Search
  • MAP Asia Pacific Ltd

Starbucks Could Struggle as Chinese Coffee Upstarts Master Content-Commerce


It is no secret that coffee is big business in China, with the market projected to reach RMB 113 billion ($17.7 billion) in revenue this year and achieve a compound annual growth rate (CAGR) of roughly 10 percent over the next five years, more than double the expected global rate of 4.2 percent. For the likes of Illycaffè and Starbucks — which entered the China market in 1999 and now operates more than 5,000 stores in 200 mainland Chinese cities — as well as newer international entrants like Lavazza and Tim Hortons, China is a much-needed sales driver. While the challenge for Starbucks and other early entrants was building a culture of coffee consumption basically from scratch, the challenge now is fending off competition from a wave of (largely local) competitors that are nimble, innovative, and highly marketing-savvy. Whereas the heavily hyped Luckin Coffee — which opened thousands of locations at a breakneck pace over a three-year span before a dramatic implosion in late 2020 — took on the likes of Starbucks by offering similar beverages at unsustainably deep discounts, the new generation of Chinese coffee brands instead applies tried-and-true content-commerce strategies that cater directly to the tastes of young consumers and could foster long-term growth. One domestic Chinese coffee brand to watch is Shanghai-based Manner, which has grown from one streetside stall in 2015 to more than 300 locations throughout mainland China today. Manner’s retail footprint nearly doubled from June to October of this year after the company — flush with a cash injection from the likes of Singapore’s Temasek, Bytedance, and the venture arm of Meituan — opened an astonishing 150 new locations in rapid succession. According to Chinese media, Manner already boasts an eye-watering $4.5 billion valuation and is reportedly planning to raise up to $300 million via a Hong Kong IPO to fuel its ambitious expansion effort. Read More at https://jingdaily.com/starbucks-could-struggle-as-chinese-coffee-upstarts-master-content-commerce/

4 views