Source: Restaurant boss internal reference
In recent years, the rapid expansion of the freshly ground coffee market has given rise to a cross-border wave, with brands in various fields stepping in, and seeing coffee business as an important way to explore new opportunities.
It's not just a superficial collaboration, it's a long-term business investment. From time-honored Chinese medicine brands to snack stores, from sports shoes and clothing to new energy vehicle manufacturers, all walks of life and enterprises have entered the coffee market to explore new business growth points.
At present, the competition in the coffee market is becoming increasingly fierce, and the 9.9 price war continues to burn, how are these cross-border brands performing in this fierce environment?
01.
"As soon as it spreads, there are tens of thousands"
In the field of cross-border coffee, many businesses have a large network of physical stores. Two "China" prefixes - China Post has more than 50,000 outlets, and Sinopec Yijie has opened 30,000 convenience stores.
From the moment they entered the game, the imagination space has been unfolded - by using the existing outlets to open coffee shops, they can achieve rapid large-scale expansion with low store rent and low cost, forming a pattern of "X million thousands of shops as soon as they are opened". This model, if it fails, will not cause significant losses, and if successful, it can be an investment with a very high rate of return.
Post Office Coffee began on February 14, 2022, and the first post store with independent operation and in-depth construction was unveiled. The biggest feature of the post office café is that it superimposes postal cultural and creative services, such as retro green scenery, iconic mailboxes and stamps, etc.
Backed by the big tree of China Post, the subsequent development of post office coffee did not rely on postal outlets. Most of the site selection ideas are in business districts and scenic spots, which are more like a cultural and creative store than a coffee shop, and are also complained by consumers because of their single products and high prices.
In June 2023, Post Office Coffee began to rely on partners to expand, and the threshold for joining was only 80,000. But so far, there are less than 100 post office coffee stores in operation. It can be seen that it is far from enough to rely on the aura and emotional support of the postal service.
Sinopec Yijie sells coffee, with the help of the scene of "gas station + coffee". The original plan was to open 3,000 stores in three years. Aiming at the driver's refreshment needs, in the most ideal state, it can be an alternative to Red Bull. Shell Oil also sells coffee, and Shell has said that it is more profitable to sell coffee than to sell oil.
In the beginning, Yijie Coffee cooperated with Lian Coffee. Prior to that, easyJet had also worked with Luckin in a shop-in-shop. At present, the biggest progress is Tims Coffee, which reached a strategic cooperation in 2022.
But even with the use of Sinopec easyJet's outlets, easyJet Coffee's expansion rate is not fast. On December 29, 2023, after one year of cooperation, easyJet Coffee xTims Coffee opened 100 stores.
In addition to third-party cooperation, easyJet has not given up its "self-employed" efforts. In January this year, easyJet signed a strategic cooperation agreement with the Ethiopian Embassy in China to increase the coffee supply chain and continue to further deploy easyJet Coffee MINI stores.
02.
Enhance the shopping experience and build your brand
Coffee culture is not just a beverage choice, it is also becoming an important tool to enhance the shopping experience and brand building. Li Ning's Ning Coffee and NIO's NIO CAFE are two typical examples, which hope to enhance brand appeal and consumer loyalty by integrating coffee culture.
The advantage of these two brands for coffee is that the location logic of the existing store/experience center is similar to that of the coffee shop. The users of the brand itself are also relatively young, and there is a lot of overlap with the coffee consumer group, which is convenient for cold start.
Carrying the banner of the national tide, Li Ning sells "Ning Coffee" in the store, and consumers in some stores can receive Li Ning Coffee after any consumption. Li Ning Company has said that it hopes to improve the comfort and experience of customers when shopping by optimizing in-store services.
However, Ning Coffee currently only has six stores in five cities, all of which are in flagship stores, and its impact on enhancing the overall brand shopping experience appears to be limited.
Judging from the WeChat index, the popularity of Ning Coffee has dropped significantly, with the WeChat index of Li Ning Coffee being 112 and Li Ning's WeChat index being 8.51 million, a huge difference.
NIO also sells NIO CAFE in its own "NIO Center". NIO Center is positioned as a lifestyle community for NIO users, trying to provide a comfortable shopping experience, enhance brand stickiness, and help enterprises establish a high-end brand image.
NIO's NIO CAFE is bound to NIO Center, which has about 137 stores. Although the location of some of NIO's newly opened future centers is no longer a landmark shopping mall, but a traditional automobile city, coffee service continues to exist as one of its value-added services.
Recently, some NIO centers have also opened coffee delivery services, and the price of coffee and milk tea is about 10 to 20 yuan, which may also be a measure to alleviate business pressure.
