#记录我的2024#从去年开始, the fierce price war of coffee companies has sparked heated discussions in the market, but just recently KFC also announced that it has joined the price war of nine yuan and nine, and Luckin has withdrawn from KFC but wants to join, what is going on?
1. KFC Coffee has also joined the price war of nine yuan and nine?
According to a report by Jiemian News, when you click on the KFC ordering applet, you will find that its homepage is prominently marked with the words "Kenyue Coffee 100 Stores Celebrate, 9.9 Every Day".
According to its official mini program, the "9.9 yuan" activity period is from March 39 to April 7, 2024, and consumers can receive a 9.9 yuan coffee coupon every day in the form of dine-in or take-out at designated stores for all coffee products.
From the perspective of China's consumption environment, the return to parity and high cost performance has become the mainstream in the past year. In this competition from all walks of life, the "9.9 yuan" low-price strategy, which was first launched by Cudi and followed by Luckin, has made the coffee industry one of the most "involutional" tracks, and has gradually changed consumers' perception of the price of a cup of coffee.
At present, KCOFFEE (hereinafter referred to as "KCOFFEE") has opened 9.9, although it is a limited-time event, but under the current public perception of "a cup of coffee does not exceed 9.9", it may also indicate that KCOFFEE intends to expand its popularity among consumers through this activity.
KCOFFEE, a coffee brand owned by Yum China, first appeared on the counter of KFC restaurants as a drink around 2014, but at that time, according to Yum China's financial report, it was more like "KFC increased the volume of transactions during breakfast and afternoon tea".
KCOFFEE's further move began around the second half of last year, when a number of renovated KFC restaurants appeared on the streets of some cities, and the biggest difference from the previous ones was the prominent "KCOFFEE" name printed on the doors.
2. What should I think of Luckin's withdrawal from KFC?
In recent years, China's coffee market has experienced rapid growth, and major brands have increased their investment in trying to seize market share. In this fierce competition, KFC Coffee also announced that it would join the price war for nine yuan nine, while Luckin Coffee, which had been known for its low-price strategy, chose to withdraw. This series of actions has aroused widespread attention and discussion in the market. How do we analyze and judge this?
First of all, with the rapid expansion and diversification of China's coffee market, the fierce competition in the coffee market has intensified year by year, not only professional coffee chain brands such as Starbucks and Luckin have wrestled with each other, but traditional catering giants such as KFC have also begun to get deeply involved in the coffee field and launched highly competitive product pricing strategies. KFC Coffee's entry into the price war of nine yuan and nine yuan, although this move seems sudden, is actually an inevitable choice after a keen insight into market trends. In the face of the growing demand for coffee and the pursuit of cost-effectiveness among the younger generation of consumers, KFC's move aims to attract more customers and expand its market share through a people-friendly price strategy, which is also an important attempt to diversify its own business.
Secondly, it is worth noting that Luckin Coffee has chosen to withdraw from the price war of nine yuan nine. Behind this decision, it reflects Luckin's deep understanding of market competition and unique strategy. Since its establishment, Luckin Coffee has been committed to creating high-quality and cost-effective coffee products, which have won the love of many consumers. However, the price war of nine pieces of nine is undoubtedly a huge pressure for Luckin. On the one hand, in order to maintain low prices, Luckin may need to sacrifice some product quality and service experience, and on the other hand, long-term low-price competition will also have a serious impact on the profitability of enterprises. As a result, Luckin opted out of the price war and instead pursued other, more innovative and sustainable competitive strategies.
Third, compared with Luckin, KFC coffee has its unique market advantage in joining the price war. On the one hand, KFC Coffee does not have an independent coffee store, but relies on KFC's existing restaurant network for sales. This model makes the cost of KFC coffee much lower than that of companies with independent stores such as Luckin and Starbucks. On the other hand, KFC, as a world-renowned fast food giant, has very strong bargaining power in its supply chain and is able to better control costs. In addition, KFC coffee can also leverage its strong brand influence and broad consumer base to quickly attract consumers and increase market share through price wars.
Fourth, we should also see that the price war is not a long-term solution. For any business, long-term low-price competition can have a serious impact on its profitability. Moreover, as consumers have higher and higher requirements for coffee quality and service experience, it is difficult to attract and retain consumers simply because of low prices. Therefore, whether it is KFC or other coffee brands, they need to continuously improve product quality and service levels to meet the needs of consumers while maintaining price competitiveness.
In the long run, the democratization of the coffee market has become irreversible. With the gradual acceptance and improvement of domestic consumers' awareness of coffee culture, as well as the increasing improvement of the coffee industry chain, coffee will become more and more popular and close to the people. The market status of a cup of coffee for one or two dollars on the streets of Europe and the United States will also be gradually realized in China. In this context, major coffee brands need to pay more attention to product innovation and differentiation to stand out in the fierce market competition.