Luckin’s Business Model: A Disruptive Innovation? (part 2)

In China, some market conditions are different. A low number of coffee shops compared to the population, especially in large towns, and the boost in coffee consumption (at two-digits) in particular out of home.

The hot coffee delivery is, therefore, a new opportunity to satisfy the large coffee demand.

At the moment, there is no available data to see if the delivery system will be appreciated by customers, the fact is that the giant coffee chain Starbucks is also moving towards signing a partnership with Alibaba, China’s largest online retailer, to launch delivery services in September. The new deal will see Starbucks integrate a “virtual store” in online shopping and payment apps.
The hot coffee delivery model, launched by the Chinese company Luckin, is fueling the debate among operators: May this new model change coffee habits?

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Luckin and the Hot Coffee Delivery Model (part 1)

As explained by Qian Zhiya, Luckin Coffee founds its business model starting from some weak points of coffee shops in China: high prices and lack of presence. “In western countries, the price of a cup of coffee consists of only 1/1,000 of people’s monthly income. In contrast, it is almost 1/100 for people living in China”. “Also, the number of coffee shops in the mainland is very limited. As opposed to Taiwan, where the population of 23.5 million enjoys over 5,000 CITY CAFE shops (a brand launched by 7-Eleven), there are only 300 Starbucks stores in Beijing, a city populated with 29 million people”. Find out more about Luckin.

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The New Coffee Trends Set to Dominate the Market in 2019

According to the National Coffee Association (NCA), the percentage of Americans drinking coffee every day has risen from 57% to 62% over the past year. Now that is quite an impressive increase! Another factor that has caused this increase was the media attention surrounding a study on coffee consumption published in the journal Annals of Internal Medicine in August 2017. It was the largest ever study based on coffee and mortality which involved more than 520,000 people in 10 European countries. The results were quite dumbfounding, as it concluded that drinking more coffee could significantly improve a person’s life expectancy.
So what has caused this surge to happen?

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Coffee Culture in Arab Countries: From Tradition to Innovation

The Middle East and Gulf region has a market of between 4.5 and 5 million 60-kilogram bags. As the main hub for the region, Dubai has long been the trend setter for the region and at the center of any new development.
The first 3 Arab countries leading the list of coffee consumers (kg per capita) are: Lebanon, Algeria and Qatar, Egypt.

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