Counterattack of "third": how does Pacific Coffee surpass Costa to become the second in the industry?

Core tip: who is the largest coffee chain in the Chinese market? There is no doubt that Starbucks should take the first place! Then who will take the second place? The latest record is that a guy called Pacific Coffee overtook Costa to become the "second in the industry" after Starbucks.

Who is the largest coffee chain in the Chinese market? There is no doubt that Starbucks (feature Reading) should be in the first place! Then who will take the second place? If you still think Costa from the UK is the second largest coffee chain in the Chinese market, it's out! The latest record is that a guy called Pacific Coffee (feature Reading) overtook Costa to become the "second in the industry" after Starbucks.

Whitbread, the parent company of Costa, reported in May that Costa had 344 stores in China. The author has learned that the number of Pacific Coffee stores in China is 458, exceeding that of Costa.

About a year ago, third Eye Retail exclusively reported on the cross-border play of Pacific Coffee in cooperation with banks and hospitals, when Pacific Coffee was still in the third place after Starbucks and Costa. However, a year later, Pacific Coffee surpassed Costa to become the second largest coffee chain in the Chinese market.

The story of Pacific Coffee can be traced back to 1992, when Tom Neir and his wife from the United States founded Pacific Coffee, which is aimed at business people, when they lived in Hong Kong. In 2010, China Resources acquired Pacific Coffee and became an important part of its consumer goods sector. With the help of China Resources, Pacific Coffee entered the mainland in 2011 and became a new force in the coffee chain after Starbucks and Costa.

After being acquired by China Resources Venture, Pacific Coffee was originally set up under China Resources Wanjia as a subsidiary of China Resources Vanguard. In April this year, after Huachuang Group, a listed company, was reorganized and spun off its non-beer business, Pacific Coffee broke away from the China Resources Vanguard system and was directly transferred to the restructured China Resources Entrepreneurship. Popularly speaking, Pacific Coffee has been upgraded from China Resources Wanjia to direct jurisdiction of China Resources Entrepreneurship, and its level is one level higher.

A popular word recently is "frigid brand", which refers to those brands that are low-key in appearance but full of connotation. These brands that pursue the style of moderation and minimalist aesthetics reveal a very strong sense of self in their bones: this is what I think life is like. For example, Uniqlo, MUJI and COS are typical examples of "frigid" brands in the clothing sector.

According to this definition, Pacific Coffee is such a "frigid" chain brand in the coffee industry. Compared with the hustle and bustle of Starbucks, the fast-fashion Korean coffee chain and some independent cafes that focus on literature and art, Pacific Coffee is like a low-key, introverted middle-aged man, not noisy, no show, quietly driving on the street corner, waiting for the group of consumers who belong to it.

In today's rich red sauce business society, the "frigid" brand seems to suffer a bit, but inadvertently, Pacific Coffee has opened 458 stores, making it the second largest coffee chain in the industry. The third Eye Retail learned that Pacific Coffee opened 75 new stores this year, with 2015 maintaining 15 per cent growth in total and 12 per cent in the same store, a valuable performance in the cold winter of consumption.

As the "third" in the industry, how did Pacific Coffee surpass Costa to become the second largest coffee chain in China? In the face of fierce market competition, how does Pacific Coffee maintain its tonality and competitiveness? Let's listen and see "the third Eye looking at Retail" to interpret for you one by one.

Resist "Korean Wave", surpass Costa, and share the Chinese market with Starbucks

One of the characteristics of the enterprises under China Resources Group is that it attaches great importance to the formulation and implementation of strategies. Pacific Coffee's unswerving strategy after entering the mainland is to resist the "Korean Wave", surpass Costa and share the Chinese market with Starbucks.

After Pacific Coffee entered the mainland in 2011, the great challenge was how Pacific Coffee gained a foothold in the market environment where Starbucks dominated the Chinese coffee market, Korean coffee came along with Korean popular elements, and some independent cafes diverted the market. It is against this background that Pacific Coffee has formulated the above strategy.

"at present, the mainstream coffee shop models in the Chinese market can be roughly divided into three categories. The first category is classic coffee shops such as Starbucks, Pacific Coffee and Costa, which are highly chained; the second category is Korean coffee driven by fashion stars and dominated by individuals, such as coffee with you, diffuse coffee, and zoo coffee; and the third category is independent coffee shops run by some individual owners. Pacific Coffee CEO Lanyi told Retail with the third eye.

"from a commercial point of view, although some independent coffee shops are very distinctive in operation and decoration, they exist in individual form after all and cannot form a large scale. In recent years, because most of the popular Korean coffee is in the form of monomer, the supply chain and standardization will become its deficiency. Only the classic coffee with a high degree of chain has a better room for development in the future. In the field of classic coffee, Starbucks has nurtured the Chinese market, and its position is difficult to shake in the short term, while Costa from the UK, Pacific Coffee can compete with one. Lan Yi said.

The changes in the coffee market in the past two years seem to confirm Lanyi's judgment. As a representative brand of Korean coffee, coffee accompanies you because of its rapid development and extensive joining, which eventually leads to the outbreak of "expansion sequelae", the resignation of the president, the breaking of the capital chain and frequent disputes among franchisees. The Costa, which ranks second in the Chinese coffee market and is ambitious to overtake Starbucks, has also slowed in the past two years and was eventually overtaken by Pacific Coffee, which ranked third. Data show that Costa opened 43 new stores in fiscal year 2014, while Pacific Coffee opened 78 stores.

