luckin coffee is pretty good

[murrayjames]

Xiamen-headquartered luckin coffee (瑞幸咖啡) is not bad! Their iced Americano tastes as good as Starbucks’s, and it’s less expensive (21 RMB vs. 28 RMB). Currently, luckin stores are more common in white-collar working areas than in shopping malls; most of their business comes from pick-up and delivery orders placed through their mobile app and not all of their stores have chairs to sit.

 

I like their monochromatic logo. The white upper-half of a buck mostly circumscribed in a blue circle, with colors inverted where the antlers protrude beyond it. The font’s not bad either. Creative branding.

 

[abcdefg]

I read an article about how fast they are growing. Don't believe I've seen any in Kunming, at least not in the sections of the city I normally frequent. 

[mackie1402]

For all of last year they had half price food and cakes. You could order a muffin for 7rmb and a wrap for a similar price. It was great! Even now they have a lot of vouchers and offers where you can get big discounts. The drinks are identical to Starbucks in my opinion. I'm just not a fan of their stores. Every time I've been to one the staff have had terrible attitude. 

[DavyJonesLocker]

Agree, their coffee is good. They are everywhere in Beijing but most places appear to have little or no seating so more suited for the “on the go crowd” or office staff popping out for a quick coffee

 

The Starbucks reserve counter seems to be a a bit of disaster  for them. Don't think I've even seen one customer use them in the places I go to. 

Mind you not sure what they were thinking charging up to 70kuai for a coffee!

 

[StChris]

This thread is good timing, as I read a good article about the company yesterday in 《财经》 and will write an essay about it tonight for my Chinese class. The article mostly focuses on how they are using AI and big data to develop their business (sounds as much l%ike an IT company as a coffee shop chain). Some interesting titbits from the article:

 

- they are currently burning through their investors' money. Apparently each cup of coffee costs an average of 18.7 RMB to make, but the average selling price of one cup is just 9.2. In comparison, the figures for Starbucks are 13.3 and 30.8 respectively. I'm not sure how Starbucks manage to get the cost of theirs down to 13.3 rather than the 18.7 a Luckin coffee. The plan is obviously to steal market share away from Starbucks, and then rise prices (and probably lower costs too)

 

- they plan to have opened over 4500 coffee shops by the end of 2019 (Starbucks will only have 3789). That's pretty amazing when you consider how long Starbucks have been in the market compared to them. The use of AI and big data (to decide what and when to restock, contact suppliers, deciding which worker should work at which store and when etc) means that they don't really need to take the time to train and hire experienced store managers. This, along with the investor money, probably explains how they can expand so quickly. 

 

- they have a special method for deciding where to locate their shops. They first open a take-away only service that takes orders through the app (no actual shops), and then use the data from all those orders to determine the most suitable locations for actual walk-in shops.

 

- they pay their workers a higher hourly salary than Starbucks (32 RMB v 23 RMB). Although this sounds good at first, they use their data and AI to analyse and predict peak demand periods, and only hire workers for that amount of time, they don;'t pay them for the whole day.

 

- the price of a coffee varies from customer to customer depending on their purchasing habits (again, decided by the AI). The more frequently you buy, the higher the price (kind of the opposite to those cards some coffee shops give you, where you get a free coffee every  cups or so)

 

- they use their own ordering system, rather than going through 美团. Over 90% of online companies tend to rely on existing platforms rather than branch out on their own. The article doesn't seem to elaborate on the benefits of going alone, but would guess you benefit from keeping the data all for yourself, as well as not giving a cut of sales to another company. 

 

- they didn't mention robotic baristas, so I guess it's still people making the coffee. 

 

I've probably missed a few details, but it was an interesting article on an interesting business model. Only time will tell whether it crashes and burns or whether it manages to displace Starbucks.

[StChris]

1 hour ago, DavyJonesLocker said:

The Starbucks reserve counter seems to be a a bit of disaster  for them. Don't think I've even seen one customer use them in the places I go to. 

Mind you not sure what they were thinking charging up to 70kuai for a coffee!

 

Seems pretty quiet where I am too. I was lucky enough to live near a coffee shop in Taipei were they sold those kind of fancy, single source coffees, only it was much cheaper (maybe 20 a cup). After trying a few and finding them a little sour, I had to admit to being the philistine that I am and just stick to my usual latte/cappuccino.

