Analysis of the present situation and Prospect of the Coffee Market in 2023 how does the coffee market become "conspicuous" step by step?

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Since the rise of Luckin Coffee, in the spirit of "good coffee is actually not expensive" has attracted a large wave of high-frequency consumers, and the coffee industry has suddenly become very "conspicuous". Coffee dominated by Lian Coffee and Luckin Coffee Internet has been rapidly expanded under the blessing of capital, and there has even been the saying that "China's coffee is a trillion market". As a result, a large number of new coffee brands have poured in to carve up the coffee market share, and even those who were not originally in the coffee field have joined the coffee business in an attempt to get a piece of the pie.

However, when everyone chooses to enter the coffee market, the direct problem is: the market has unlimited potential, but the competition is so great that how to stand out has become a problem for all cafe owners.

Looking back on the past year, due to the sudden outbreak of the COVID-19 epidemic in 2020, many brick-and-mortar stores are facing the crisis of closure, and Starbucks and Luckin Coffee, the two largest coffee chains in China, are also in a "dangerous" situation. in one sentence, the coffee market in 2020 can be: the whole coffee industry is experiencing a "shop closure tide" and was once in the doldrums.

On January 28, 2020, Starbucks, the world's largest coffee chain, first announced that it would stop operating most of its stores in China. It was not until early August of the same year that Starbucks announced that only 1% of its stores in China had not been reopened yet. During this period, Starbucks also closed a number of foreign stores. For example, it closed 200 existing stores in Canada in March and another 200 stores in Canada in June to cut operating costs. Under the heavy pressure of the epidemic, the owners of small independent cafes also had to take measures to suspend business. For small cafes, the small independent coffee industry is less risk-resistant because of its small scale. Forced to go out of business is faced with the problem of direct bankruptcy.

During the epidemic, Luckin Coffee, another major coffee chain in the domestic coffee industry, was in negative news for a long time because of a financial fraud scandal.

On September 8, 2020, the domestic Internet coffee chain even Coffee announced the closure of offline physical stores. In addition to the announcement of the closure of national stores, the coffee chain brand COSTA also fell into the camp of large-scale store closure.

Against this background, people cannot help but question:

Is it true that the coffee market can't do it?

At this point, the problem arises. In the midst of doubts, what we can see is that the coffee market is getting bigger and stronger! (portal: coffee brand MANNER is getting a new round of financing, and the coffee market is getting bigger and stronger! )

So how has the coffee market become "conspicuous" step by step?

one

The support of consumer groups

At the beginning of the article, we said: due to Luckin Coffee's "wool" temptation to get a lot of high-frequency consumers, although up to now, Luckin Coffee's negative news has not dissipated, it is undeniable that the birth of Luckin Coffee has really brought a good education to China's coffee market. Although it is still controversial, it has contributed to the development of China's coffee market to a certain extent. Coupled with the widespread popularity of "boutique coffee culture", consumers have made a new change in their overall consumption of coffee, switching from the initial instant coffee to hand-brewed coffee, from a single purchase scene to a more diversified coffee consumption scene experience. as well as higher consumption requirements on coffee products (such as coffee quality, coffee packaging, etc.), driven by consumer groups, the coffee market has been opened At the same time, more innovative coffee brands have emerged.

two

New Coffee Brand Blood injection

According to statistics, more than 10 coffee brands will receive financing events in 2020, and the sales of China's coffee market will exceed 11.5 billion US dollars. In addition, under the blessing of capital, entrants in many new fields have joined the coffee field and quickly seized the coffee market. Through different coffee categories and constantly breaking the old tradition, the coffee market has been injected with more new blood. Further promoted the development of the coffee market.

three

A new way to play with sales channels

According to the data of the forward-looking Industrial Research Institute, the sales scale of China's coffee market is expected to reach 300 billion yuan in 2020 and is expected to exceed 1 trillion yuan in 2025. What these data show behind these data is that the coffee market has a huge space for development. in today's consumer market, it is almost impossible to get public recognition if you don't want to break through tradition. If the major coffee brands want to dominate the coffee market, they have to stand in the most "conspicuous" position among consumers, and have to have new ways to play in terms of marketing strategies, new product push and store operation.

I don't know if you remember a word that was very popular last year, called "private domain traffic" (that is, discretionary traffic owned by brands or individuals). Most of the online customers in most cafes on the market are public domain traffic, which simply means that I will go to any price that has an advantage for me. Perhaps due to the influence of the epidemic, the sales channels of the coffee industry have undergone great changes last year. For example, the operation mode of coffee shops is no longer a single store operation, but pays more attention to the relationship chain between brands and consumers, that is, to create private domain traffic, to establish purchase entrances of their own brands, and to carry out digital transformation, such as Mini Program, APP purchase, unmanned retail sales and so on.

In the digital transformation, Starbucks in the coffee field is the first to set an example to launch a new retail store form: opening a "brown fast" concept store in the Chinese market, changing the previous dominant experience of the third space, and said that there will be a trend of parallelism between the third space and the fourth space in the future. In terms of private domain traffic, Lucky's previous data show that the brand has 1.8 million private domain users, contributing 35000 cups directly and 100000 cups indirectly per day, making private orders the third largest order source channel after APP and Mini Program (Lucky's APP and Mini Program pages set up the entrance to send coupons, which is Luckin Coffee's third largest order source channel) Private domain operation has greatly improved Luckin Coffee's operational efficiency. In addition, Luckin Coffee will also make an accurate analysis of user behavior based on all kinds of data, and on this basis, carry out marketing activities such as SKU adjustment, store promotion plan, supply chain adjustment and so on. Of course, in addition to these two giants, there are also many coffee brands that integrate APP user traffic pool with takeout platform user pool to make new highlights of their own brands from marketing strategies, new product push and store operation, such as e-commerce three-and-a-half.

Compared with the traditional offline retail coffee experience stores, Internet coffee consumption has become a popular, in which the digital transformation of the game can be said to be very successful.

Last

For now, with the improvement of the epidemic, in December last year, Starbucks said that Starbucks China business fully recovered at the end of the quarter, and the Chinese market had achieved positive growth. At the end of last year, Luckin Coffee also took the initiative to spend 180 million US dollars to reach a settlement with SEC and opened new stores to launch new products. WeChat groups also, as always, distribute discount coupons, raffles, live broadcasts, and so on. Lucky management expects that according to the current operational progress. It is expected to make an overall profit this year.

But the market is rapidly changing, only improvisation is the best way to deal with it, how the market development of the coffee industry in the later stage, we still wait and see.

* Image source: Internet