Recently, the 2023 performance report disclosed by Luckin Coffee has sparked heated discussions. According to the announcement, in 2023, Luckin Coffee will achieve a total net income of 2490.3 billion yuan, a year-on-year increase of 873%；For the same period, GAAP operating profit was 302.6 billion yuan, doubling compared with 2022.
The industry is becoming increasingly competitive.
In 2023, the total sales of Luckin Coffee in the Chinese market will reach 248600 million yuan (about 34..)US$500 million), surpassing Starbucks China for the first time to become the largest coffee chain brand in the Chinese market.
Lai Yang, a member of the Expert Committee of the China Chamber of Commerce, told reporters that the most fundamental reason why Luckin Coffee has become the largest coffee chain brand in the Chinese market is the change in China's coffee consumer group. In China, coffee has evolved from a niche and commercial consumer product to a mass consumer product. In this process, Luckin Coffee, which has a lighter store model than Starbucks, is more able to adapt to new changes.
In 2023, in China's coffee consumption market, Luckin Coffee is not unbeatable.
Guo Jinyi, chairman and CEO of Luckin Coffee, said at the earnings conference held on February 23 that the competition in China's coffee industry is becoming increasingly fierce, but the development pattern is far from being fully formed. Prior to this, Guo Jinyi also talked about the acceleration of the development of China's coffee market, with the influx of more brands, the Chinese coffee market will become more competitive.
From the number of stores and pricing strategies, we can get a glimpse of the competitive landscape of China's coffee market.
Judging from the number of stores, in 2023, Luckin Coffee will officially enter the "era of 10,000 stores". There were 8,034 net new stores opened for the year, and the number of stores increased by 97 compared to the end of 20228%。As of the end of 2023, Luckin Coffee has 16,218 domestic stores, including 10,598 self-operated stores and 5,620 affiliated stores.
Competitors are also "pressing closer". In February this year, Cudi Coffee, which was established even later, announced that the number of stores had reached 7,000, with stores all over the country.
According to a December 2023 report released by research institutes affiliated with the Aligra Group, a consulting firm, there are currently nearly 50,000 cafes in China. China has overtaken the United States to become the country with the most branded cafes in the world.
From the point of view of the pricing strategy, "9"9 yuan" became a key figure in the coffee consumption market. In June 2023, Luckin Coffee announced the launch of "99 yuan store celebration ** activity", which continues to this day.
At the financial report meeting, Guo Jinyi talked about the changes in profit performance in the fourth quarter of last year, saying that the decline in growth rate was mainly affected by factors such as seasonality, 10,000 store celebration preferential activities and fierce industry competition, but it was in line with expectations. At the same time, he said that in 2024, he will still adhere to the existing development strategy and pricing strategy, expand the user base, and increase the frequency of consumption to expand market share.
According to a person close to Luckin Coffee, the Luckin Coffee strategy has been continuing, "9The "9 yuan activity" will continue to be carried out, which will help Luckin Coffee continue to expand its market share and further consolidate its leading edge.
Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told reporters: "At present, moderate competition in China's coffee market is conducive to the development of the industry. For consumers, competition drives product innovation and service improvementFor the industry, competition can also stimulate the continuous expansion of the coffee market and increase consumer awareness and acceptance of coffee as a consumer product. At the same time, the fierce competition has also helped China's coffee industry to form a more diversified and differentiated market. ”
Efforts to sink the market and overseas markets.
The sinking market and overseas markets are becoming a new direction for Luckin Coffee.
Luckin Coffee's overseas market layout has begun to take shape. According to the data, Luckin Coffee will successfully deploy overseas markets in 2023, and the total number of stores in Singapore will reach 30 in 2023. Guo Jinyi said at the previous third quarter 2023 results meeting that Luckin Coffee will continue to deploy overseas markets in the future.
The sinking market has also become the direction that Luckin Coffee will focus on in the future. Guo Jinyi said that with the intensification of competition in China's coffee market, Luckin Coffee will continue to increase the number of stores in high-tier cities, and at the same time, accelerate the expansion of the sinking market through the joint operation model to further expand its market share.
In Lai Yang's view, the new development direction also points to the direction of consumer demand. In the long run, the sinking market will bring an exponential increase to the market capacity of China's coffee market, but in the short term, with the continuation of the war and the emergence of a large number of coffee stores, the competition in the sinking market is intensifying. At the same time, in the sinking market, some coffee brands do not yet have enough loyal consumer groups, and the emergence of a large number of new brands is easy to exacerbate the risk of consumer diversion.
Wang Peng said that the sinking market is expected to bring huge market space and development opportunities for Luckin Coffee, while consumer demand and behavior habits in the sinking market may be different from those in high-tier cities. Therefore, it is necessary for brands to conduct in-depth market research and precise positioning. At the same time, companies also need to have strong financial strength, operational capabilities and market insight to cope with various challenges and risks.