On November 6th, with the rise of Internet coffee, traditional coffee brand giants have accelerated the layout of the takeaway market. Earlier, Starbucks released its third-quarter earnings report. The same-store sales in China fell by 2%, showing the first negative growth in nine years, making it the worst performing market in the world. Starbucks had to join the takeaway war to save the Chinese market’s profit decline.
A few days ago, Starbucks announced its fourth quarter earnings report for 2018. As of September 30, Starbucks net income for the fourth quarter was $6.3 billion, an increase of 11% year-on-year. For the full year of FY18, Starbucks net income reached a record $24.7 billion. Increased by 10% year-on-year. Its same-store sales in the Chinese market increased by 1%, compared to the third quarter. The industry believes that the rebound in sales is directly related to Starbucks’ new take-away business, and Starbucks said it will continue to expand its take-out business in China.
According to data from the Prospective Industry Research Institute, global coffee consumption growth rate is 2%. In some emerging countries, such as China with broad market prospects, the coffee market is growing at an annual rate of 15%. The industry estimates that China’s coffee market has a market potential of 100 billion yuan this year. In 2007, the number of cafes in China was 15,900; by the end of 2016, the number of domestic cafes had reached 85,000, and in 2017 it increased to 98,300. With the increasing maturity and expansion of the Chinese coffee consumer market, the new coffee retail model, which is formed by convenience store coffee, take-away coffee, and self-service coffee machines, has shrunk the coffee consumer and coffee consumer market. Among them, the coffee take-out market represented by the Internet coffee brand has achieved rapid development.
The first entry into the delivery market was the Internet coffee brand “Lian Coffee”. Then, the offline chain coffee brands COSTA and Pacific Coffee joined in 2015 and 2017 respectively, but neither of them had their own order channels and distribution. The team used a third-party take-out platform; at the beginning of 2018, Ruixing Coffee joined, and the development momentum was the strongest. According to official data, as of August 2018, more than 800 stores have been completed, and 2,000 stores are expected to be opened by the end of the year. The goal. In July this year, Rui Xing announced that it completed the A round of 200 million US dollars of financing. According to media reports, after the financing, Rui Xing coffee was valued at 1 billion US dollars. In addition, fast food giant McDonald’s also launched a wheat coffee delivery service. The main domestic coffee brands can be described as “all employees are in harmony”, and the competition in the coffee take-out market has become increasingly fierce.
However, the rapid development of Ruixun coffee is also facing the pressure of high customer costs. According to industry insiders, Ruixun Coffee is currently the first free, plus marketing advertising costs, its single customer cost is around 100 yuan. At the price of 20 yuan for a single cup of coffee, at least 7-8 cups of coffee must be purchased to be equal to the cost of the customer. Most Internet coffee brands attract consumers through preferential subsidies or high quality. Under the “low price and high subsidy”, cost pressure should also be considered. It is not easy to do coffee delivery business. Previously, Starbucks also revealed that once the delivery time is too long, it is easy to affect the taste of coffee. Secondly, the distribution profit is not high, the distribution is complicated, and now all major brands have seized the coffee take-out market, and the competitive pressure is quite large.
At present, it seems that the coffee brand will face many challenges in the field of rapid layout and take-out, and will also impose higher requirements on the personnel, supply chain and capital of the coffee brand, and will also face the pressure of rising export costs. However, China’s coffee market is still growing, and the market for whole coffee take-out is also expanding. Diversified and multi-format will be the future development trend, and the market competition for coffee take-out will become more complicated and fierce.