Luckin Coffee entered the Greater Middle East and India market, challenging Starbucks, the strongest rival.

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Luckin Coffee, who wants to beat Starbucks in China, is planning to enter other big overseas markets.

Luckin Coffee forms an alliance with Americana to develop coffee retail business in the Middle East and India

Luckin Coffee announced on July 22nd that it would form an alliance with Kuwait-based company The Americana Group to set up a coffee retail business in the Middle East and India. Founded in Kuwait in 1964, the Americana Group includes food manufacturing, distribution and restaurant operations. It operates 1900 franchise stores including KFC,Red Lobster,Olive Garden,Krispy Kreme and even Starbucks'UK rival Costa Coffee in 13 countries, including the United Arab Emirates, Saudi Arabia, Kuwait and Egypt, and has 25 food production bases serving more than 20 countries in the Middle East and North Asia.

Luckin Coffee said Luckin Coffee and Americana signed a memorandum in Beijing on Monday that the two companies would jointly operate a new coffee business. The Greater Middle East and India have a wide range of markets and development prospects. Through cooperation, Luckin Coffee will go global with technology and business model.

Qian Zhiya, chief executive of Luckin Coffee, said in a statement: "the cooperation with Americana represents Luckin Coffee's first step in bringing its leading products from China to the world. "

Luckin Coffee has been laying the groundwork for everything from coffee brands to technology companies

In the external statement of the cooperation, Luckin Coffee said: "Luckin Coffee is the world's leading mobile Internet, big data and AI technology-driven technology company, as well as a typical representative of an innovative new retail model. Through the application of the latest technology and model innovation, it has fundamentally changed the transaction structure and user experience of the traditional coffee industry."

Prior to this, Luckin Coffee introduced himself as a "coffee brand", but this introduction is very different from that in the past, directly defining himself as a "technology company". Judging from Luckin Coffee's tone, Luckin Coffee's cooperation with Americana Group did not focus on the coffee industry. Luckin Coffee seems to prefer to highlight his technology and business model. It is reported that the cooperation between Luckin Coffee and Americana Group may be in the mode of technology export.

As for the specific contents of the cooperation between the two sides, and whether Luckin Coffee will open a shop overseas as a coffee brand, Luckin Coffee only said that "the press release shall prevail, and the others will not comment for the time being."

Lucky has tried to overtake Starbucks in the past two years by opening thousands of stores in China and using high-tech to accept orders, delivery and payment systems. At present, Lucky has more than 3000 stores in 40 cities in China, and plans to increase to 4500 by the end of this year. Starbucks currently has about 3800 stores in China.

Ruixing made no secret of its ambition to lay out other businesses and held an initial public offering in New York in May. According to Refinitiv, Ruixing raised about $645 million in its initial public offering. Luckin Coffee announced earlier this month that he would enter the tea market with the launch of a series of Little Deer Tea. Yang Fei, the company's founder and CMO, said Little Deer Tea hopes to evolve the traditional tea drink into a new tea drink in the product, and "change the tea drink from a street leisure drink to an office drink" in the scene. Luckin Coffee also set up a baking company, which means it will expand its coffee baking-related business.

The Middle East is Starbucks' main market, with 202 stores in Dubai, 191 in Saudi Arabia and 151 in Kuwait. Starbucks also has 146 stores in India and has an alliance with Tata, one of India's largest groups.

Starbucks is currently facing some challenges in its international business. Martin Brok, president of the company's Europe, Middle East and Africa operations, said at the end of last month: "the company's international business continues to feel pressure. He also said that the UK business had lost money. The UK is Starbucks' sixth largest international market.

Starbucks invests in technology companies to attack "one-stop service"

Also on the 22nd, Starbucks said it would acquire a stake in a digital technology company to upgrade Starbucks' digital transformation model by providing online ordering services and increasing payment methods around the world.

The technology company in which Starbucks will take a stake is called Brightloom, which was founded in 2015 and was formerly known as Eatsa, which made a splash with an unmanned restaurant. Good at catering science and technology.

Starbucks CEO Kevin Johnson said the partnership will drive a broader range of innovative opportunities to extend and connect customers 'physical store experiences to digital consumption models.

Kevin Johnson also stressed that after the promotion of digital consumption, customer loyalty to Starbucks and the frequency of consumption have increased significantly. Therefore, Starbucks is very happy with this cooperation, believing that more innovative application technology will enhance the overall customer experience.

Brightbloom CEO Adam Brotman believes the partnership will combine Brightbloom's catering technology with Starbucks 'digital flywheel technology to provide Starbucks with a "one-stop shop": mobile ordering, payments, order management, personalized services, etc., while simplifying the overall ordering process.

Starbucks 'Digital Flywheel technology can accurately collect and analyze each member's consumption habits and hobbies through artificial intelligence technology, and at the same time, it can use historical data integration to recommend suitable drinks to members according to the weather of the day.

The latest deal demonstrates the trend of large restaurant chains seeking to invest in technology companies as digital ordering and payment become increasingly important in the restaurant industry's incentive competition. This year, McDonald's announced the acquisition of Dynamic Yield, a technology company, and last year, Pizza Hut acquired QuikOrder, a delivery platform service.

Starbucks is expected to report earnings on July 25, and analysts expect both revenue and earnings per share to rise, with a focus on the company's aggressive expansion of digital consumption and delivery services that will spur same-store sales growth.

The opponent is too strong, Starbucks "has to" actively transform

According to WSJ, Starbucks, the global coffee giant, is facing fierce competition from Luckin Coffee, whose strength is mobile ordering, payment and delivery services. Ruixing Coffee plans to enter the Middle East and India markets in the near future and set up coffee retail business. Starbucks has to be guarded and transformed step by step.

Starbucks, on the other hand, although the company has focused on digitizing the consumer experience in the past, consumers in less than half of the 80 countries in which Starbucks operates can use the company's app, and consumers in only eight countries can order meals and pay through the app.

In 2018, when Ruixing Coffee, even coffee and other emerging Internet coffee brands began to exert their strength, these "new retail" models, which focus on online orders and offline distribution, and subsidy wars shook Starbucks 'position in the Chinese market, making the company eager to launch delivery services in cooperation with Ali. Starbucks, which had not expanded delivery services in the past, finally succumbed at this point. The world's first "coffee fast" concept store, which opened in Beijing on July 12, is a third space experience outside the main one, trying to solve the customer's large-scale demand problem with smaller stores and less rent in order to cope with Ruixing Coffee's "self-lifting + take-out mode".

Consumption habits are facing digital changes, China can be seen as a microcosm of the global market,"coffee war" in the future may develop into "technology war". Starbucks 'current retail dilemma can only be broken by transformation. This coffee brand, which was founded in 1971 and has been nearly 50 years old, cannot slow down its technological pace if it does not want to be surpassed and eliminated.

Source Reference: PR News/Beijing Business Daily/Juheng. com

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