Chinanews client, Beijing, November 18th (Zuo Yukun) McDonald's, selling coffee?

Sell, wheat coffee!

　　McDonald’s brand McCafe has recently focused on young people who are "not awake" and announced that they will increase their share of the Chinese coffee market, claiming that "we do not regard anyone as a competitor. The Chinese market is very huge."

　　As soon as the words came out, the young man who couldn't wake up also woke up: "This sounds a bit familiar. Remember the last one who said that China's coffee market has potential... isn't it Ruixing?"

A McDonald's store in Beijing.

Photo by Zuo Yukun, China News Service

Green, blue, red and yellow, the coffee track is wonderful

　　From financial fraud and thunderstorm to suspension and delisting, to a 2 million yuan fine from the State Administration of Market Supervision in October, the Ruixing incident temporarily left a rest.

　　At that time, Ruixing, who was rapidly growing bigger by burning money, had become the second ofo yellow car in the eyes of many people.

Unexpectedly, Ruixing turned the "rollover" into a "turnover", not only did not disappear and bleak out of the market, but even reported profit.

　　In August, there were media reports that Luckin Coffee stated at the 2020 mid-year meeting held at the Xiamen headquarters that it had achieved very good results in the first half of this year: Excluding the stores that were closed due to the epidemic, as of July, the cash flow of a single store had been Positive number.

According to the current operating conditions, Luckin Coffee will achieve overall profitability in 2021.

　　"What's the matter, is it because I can't handle my shared bicycle, or is your coffee market floating?" Netizens commented.

The takeaway boy is taking coffee to the customer.

Photo by Yin Liqin

　　Facts have proved that the coffee market has indeed been a bit "floating" recently.

　　Tencent bet first.

In May, Tim Hortons China, a Canadian national coffee brand, received exclusive investment from Tencent to accelerate the opening of stores in the Chinese market and plans to open 1,500 stores in China.

　　Later, Starbucks is optimistic.

Starbucks opened a net 480 stores worldwide in the fourth fiscal quarter, of which 259 stores have a net increase in China, attracting Starbucks’ first investment of 1.1 billion yuan to build Asia’s largest factory in China.

　　Now, the hot Chinese market makes McDonald's, the world's leading restaurant brand, unable to sit still.

　　On November 16, McDonald’s China announced that its specialty coffee brand McCafé will invest 2.5 billion yuan in the next three years to accelerate its deployment in the mainland coffee market.

　　The Starbucks "Little Green Cup" that has long occupied the leading position in the past, and the Luckin "Little Blue Cup" that is still alive after the fraudulent storm, and the "Little Red Cup" of Tim Hortons, the "New Fresh Meat" Tim Hortons, also opened in Beijing. The first store is busy seizing the market.

How do you plan to win the McDonald’s "Little Yellow Cup", which is old and not old, and new and not new?

Low-cost route is king

　　"We have a very mature supply chain, and the cost price of the purchase allows customers to enjoy a cup of mccoffee at a very good price." said Zhang Jiayin, CEO of McDonald's China.

　　From this point of view, in an attempt to emerge in the fast-growing coffee market in China, McCafe is positioned to create a cost-effective coffee experience.

　　When it comes to high cost performance, Luckin has to be mentioned.

In Luckin's view, one big reason why coffee has not become a national drink in China is that it is too expensive.

The most important thing in the cultivation of coffee consumption habits is the word "cheap".

　　No matter how high the reputation of Starbucks brand is, can it beat the price difference ten times?

This is why the day of Ruixing's accident, it ushered in a new peak of one-day sales, because too many people worried that the Ruixing vouchers in their hands would not be used tomorrow.

Citizens wait in the store for coffee they have already purchased.

Photo by Yin Liqin

　　"People who go to drink coffee don't really care about these'mess' of Ruixing, they only care about whether they can drink a cheap and good cup of coffee." White-collar Meihui (pseudonym) is a heavy coffee dependence, Ruixing is in her Born when she was in college, she also witnessed Ruixing's cup of coffee rising from a few dollars to more than a dozen dollars now.

