COSTA joins hands with Hualian Group to carve up the Chinese coffee market with Starbucks

The Chinese market has gradually formed the status quo of the confrontation between Starbucks and COSTA, and Hualian Group has real estate resources behind it, so I am afraid that the advantage of COSTA in site selection will gradually appear.

Some people say that every literary youth has a dream about a cafe, but reality will say that behind every humble small cafe there is a high-cost investment and may end up with nothing.

Obviously, for a long time, people's perception of the cafe was a meter of sunshine in the quiet corner of the city street, or a faint scent of blues jazz.

It was not until the emergence of Starbucks that everything began to be subverted.

Yes, Starbucks, which runs in business circles and office buildings, uses noisy coffee machines and the hustle and bustle of people to tell consumers that "coffee can be taken away" and "coffee is chained".

After the taste has been questioned countless times, what exactly is Starbucks selling? And the COSTA that always competes with it, but it is difficult to achieve transcendence, what is the difference between them? Can the coffee industry chain also be localized?

Starbucks: it has nothing to do with coffee

If you think a 58-yuan cup of Blue Mountain coffee is too expensive, it just shows the first success of Starbucks. In fact, chain coffee shops sell more standard cups and cheaper than any other self-owned coffee shop. Obviously, Starbucks loyal consumers are used to the price range of 28 yuan to 35 yuan.

A Starbucks insider told reporters, "for people who do not have coffee consumption habits before, the pricing of coffee is extremely vague, so Starbucks has given a seemingly reasonable standard with its price."

In this way, cost control is a rule that it must always keep in mind. Loyal consumers should find that from one day on, even if you sit down in the store for coffee, you will only use paper cups instead of mugs. The reason for this is only to reduce the labor cost of washing cups. Of course, this is only a negligible part, and the equity-based business model is the real means of cost control.

According to the proportion of shares held by Starbucks headquarters in Starbucks around the world, there are four main modes of cooperation between Starbucks and other parts of the world.

Starbucks has a 100% stake in places such as the UK and Australia, 50% in Japan and South Korea, 5% in Shanghai and Hawaii, and no stake at all in the Philippines, Singapore and Malaysia. it's just pure authorization.

While insisting on being a direct operator while giving up part of its stake, Starbucks hopes to complete its own business with the help of "the power of others".

As for those mugs, they didn't really disappear; on the contrary, they were molded into another tagged marketing tool for Starbucks.

From Christmas models to limited editions, Starbucks' exclusive mugs are listed prominently in each store, taking up nearly 2/3 of the row space, while coffee beans can only be used as a foil. This is the second success of Starbucks.

"it has nothing to do with coffee", written by Howard Biha, a former executive vice president of Starbucks, shows that it has never been a traditional cafe. In fact, it subverts the mode of operation and survival of traditional cafes.

A clue can also be seen in the location of the store. There are thousands of pedestrians shuttling back and forth on its route with a desire to buy. The reason why Starbucks coffee has considerable profit margins, the most important factor is the location. Because of these unique positions, it has the opportunity to target young consumers, and during the few minutes of waiting to make coffee, Starbucks staff will talk to you about the weather, work and even weekend appointments. This is how the stickiness of interaction between young people is established.

COSTA shareholders have a strong background

By comparison, COSTA is somewhat dull and stereotyped. The British brand lacks the gene for ease and teasing in its bones.

But this is not the core reason why it is so difficult for COSTA to surpass Starbucks. In fact, its consumers are also highly loyal to it.

According to public statistics, in European and American markets, COSTA has gradually kept pace with Starbucks and even surpassed them since 2007. However, in China, due to the time lag in entering the market, it may take more efforts to catch up.

Unlike Starbucks, WhitBread Group, the parent company behind COSTA, ranks among the top 100 listed companies in the UK, and Pizza Hut is also its brand. In China, its partner is Beijing Hualian Group, which has two A-share listed companies with strong strength. Both jointly funded the establishment of Hualian Kashijia (Beijing) Food and Beverage Management Co., Ltd.

"Coffee is run in a fast-food way, which is where COSTA is highly consistent with Starbucks. As a result, the Chinese market has gradually formed a confrontation between the two companies, and the competition a few steps away does bring pressure to both sides. And Hualian Group has real estate resources behind, I am afraid the advantages in site selection will gradually appear. " A coffee industry operator in Shanghai analyzed it to the reporter.

The rise of niche coffee shops

At the end of 2013, the Chinese market set off public opinion attacking Starbucks, questioning its "most expensive retail price" in China. But the most expensive premise is that Chinese consumption attitudes towards coffee are very different from those in Europe, the United States and Southeast Asia. In our eyes, coffee is a light luxury; in the eyes of Europeans and Americans, coffee is a necessity of life. Higher prices are caused by differences in consumption in the regional economy.

So can local coffee shops find an opportunity to rise amid these doubts?

Since it began to operate quietly in the late 1990s, carving time has unwittingly expanded more than 30 stores. But unlike the above two, carving time does not abandon the nature of cafes to fast food culture, on the contrary, it restores the essence of coffee-literary style. There is no doubt that this cafe, which has a collection of books and even movies, has attracted many post-80s and post-90s young writers and artists.

Since it is not a fast-food model, it will not be able to follow Starbucks' path of expansion. As a result, "carving time" from the direct camp to join. Today, it has become a huge commercial carrier, carrying coffee colleges, clothing brands, furniture furniture, public relations companies, design companies and other diversified business entities, and received two rounds of financing in 2010 and 2012. Carving time Culture Group also began to prepare the new third board listing plan. If realized, this may be the first listed company to make coffee.

Zoocoffee, which combines zoo culture with coffee culture, has opened up another model of coffee consumption in China's first-tier cities. As a result of striving to bring the laughter and relaxation of the zoo to the city, it has opened the gap with Starbucks and COSTA in decoration style, integrating unique animal models, murals and light and shadow, which is its biggest selling point.

The South Korean brand, which owns five catering companies, has also adopted a franchise model to reduce the cost of expansion. As a latecomer in the industry, the price strategy adopted by Zoocoffee is to "follow the pricing goal", mainly based on Starbucks, COSTA, 85C, etc., and basically seek similarity in products and prices.

As a unique coffee shop, it reproduces the beauty of nature in big cities, creating a fresh and pleasant atmosphere, and its entry is bound to pose a threat to many competitors and replicas in the same industry in the market.