"Success Case Study: Luckin Coffee", is part of GlobalData’s Successes and Failures research. It focuses on the launch of the Luckin Coffee chain in China, which adopted an internet business model to disrupt the country’s fast-growing coffee category. It delivers crucial "what?", "why?", and "so what?" analysis to impart valuable lessons that can increase the prospects of a successful product launch.
Foodservice has evolved markedly in the digital age; every aspect of eating out, from product choice and convenience-seeking, to the dining experience and payment, have adapted to keep up with connectivity dependence. This is no more evident than in the coffee category, where mobile payment and delivery on demand are becoming just as important as a caf? having Wi-Fi and a coffee being Instagrammable. The new imperative for coffee chains is to make the consumption experience seamless across the online and offline worlds.
- One of the keys to Luckin’s success was confining the purchasing process to the smartphone, which resulted in a seamless brand experience from promotion redemption to product delivery.
- Despite its tech start-up mentality, Luckin was careful not to underestimate the power of offline marketing in gaining broad and repetitive exposure. The strategy of employing major celebrities as brand ambassadors on billboards across the country indirectly communicated superior quality for the brand.
- Underscoring the brand’s focus on customer acquisition over short-term profit, Luckin’s launch was accompanied by a number of attention-grabbing price promotions and deals. The allure of these promotions led to a surge in interest and, ultimately, new customers.
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