　　"Everyone has different tastes and hobbies of coffee, but at least in the eyes of me and many people around me, Ruixing's taste is still good. Daily refreshing and leisure are enough." In Meihui's view, it is often three or four. The ten-yuan Starbucks can only be used as an early adopter and not long-term. If coffee is a necessities of life, price is the primary consideration.

　　"It's much better than Starbucks, and it's very cost-effective!" There are many netizens with similar ideas.

Relying on the initial ultra-low price of less than 5 yuan, Luckin has accumulated a certain scale effect and brand value. This may be the reason why Luckin's higher distribution fees and reduced discount subsidies are still "very good".

Luckin's prices are also rising.

Photo courtesy of respondents

　　As for McDonald’s McDonald’s coffee, if it is priced below 20 yuan, it can be said to have collided with Ruixing’s current price. Some netizens said directly: “It is not impossible to have Ruixing’s preferential strength.”

　　It seems that even if it "does not regard who is a competitor," Mcafee cannot escape consumer comparison.

Channel convenience is an advantage

　　"With the blessing of McDonald's mature supply chain and online and offline retail channels, using McDonald's convenience, McDonald's shop does not need to start from 0, but from 1 to 2, from 2 to 3." In Zhang Jiayin's view, McDonald's is not new to the coffee field.

　　According to McDonald’s China’s plan, it is estimated that by 2023, there will be more than 4,000 McDonald’s coffee shops offering handmade coffee in the country.

"The goal is to make McDonald's where there is coffee." Zhang Jiayin said.

　　"McDonald's has an advantage. Other new coffee brands are built from the foundation. McDonald's already has everything. What we have to do now is to'start selling coffee'." Some netizens gave this summary.

Wheat coffee.

Image source: McDonald's official Weibo

　　In market competition, the channel winner often wins the world.

What market can McDonald's with mature channels face?

　　According to statistics from the Prospective Industry Research Institute, from 2013 to 2019, China's per capita coffee consumption increased year by year, and by 2019, the per capita coffee consumption was 7.2 cups.

However, in terms of development speed, the average annual growth rate of China's coffee market is 15%, which is much higher than the world's 2% growth rate. This shows that China's coffee market is entering a stage of rapid development.

　　"As the world's largest catering company, McDonald's is also meeting and satisfying the core needs and demands of consumers. It is a very wise choice to increase investment in coffee categories." said Zhu Danpeng, a commentator on the Chinese food industry.

　　"In recent years, with the continuous expansion of the coffee market, different consumer groups choose different types of coffee consumption scenarios and coffee consumption grades according to their own needs." In Zhu Danpeng's view, it provides diversified product choices for different consumer needs. Very important, McDonald’s own advantages will also provide support to McDonald’s.

Reaping consumer stickiness, it must be matched and broadcasted

　　"We found that more than 50% of customers need to eat with coffee when they drink coffee. This is also our very unique competitive advantage." In Zhang Jiayin's view, in order to better meet the diverse dining scenes of customers, Mai Coffee will be launched simultaneously 4 series of brand new meals, consumers only need to add a few dollars after buying coffee.

　　In today's coffee market, whether you start with coffee and sell it by the side, or sell coffee from another origin to make coffee, it is always inevitable to "eat and drink" together.

　　For example, compared with December 2019, Luckin Coffee's light food product types have added toast, soft European, baguette, and Daifuku products than before, and the prices are mostly concentrated below 10 yuan, which is quite effective. Attract consumers "by the way".

　　In addition to satisfying the appetite, other peripheral derivatives have gradually become standard.

　　"Coffee is the soul of Starbucks, and the cup is the sacred object of Starbucks." Do you still remember the Starbucks Cat Claw Cup War?

For a cup of drinking water, the sky-high prices, queues all night, fights and looting took turns, leaving behind a joke that "Starbucks is not a coffee shop, but a cup seller".

Around the launch of Mai Coffee.

Image source: McDonald's official WeChat account

　　Under the leadership of Starbucks' explosion of money, major coffee brands have embarked on the road of "doing nothing right", harvesting a wave of consumer stickiness while also making a lot of money.

McDonald's also failed to escape the vulgarity. In the first wave, it launched accompanying cups, scented candles, and environmental bags.

　　The routine is almost like this. Are you willing to pay for McDonald's, a "half newcomer" in the coffee industry?

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