Although Whitbread, the parent company of Costa, expects the total number of stores in China to grow rapidly to around 900 by 2020. However, compared with the ferocious momentum of the previous two years, the speed of development of Costa in the past two years has obviously slowed down.

Lan Yi, chairman of Pacific Coffee, is keen to run marathons. Many of the marathon "running groups" are the target group of Pacific Coffee. Up to now, Lan Yi has run ten half marathons. Driven by him, there is also a "horse racing fever" in Pacific Coffee.

Define customers, find customers, have relationships, stick to customers

Unlike general consumer goods, coffee shops need to create their own brand tone in order to strengthen consumers' sense of value identity. In the highly competitive coffee market, how does Pacific Coffee build its own brand tone? If it is compared to a person, how does this low-key, introverted middle-aged man find and attract his own customer base?

First, you have to define your customer base. Lan Yi uses some key words to portray the users of Pacific Coffee: they pursue the quality of life, they have humanistic feelings, they have artistic taste, they dare to take social responsibility, at the same time, they pursue a slightly technological sense of fashion.

Around these "user portraits", Pacific Coffee exerts its power from both inside and outside. Internally, Pacific Coffee continues to enhance the consumer experience by making articles on products, supply chain, store decoration and even membership services. Externally, we have developed a brand-driven strategy to find customers and stick to them.

"when we define our customers, we will look for our customers. For example, the office building must be one of the places where our customers are most concentrated. In the Internet and digital age, some groups and circles linked by interest have also become the focus of Pacific Coffee customers. Such as drama circles, book clubs, business schools, public welfare organizations and even marathon running groups. Lan Yi told Retail with the third eye.

It is precisely because of this strategy that Pacific Coffee rarely advertises to the outside world, appears to be very low-key, and blooms all its enthusiasm to the target customer group. You will see the active participation of Pacific Coffee in some concerts, drama troupes, hundred Horse clubs and even some very minority circles.

"for example, we work with the Shanghai World Music season to become a designated drink for the music season. We are also in talks with the organizers to exclusively license some music from the music season to Pacific Coffee for in-store playback. " Lan Yi said.

The author learned that Pacific Coffee will also cooperate with the "Wu Xiaobo Channel" founded by Wu Xiaobo, a well-known self-media man, and participate in its planned "foresight 2016: Wu Xiaobo Channel year-end Show." On the day of the event, nine Pacific Coffee stores can broadcast live Wu Xiaobo's year-end show and interact with it.

In order to stick to customers, Pacific Coffee has done a lot of work in the operation and maintenance of membership cards. As mentioned earlier, Pacific Coffee attracts many members with similar temperament and values because of its unique tonality. Pacific Coffee strengthens customer stickiness through a number of activities aimed at members.

Theme Coffee Workshop: members can listen to the professional explanation of coffee master on coffee knowledge, brew a delicious cup of mellow coffee under the guidance of professionals, and make a group of like-minded friends.

Performance free ticket activities: whether it is movies, dramas, concerts, Pacific Coffee and a number of performance activities for brand linkage, Taika members can win tickets in the event and watch the performance on the spot.

Free e-books: Pacific Coffee APP was officially launched in December 2015. The launch of APP not only realizes the convenient functions such as e-card and query of nearby stores, but also launches an e-book reading platform, which opens more than a dozen e-books to Taika members for free, explaining the bookish brand characteristics of Pacific Coffee.

The author learned that Pacific Coffee Hong Kong began to launch the membership program at the beginning of 2008. as of November 15, 2015, there were more than 120000 active members and a cumulative number of 106000 registered members. As of November 15, 2015, the number of active members in mainland China was 208000 and the total number of registered people was 118000.

The troika drives at the same time

At a time when Pacific Coffee was in full swing across the country, an in-store coffee counter called "volgo coffee" was opened at some stores in China Resources convenience store and Suguo supermarket. "volgo coffee" is another business of Pacific Coffee, a new coffee model launched by Enterprise Coffee Solutions (Coffee Solution). This is also the exclusive weapon for Pacific Coffee to compete with Starbucks and Costa.

"with the upgrading of consumption, more and more brick-and-mortar supermarkets attach importance to the improvement of the proportion of food and beverage and the shopping experience of consumers. Many supermarkets hope that their stores have coffee to provide to consumers. However, the operators of traditional hypermarkets do not understand the operation of coffee shops. For example, the introduction of equipment, the purchase and roasting of coffee beans, coffee production and personnel training. They need a complete coffee solution. At the same time, some entrepreneurs also want to open their own coffee brands and coffee shops. So we hit this piece of cake in the market. Through the intensive procurement of Pacific Coffee, mature training system and management mechanism, export a full set of coffee solutions to enterprises. This is our 'enterprise coffee' model. Lan Yi told Retail with the third eye.

In addition, the franchise business has also become a major part of Pacific Coffee. Pacific Coffee has carried out franchise business since 2009, carrying out the franchise mode of exclusive agent in a single city, based on the development of core cities. In addition to Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Xi'an six direct operation areas, other regions and eastern coastal cities are now stationed to seek franchise partners.

In Lan Yi's view, coffee retail, corporate coffee and franchise are the "troika" that support the balanced development of Pacific Coffee. This year's business performance shows that in the troika, the retail and corporate coffee business is developing well and growing faster than expected. Only franchise business growth is not as good as expected. This reflects the cautious attitude of investors against the backdrop of the economic downturn. We will actively adjust our strategy according to changes in the economic situation. " Lan Yi said.

Source: win the business network