[murrayjames]

Thank you for your post, @StChris. Very informative! To clarify: when I say luckin coffee is “pretty good” I have in mind the coffee quality and logo aesthetics. I am less enthusiastic about their using AI to hasten the arrival of the Foucauldian panopticon.

 

The best cup of coffee I ever had was in Edmonton, Alberta. The beans were imported from Yemen and Ethiopia, then roasted by local hipsters. The coffee was brewed using a pour-over method and served black. It was dark, slightly bitter, and cost me $5 CAD. Hard to imagine a 70 RMB cup of coffee from Starbucks tasting better than that.

[mungouk]

Good thread!

All the Luckins I've seen here in Beijing seem to be in the first floor (ground level) of office blocks or shopping malls.  Presumably a strategy. 

They don't seem very welcoming though. I would easily trade off atmosphere and ambience against price. 

 

Plus if the coffeee is only at Starbucks quality I'll probably head elsewhere anyway.

 

 

[Publius]

6 hours ago, StChris said:

The more frequently you buy, the higher the price

It's called 大数据杀熟. Everybody's doing it, from Jingdong to Meituan, from DiDi to Ctrip. For example, Meituan's delivery fee fluctuates quite wildly. Sometimes it can be explained by bad weather or holiday or whatnot, but it could be simply because you order the same food too regularly. Black Mirror-esque, isn't it?

[Teasenz]

Definitely burning through a lot of money as usual with Chinese startups. But it's good to finally see a startup that gets it right when it comes to branding. 

@StChris I remember an interview on TV with the CFO of luckin and he stated that an average cup is about 11 RMB in cost. I think that sounds more right, 18 RMB is a lot, especially given that coffee prices are currently at record lows, and Starbucks has way more premium locations.

[TheBigZaboon]

There're no shops in Japan yet, in spite of the success of a couple of Taiwanese bubble tea chains.

 

But I can't see Japanese giving up their preference for Starbucks or Seattle's Best-style coffees, like lattes and cappuccinos, for a Foucauldian panopticon. It's hard enough to explain a long white or short black, and then try to get them to change their habits accordingly. 

 

Kek, kek, kek...

 

TBZ

[ChTTay]

Yeah I’m a fan of Luckin as well. I like that the APP actually has options to customise their coffee a bit. I like Americano’s with a little bit of milk. I often don’t want a creamy drink but I also like to take the edge of a straight black coffee. The app lets you pick one serving 单份 or or double serving 双份 of milk to add (or no milk of course). They also let you adjust sweetness if you want sugar. I’d say their iced coffee is better than Starbucks. I also like their iced frappe style drinks. They’ve got a mango one, matcha, chocolate and coffee. Good for a after a hot days work. 

 

One BIG downside of luckin’s model is that they don’t have any way for customers to use their own cups. I feel like if it’s a pick up from the store order there should be a “use my own cup” option in the app. Big waste of plastic as it is. I’d also like to see them provide another option instead of big paper bags for single cup orders. I see people do this for one cup of coffee because they don’t have a hand free or they just don’t want to carry it. It would be a lot easier to use on of the cup carry sleeves you see in taiwan both in disposable and cloth formats.  

 

Starbucks give you a discount for using your own cup. A lot of people where I work bring their own cups too. 

[Bibu]

15 hours ago, abcdefg said:

Don't believe I've seen any in Kunming,

not white collar, neither netbug, 鉴定完毕. LOL

[mackie1402]

13 hours ago, StChris said:

they use their own ordering system, rather than going through 美团

 

I remember when I tried to order in-store, they said I had to scan the QR code to log into my account to order. It really is a cashier-less coffee shop. If I had walked in and was told to order the coffee through  美团 I guess I would've felt cheated, like "Why did I even come here then? I could have gotten it delivered." But as I used their own app to order, it felt quite natural. Strange really! 

 

I just downloaded the Luckin Coffee app again and ordered some lunch and a coffee. They've really added to the menu recently and it definitely seems like it's aimed towards  office workers. There are now tonnes of snacks available such as nuts, coconut sticks and even Kit Kats! 

