Why is everyone so keen to sell "single-digit coffee"?

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Nowadays, coffee is priced in "single digits" and is becoming a key card for people in the industry to compete.

Looking back at the coffee market a few years ago, single digits should be an impossible pricing figure, which you can drink at most in convenience stores. Since 2023, the number of coffee players who have joined the price war of less than 10 yuan has only increased, and the low-price strategy has become a common market phenomenon.

A steady stream of "single-digit coffee"

In addition to head-on contestants such as 9.9 Ruixing, 8.8 Cudy and 5 yuan lucky coffee, many regional chain brands have also set a price line of less than 10 yuan one after another, and even some new shops have taken the initiative to participate in this dispute, and single-digit coffee has directly become a signboard.

In Nantong, Jiangsu Province, a coffee chain directly names its own brand after "9.9", and all the regular items on the menu are no more than 10 yuan. At present, it has opened its fourth branch, and the cooperative joint venture model has been opened locally. Also in the name on the emphasis on "low price", there is a brand located in Qingdao "do not pick up coffee". Unless upgraded to SOE beans, all coffee categories will be priced in accordance with the "< 10" rule of the store name, making peers shudder.

In addition, the author saw a coffee shop in Shanghai on the review website, which set the price of American style at 6 yuan, while milk cafes such as latte, cappuccino, Dirty and Australian white all cost 9 yuan. This pricing is not particularly surprising at first glance in today's extremely inner-volume coffee market, but it is a different matter in Shanghai, which has an inch of land. According to the merchant, the rent for a place with a saleable area of about 10 square meters is as high as 13.

After watching these rolls to the extreme, people can't help but wonder how many cups of coffee should be sold that day in order to "return" to the original "capital"?

Small profits and quick turnover, can you really get your money back?

In the final analysis, the strategy of making a low price is nothing more than to snatch a certain market share in the form of small profits and quick turnover by arousing the public's desire to buy. The lower the pricing, the less profit, the more need to reduce costs in other ways to maintain the operational balance of physical stores.

Precisely because the giants have a large scale of operation, the supply chain is obviously more advantageous, and the probability of "knocking down" the cost price is also higher. Some netizens have calculated that even if a cup of Luckin Coffee is reduced to 9.9yuan, it still makes money, there is no situation of fighting at a loss, and the use of coupons is only limited to some coffee categories, which does not have such a great impact on profits.

On the other hand, many founders of affordable coffee have publicly said that single-digit coffee pricing seems "unprofitable", but as long as the money is "spent on the edge", there is still a gross profit that can be maintained. The business challenge is how to increase the volume of the cup to make up for the costs of rent, labor, depreciation, equipment depreciation and so on.

Picture from: a loaf of bread in the backhand

It is obvious that it is a business that does not make money, why do we still have to offer a low price?

You know, price is always the most sensitive element that touches the nerves of consumers. On social media, netizens pay more attention to what kind of "wool" coffee has than who has produced the new product. For these big names who mainly play the "fast coffee" model, a long-term low-price discount is the key card that the brand uses to occupy the market.

From the point of view of independent stores, through the low-price threshold for drinking coffee, it provides a fresh taste opportunity for those curious people, can experience the quality of their own products with a few yuan, and gradually train new entrants into high-frequency consumer customers, so as to improve the overall consumption buyback rate. As for how long the "single-digit coffee" can last, it depends on whether the performance-to-price ratio meets the needs of the public, and whether the response can meet or exceed expectations.

Picture from: DF81

In the past, the price band of a cup of coffee could be divided into at least several ranges (under 10 yuan, 10 yuan to 20 yuan, 20 yuan to 30 yuan, 30 yuan), but now coffee seems to be only divided into two groups, namely "under 10 yuan" and "above 10 yuan". If the price is more than 10 yuan, and the coffee quality, brand awareness and marketing are not as good as those of Ruixing and other leading enterprises, survival will be very difficult.

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