Boston Celtics beat the Dallas Mavericks: 107 -89.
What has this to do with Luckin Coffee and Starbucks. Well, Boston Celtics had a big lead (23) at half-time that was cut to 8 pts by Dallas. It looked like momentum has turned, but BC ran out winners.
Luckin Coffee is back and beating Starbucks in China. They are trying to compete with Starbucks on being more targeted to the Chinese palate, and being way cheaper.
"Starbucks has often shrugged off Luckin’s threat. As recently as January of this year, the US company appeared to dismiss Luckin’s low prices as a temporary phenomenon. “You see an influx of mass-market competitors focused on fast store expansion and low-price tactics to drive trial. This will shake out over time,” Belinda Wong, who oversees Starbucks in China, told analysts." And Starbucks is NOT able to come up with a competitive reaction.
"Yet Starbucks has begun to struggle. For the quarter through March, sales in China sank 8% from a year earlier, compared with a 42% surge at Luckin." And they want to compete by being more Chinese in their ordering and payment.
Here's what I think: Chinese Coffee Chains will beat Starbucks, but Starbucks will still be around. In other words, the biggest threat to Luckin is another Chinese coffee chain. First, there will always be a market for Starbucks - it, McD, will still be there. Two, there is always a market for good enough coffee - for a given definition of good enough. In Australia, Starbucks was not good enough. Three, Starbucks has always charged a brand premium for slightly better than good enough coffee. I think that has to change. (also the slightly better than good enough microwaveable food). That is the product.
Starbucks actually has a free product - it was supposed to be your 'third place.' But that was in a pre-smartphone world, today - most of us are in our third place with a smartphone and headphones, and doom scrolling. We need not have physical stores.
So if Starbucks is so bad, why would I back them to beat Luckin? I did not say that - I said that Chinese Coffee will have a turf war. And Starbucks will respond with smaller cups, but not go into the war itself. If I have an option (in SG), I prefer Paris Baguette over SB; but since I drink good enough coffee - I really don't care. (This is a personal choice thing, no one except Nescafe really benefits from my coffee drinking habits) Luckin still does not beat Kopi-O Kosong.
