Convenience Is The Key To Luckin Coffee's Success
Coming a long way in a short period, Luckin coffee has grown considerably since it was first launched by Chinese entrepreneur, Jenny Qian Zhiya, in October 2017. So, what’s her secret?
Jenny has taken a different approach to many other big coffee brands such as Starbucks and Costa. Instead of investing her time creating nice, spacious areas where lovers of the drink can linger and sip away in a relaxed manner, the focus has been on effective and proficient ‘delivery kitchens’. Not only is this ensuring that coffee can be provided to people on the go in a timely and efficient manner, it also massively saves on costs, as she is paying less in rent.
In turn, this then means she can offer nice incentives to her customers such as ‘a free cup of coffee for every two they buy’. Her pricing strategy is also slightly lower than other big brands, but she stresses the fact that “Chinese consumers really demand convenience in addition to quality and price”.
Luckin coffee has recently been valued at $2.2 billion and is apparently getting ready for an IPO in the US, at some point this year. Although the company forecast a loss of 800 million Yuan for 2018, they hope to break even soon. The executives at Luckin are sure it is a winning strategy. Many people in China are put off by the long cues that stand before them when all they want is a quick coffee fix. If Luckin continues to reduce operative costs and focus on convenience, everyone has faith that the company is sure to secure profitability soon!
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