03.
Time-honored brands try to attract young people
By integrating modern coffee culture into traditional time-honored enterprises, they try to attract young consumers, which not only retains the traditional charm of the brand, but also shows the innovative spirit of keeping pace with the times. Tong Ren Tang's "Zhima Health", cloth shoe brand Neiliansheng's "Ouchi Kung Pao Coffee" and Bright Food's Shangka Coffee are all representatives of this trend.
Tongrentang's "Zhima Health" once relied on "Chinese herbal coffee" to get out of the circle, and its product lines include wolfberry latte, tangerine peel latte, monk fruit American, cinnamon cappuccino and so on. When Zhima Health had only 2 stores, it announced its plan to open 300 coffee beverage compound stores in Beijing, and the planned revenue of a single store could reach 10 million a year.
However, there is a huge gap between the market acceptance and expectations of Tong Ren Tang Coffee. Today, Zhima Health Coffee & Health BAR has only 6 stores in operation in Beijing, and all of them opened in 2022 or before. The zero store was converted into a Chinese restaurant, and the other stores returned to their "main business" and became a "Chinese medicine hall" and a "aging center".
The store is located on the second floor of the main store in Dashilan, Beijing, allowing customers to have more places to stay and experience, and it is also a shortcoming to make up for the shopping experience. The store's specials include "Sugar Fire" with old Beijing Erba sauce and milk, Beijing cold brew with hawthorn sugar gourd flavor, and osmanthus qin from old Beijing sour plum soup.
Ouchi Kung Pao Coffee is not for profit, but only for drainage, and it is still in operation, not expanding, and is still a carrier of continuous dialogue with the new generation of consumers. But it's hard to quantify how much value it can bring to a brand.
Bright Food has opened a specialty coffee and coffee coffee. The brand can be traced back to the establishment of Desheng Coffee Store in 1935, renamed Shanghai in 1958, and occupied half of the Chinese coffee market for the next 20 years.
Shangka Coffee integrates art exhibitions, product displays, and specialty coffee, and combines product elements such as malt milk essence, Le Koufu, and Bright Ice Bricks to play new tricks.
Up to now, Shangka Coffee has opened 8 stores in Shanghai, which is relatively successful. Its greater imagination lies in reviving the glory of Shanghai brand coffee and reopening the sales space of the retail side.
04.
Coffee journeys for other crossover players
Under the pressure of double reduction, Ape Counseling incubated the coffee brand Grid, which focuses on single-origin coffee, with an eye-catching green bottle and grid as a symbol, positioning it as a fast blue bottle coffee.
Grid did not quickly open the market with low-priced coffee, but set the price band at around 25-35 yuan to avoid the impact of the price war. The target users are locked in relatively mature coffee users, and they are simultaneously expanded with quick pickup stores, shopping mall experience stores, and Pro stores.
In less than two years, Grid has 39 stores across the country, and Gucci has also chosen Grid for its first in-person event in China in 2024, demonstrating the brand's value and market recognition.
In 2021, Laiyifen, a snack wholesaler, launched a freshly ground coffee business, and upgraded its coffee brand to Laicai last year, focusing on freshly ground coffee. Getting involved in the coffee track is because it believes that the market opportunity is greater, and at the same time, the introduction of coffee can also optimize the store model, which is conducive to the franchise expansion of the brand.
As of November 2023, Laijia has landed more than 500 Laiyifen stores, all of which are sold in the form of shop-in-shops and takeaways, which is slower than the plan of "laying 800-1000 homes by the end of the year". The brand also plans to launch independent stores in the next two years.
Brands that have previously reported cross-border news, such as Xtep's Special Coffee, only have the actions of some stores, and the volume is not large, and Brain Platinum Coffee is actually just a one-month pop-up store. Huawei's trademark for "a cup of coffee absorbs the energy of the universe" was rejected, and Huawei did not make coffee.
Write at the end
Although they are all cross-border coffees, the purpose is not the same, and the results are naturally different. Many brands simply use coffee as a marketing tool to amplify their brand voice by taking advantage of the lifestyle it represents.
It has also been proven that even if the coffee product is highly reproducible, the store network does not represent everything. After the initial craze subsides, only brands that are truly integrated into the coffee culture, meet consumer needs, and continue to innovate will be able to firmly establish themselves in the market and thrive.
The key to cross-border success lies in a deep understanding and accurate grasp of the core elements of the new field, including supply chain management, product development and marketing. Only when the brand continues to learn and improve and make up for its shortcomings can it ensure long-term success and development.