In May 2018, Luckin Coffee swiftly gained prominence in China’s Tier 1 and Tier 2 cities. Founder and CEO Zhiya Qian declared an ambitious plan in an interview, stating, “We will open 500 shops within 5 months with the initial capital of 1 billion RMB.” A year later, this Beijing-based startup successfully raised over USD 4 billion in its IPO. Explore the rapid ascent and strategic brand positioning of Luckin Coffee, unraveling how it captured the market’s attention and secured substantial financial backing in a remarkably short span.

Some say that Luckin Coffee is going to overtake Starbucks in China with its rapid expansion. Some say that Luckin Coffee can’t really be compared with a coffee chain. But with an operational model that bears almost no resemblance to a traditional coffee chain, what kind of company is behind the signature blue cup? Let’s take a closer look at the brand by using the 4 Facets of Brand Positioning of Luckin Coffee to discover the story behind the buzz.

Brand Positioning of Luckin Coffee – Truth: The Power of Accessibility

Luckin Coffee has strategically positioned itself by partnering with SF Express, a premier delivery company in China, ensuring exclusive app-only coffee delivery within 30 minutes. Through aggressive pricing strategies like “buy 5 get 5 free” promotions and monthly discount vouchers, Luckin Coffee consistently offers affordability, reducing the average price of its coffee to RMB20 or less. This unconventional fusion of digital experience with coffee consumption not only eliminates traditional coffee chain pain points but also revolutionizes the retailing and consumption of coffee. Dive into the innovative brand positioning of Luckin Coffee, exploring how it reshapes the coffee landscape by leveraging strategic partnerships and disruptive pricing models.

Luckin Coffee

Brand Positioning of Luckin Coffee – Vision: The Democratization of Coffee

From the start, Luckin Coffee realizes that consumers shouldn’t be waiting in line for a cup of coffee that costs well over RMB30. This was the white space in the market in which the company built an empire on. Calling itself a new retail professional coffee brand, Luckin Coffee provides affordability and accessibility to consumers by balancing quality, price and convenience under their new retail business model. They believe that by doing so, everyone in China will be able to have a cup of high quality coffee whenever and wherever they want.

Brand Positioning of Luckin Coffee – Universe: The Modern City Life

While Starbucks has a clear universe of creating a third place for visitors to experience both the comfort of their homes and the communal aspects of the workplace, Luckin Coffee is creating an entirely different universe. Their stores are often small and don’t offer seating, making it clear that it is not a place for consumers to sit back and relax. Instead, Luckin Coffee focuses more on efficiency and is more compatible with the pace of modern city life. In particular, Luckin Coffee is specially fitted into the universe of the work and business. Whether it is ordering a cup of coffee before you leave home to pick up on the way to work, or ordering man cups of coffee with colleagues to power through a 2-hour long meeting, Luckin Coffee immerses itself into the office world of the drinker.

Brand Positioning of Luckin Coffee – Personality: The Ambitious New Kid on the Block

No one can deny that Luckin Coffee is an ambitious outlaw who has broken the rules of the coffee industry. Every move the newcomer has claimed to achieve is daring: to open 500 locations within 6 months, to spend RMB1 billion as an effort to obtain new consumers, to raise billions in its IPO and more. And time and time again, it has delivered on its words. The still young food and beverage slash Internet company still has a lot to prove, namely whether it could sustain its current business model with aggressive pricing, but the message sent through its hunger and ambition is clear – Luckin Coffee is going to continue to disrupt and challenge the traditional rules of the coffee industry. 

Conclusion: A New Way to Serve Coffee

While Luckin claimed Starbucks as its biggest rival, these two brands are actually not competing on the same lane. Being more like a typical Internet platform brand such as Mobike or Didi with the operation model resembling more of Lawson or FamilyMart, Luckin Coffee’s strategy is fundamentally different from those of traditional food & beverage brands.

What will Luckin’s future look like? The next move probably would be taking advantage of the large number of consumers they have obtained and expanding horizontally. In the future, Luckin won’t limit itself to just selling coffee. But no matter what the future holds, being the ambitious disruptor that it is, Luckin Coffee has shown that innovation doesn’t always have to come from the product itself, but how it is consumed.