 

I was reading about Luckin online a while back and found a couple of lines quite interesting. It was from investorplace.com

 

Here are a couple of quotes:

 

Quote

Luckin is not about relaxing, holding meetings or spending quality time on comfy couches. Most of the 2,380 stores it had at the time of its public filing are kiosks, and most of its coffee drinks are delivered

 

Quote

Luckin sells coffee as a drug, not a lifestyle.

 

Quote

Starbucks is selling relaxation.

 

Update:

 

So I just got my Luckin Coffee delivered and they forgot to send my salad. They don't have any way to contact the shop where I ordered the coffee/food, instead you have to start a 'chat' on their app and wait for someone to be free. After waiting about 5-6 minutes someone finally replied and said they would look into it. They got back to me and said they contacted the shop and are really sorry, and they'll send a new one now. It all seems like a bit of extra work just to find out where my salad is. It feels like when you get a wrong delivery from Taobao and they're trying to figure out what happened.

Edited June 28, 2019 at 03:38 AM by mackie1402
Update

[laomao]

3 hours ago, ChTTay said:

One BIG downside of luckin’s model is that they don’t have any way for customers to use their own cups. I feel like if it’s a pick up from the store order there should be a “use my own cup” option in the app. Big waste of plastic as it is. I’d also like to see them provide another option instead of big paper bags for single cup orders. I see people do this for one cup of coffee because they don’t have a hand free or they just don’t want to carry it. It would be a lot easier to use on of the cup carry sleeves you see in taiwan both in disposable and cloth formats.  

Not having an option to use your own cup is a particularly big problem (in my mind, anyway) in Shanghai, as the new recycling/waste sorting rules come into play next week. I am keen to produce as little rubbish as possible simply to avoid accidentally getting fined for putting things in the wrong bin (and also because the amount of rubbish I see (and I know I produce, even trying not to) on a daily basis is horrifying). 

[ChTTay]

Yeah, their business model purposely target office workers and made delivery the main focus. They’re not about sitting in and relaxing for 2 hours over coffee. As above, they’re pretty open about it. China has a lot of office workers though so it makes sense. China also loves delivery so that makes sense too haha

 

Apparently Starbucks started offering delivery in an effort to claw back some business from Luckin’ and try compete with them. 

 

I moved house recently. My old house was 1.2km (or something!) from a Luckin and I could get delivery and my new house is about 1.8km and I can’t get delivery. They just have a default app message saying they’re opening a new store soon to cater to my area. I very much doubt that as the closest thing of any note to my new place is exactly where that Luckin’ is ?

 

[murrayjames]

I almost always pay for luckin coffee with cash. The employees will take your bills and coins if you have exact change. 

[DavyJonesLocker]

1 hour ago, laomao said:

Not having an option to use your own cup is a particularly big problem (in my mind, anyway) in Shanghai, as the new recycling/waste sorting rules come into play next week. I am keen to produce as little rubbish as possible simply to avoid accidentally getting fined for putting things in the wrong bin (and also because the amount of rubbish I see (and I know I produce, even trying not to) on a daily basis is horrifying). 

 

Me too, I put things in recycle bins but it's pointless the they are all full if all sorts or rubbish. I'll bet they don't go to and recycling plant. Just dumped.

 

I really dislike the lack of effort in China on recycling and reusable products  . I try bring my own bags to the supermarket but I think I am the only only doing it. 

 

[imron]

15 hours ago, StChris said:

means that they don't really need to take the time to train and hire experienced store managers

I'm sure this will work out well for them.

 

15 hours ago, StChris said:

This, along with the investor money, probably explains how they can expand so quickly. 

I'm guessing it's mostly investor money.  Investors should be more careful not to piss their money down the drain.

[laomao]

49 minutes ago, imron said:

I'm guessing it's mostly investor money.  Investors should be more careful not to piss their money down the drain.

It's almost entirely investor money and it's being burnt through in an impressive/horrifying way. In my opinion, they're playing a dangerous game trying to operate a coffee company as a tech company, especially if you consider the lack of profitability in so many of these companies (Meituan as an example, or even Didi) and part of me wonders if their entire game plan rests on Starbucks being forced out....