"Internet + delivery" Mode: the New Retail era of Coffee Industry

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After entering the new retail era, creating a cross-border integration, online and offline, multi-platform shopping experience has become the main theme of this year's "Double Eleven". According to the data, Tmall "Double Eleven" has 1 million local merchants for food, fruit, flowers and entertainment, as well as 3 million takeout riders participating, among which 100,000 coffee orders are sold all day, fully showing the full swing of Internet coffee. Nowadays, with the continuous influx of emerging Internet coffee companies and the successive "pursuit" of capital predators, the pattern of China's 100 billion coffee market is undergoing profound changes. The personage inside course of study points out, our country coffee market development space is huge, coffee industry reorganization, innovation, will further promote coffee industry in China rapid development.

New Retail Drives Coffee Consumption Upgrade

In recent years, domestic emerging coffee chain brands have broken the boundaries of coffee consumption by combining online and offline, which has extended the service area of coffee shops. With the extension of service, the coffee delivery business model of domestic emerging coffee brands has been recognized by consumers, and the coffee consumption market in China may usher in turning point and explosion point with the help of new retail mode.

Take luckin coffee, a new domestic coffee brand, for example, with a delivery range of 2 kilometers and a promise to deliver within 30 minutes, enabling consumers to enjoy freshly brewed coffee in more scenes such as the office. According to the data, Ruixing Coffee sold 18.2 million cups of drinks during the "Double Eleven" event, setting a sales record in the coffee industry at home and abroad.

Guo Jinyi, co-founder and senior vice president of Ruixing Coffee, said: "Selling 18.2 million cups in 7 days, equivalent to selling 30 cups per second, we have set a new record." Coffee as a healthy drink in the domestic market has huge potential, when the coffee price is expensive and inconvenient to buy two major industry problems solved, the user's willingness to spend will burst out."

Traditional models embrace emerging formats

In the face of capital-assisted,"Internet + delivery" model represented by Ruixing, even coffee and other emerging coffee enterprises "pursuit", the traditional coffee industry has also made changes.

On August 2, Starbucks China, the leader of traditional cafes, and Alibaba held a strategic cooperation conference in Shanghai, officially announcing the beginning of a series of cooperation between the two sides, including instant service, smart store system and membership system.

The two parties will jointly build Starbucks new retail smart stores with industry breakthrough significance, horizontally open up multiple digital consumer operation platforms of Starbucks and Ali ecosystem based on Tmall's new retail scheme, realize the interconnection of member registration, equity exchange and service scenarios under global consumption scenarios, break through the time and space limitation of retail consumption life, and provide one-store and personalized upgrading experience for Chinese consumers.

Among them, hungry is responsible for the most important store delivery service. Since mid-September this year, Starbucks has put this function into trial operation in 150 stores located in key business districts in Beijing and Shanghai, and plans to cover more than 2000 stores in 30 cities in China by the end of this year.

Box Ma Xiansheng stores will invite Starbucks to enter in the form of "brand delivery kitchen" and provide dedicated delivery channels within 30 minutes to ensure the freshness of products. This will be the first time Starbucks has produced and manufactured products outside of stores.

It is worth noting that the rapid expansion path of the coffee consumption market has also failed to get out of the development model of "BAT Friends Circle". Just one month after Starbucks and Alibaba strategic cooperation, on September 6, Ruixing Coffee signed a strategic cooperation agreement with Tencent, and reached cooperation in online traffic enabling, smart stores and other aspects.

The two sides will jointly explore the application of image recognition, Face Recognition Payment and robot delivery in smart stores. Through cooperation with Tencent, Ruixing Coffee upgrades the existing intelligent operation system to realize intelligent order dispatching, intelligent ordering, intelligent quality control and intelligent marketing.

"The surge of domestic Internet coffee brands has made the international brands that have long been ranked first in China respond in a hurry. The restructuring and innovation of the coffee industry, coupled with distinctive brand IP and business model, will further promote the rapid development of the coffee industry in China." Fu Jingya, executive vice president and secretary-general of Coffee Bean Branch of China Fruit Circulation Association, pointed out that domestic brands are insufficient in coffee culture and enterprise culture, so efforts should be made in brand management, and more efforts should be made to internationalize Chinese coffee brands.

Capital rushed into the 100 billion market

The rapid development of China's coffee industry has attracted global attention. Recently, the European China Coffee Market Conference was held for the first time in Hamburg, Germany. Tao Bailiang, economic and commercial consul of the Chinese Consulate General in Hamburg, pointed out in his speech that China has become Germany's tenth largest source of coffee beans imports and its development momentum is improving. Under the good framework of mutually beneficial economic and trade cooperation between China and Germany, and against the background of China's continuous expansion of market opening and relaxation of market access, China and Germany have great potential for cooperation in the whole coffee industry chain.

According to the data of 2018 coffee industry research report, at present, the global coffee consumption market scale is about RMB 12 trillion yuan, the United States is the largest coffee consumption market in the world, with annual consumption of about RMB 3 trillion yuan, and the coffee consumption market scale of China is about RMB 100 billion yuan. Although the size of China's coffee market is still far from that of European and American countries, from the perspective of growth rate, the compound annual growth rate of China's coffee market in recent ten years is 15%, far exceeding the compound annual growth rate of 2% of the global average coffee consumption.

The huge market development space will inevitably attract capital chase. Take Ruixing Coffee as an example, on January 1 this year, Ruixing Coffee began trial operation; on April 15, Ruixing Coffee obtained tens of millions of yuan of angel round financing from investors such as Pleasure Capital and Liuzhengyao; on July 11, Ruixing Coffee announced the completion of Series A financing of US $200 million from investors such as Pleasure Capital and Junlian Capital, with a post-investment valuation of US $1 billion. This means that Ruixing Coffee has been among the "invisible champions" in just nine months since it was founded in November last year. "In front of good projects, capital is never short of money." Ruixing coffee founder Qian Zhiya once said.

In view of the rapid development of China's coffee consumption market and the continuous entry of capital in recent years, Fu Jingya believes that 2018 is the year when the coffee industry really broke out. The capital spied on this industry for 30 years, and then tried to enter the coffee industry in 2015. Until the Internet + coffee represented by Ruixing Coffee was strongly shortlisted, the coffee industry was no longer calm, and capital poured in one after another.

Fu Jingya said that in 2017, China's coffee consumption was close to 250,000 tons, and the output was only 126,000 tons, with a gap of more than 120,000 tons, reaching nearly 50% of the total consumption. Due to the limited planting conditions of coffee in our country, the output cannot increase greatly, while the consumption demand has maintained a continuous growth for more than ten years, and the shortage of supply is inevitable. From the perspective of development trend, the shortage of supply will continue to increase.

"Self-service coffee machines and new retail models make coffee truly a beverage, and 'coffee serves people'. With the power of capital, coffee begins to be everywhere." Fu Jingya said.