innovative product development and precise marketing strategies, Luckin has successfully provided competitive prices while ensuring product quality. This advantage is also very attractive on a global scale. As a city with a high level of consumption, Hong Kong consumers are no less cost-effective than other regions. With its extremely cost-effective products, Luckin Coffee is expected to quickly win the favor of consumers in the Hong Kong market, and then achieve a rapid increase in market share.
Third, Luckin's entry into Hong Kong is undoubtedly an important step in its internationalization strategy. As an international financial centre and an important business hub, Hong Kong has a high international reputation and extensive international influence. Opening a store in Hong Kong will allow Luckin to gain more exposure on the international stage and enhance the international image of its brand. This will have a positive effect on Luckin to attract international investors, partners and expand into other overseas markets.
Hong Kong is strategically located as an important bridge between Chinese mainland and the international market. Luckin's layout in Hong Kong can take advantage of Hong Kong's geographical advantages to better connect with the international coffee market and understand the latest trends and standards in the international coffee industry. At the same time, it can also take advantage of Hong Kong's convenient conditions such as trade and logistics to pave the way for its further expansion of international markets such as Southeast Asia, Europe and the United States.
At the same time, the layout of the Hong Kong market is also a good opportunity for Luckin to carry out brand promotion and cultural integration. Luckin can combine China's coffee culture with Hong Kong's local multiculturalism to create a unique coffee consumption experience. For example, we will launch some coffee products that combine Hong Kong specialties or cultural elements, such as Hong Kong-style milk tea and coffee. This cultural fusion will not only attract local consumers in Hong Kong, but also generate strong interest in Luckin Coffee among international tourists visiting Hong Kong, further expanding the international influence of the Luckin brand.
Fourth, in the long run, there are many opportunities for Luckin Coffee's international development. The global coffee market is huge, and the differences in consumer demand and taste for coffee in different regions provide Luckin with rich market segmentation opportunities. However, there are opportunities and risks. Luckin faced challenges in its overseas expansion included cultural differences, brand recognition, supply chain management, and local competition. Especially in the supply chain, how to ensure product quality and cost control will be the key problem that Luckin needs to solve.