Major Coffee Giants like Luckin and Starbucks Engage in Fierce Competition on Douyin

The Rise of Douyin as an E-commerce Platform

As an app that grew rapidly over the past two years and passed 600 million daily active users in 2022, Douyin has gradually been seen as a rising star among e-commerce platforms. Add the energy it has shown in livestream e-commerce, and it has long been a must-win territory for beverage brands in recent years.

Coffee Brands Battle on Douyin

Browsing Douyin recently, I found that almost every well-known beverage brand is running group-buy promotions online, with drinks priced far below what they cost in store or on a mini-program. Luckin, Starbucks, Manner, NOWWA, Tims, Heytea, Nayuki and many others are fighting hard on Douyin, all launching ultra-low-priced online packages and drinks.

Luckin's Innovative Marketing Strategy

Not long ago Luckin gained popularity through its "male model group" in the Douyin livestream room. Unlike a typical livestream, Luckin set up a runway T-stage right there, where male models of different styles walked toward the audience holding coffees of various flavours. Many viewers joked that for a moment they did not know whether to watch the models or the coffee. The idea was meant purely as livestream marketing, but a Douyin group buy was launched alongside it.

Beverage brands have long moved past private traffic channels and started trying more diverse expressions to capture more market share. Luckin's coconut latte, which averages 20 yuan a cup on its mini-program, goes for only 14.5 yuan through Douyin group buying. Sales have reached as high as 640,000 cups, and it has even made the city coffee shop bestseller list.

Starbucks' Competitive Response

Another coffee chain giant, Starbucks, also makes the city coffee shop bestseller list. Its Douyin group buying offers a 19 yuan breakfast combo and a 56.9 yuan two-visit medium-sized specialty drink combo. For just 19.9 yuan you can get a Starbucks beverage plus breakfast, valid at all stores nationwide. This combo has sold as many as 862,000 cups, and there are plenty of other combos to choose from.

On social platforms, Starbucks fans noted that in the days after the group-buy coupons launched, the stores they visit regularly clearly felt busier than before, mostly thanks to Douyin group-buy redemptions.

Tea Brands Join the Price War

Besides the coffee chains, Heytea and Nayuki are also waging price wars through Douyin group buying. Heytea's Douyin flagship store shows that you can get a super-large barrel of passion fruit, grape or duck-shit-aroma lemon pound tea for just 15.8 yuan, with two choices. Earlier it even offered two cups of its classic bestseller "Flesh Grape" for only 28 yuan, and a grab coupon for a 100 yuan ten-visit consumption card, which works out to just 10 yuan a cup. At that price, who would not call it a bargain.

Nayuki launched a 9.9 yuan coffee series with four choices: latte, cappuccino or Americano, all at 9.9 yuan. Once that price was released, sales of the single item passed one million orders. And that is before Mixue's 0.1 yuan ice cream and Hushang Auntie's entire menu at 14% off.

The Douyin Beverage Market Boom

Earlier, the Douyin Tea Consumer Data Insights Report showed that in 2022 the number of tea-related videos and views on Douyin rose month by month. Comparing June with January, tea content videos grew by 58%. In June alone, related content views passed 14.7 billion and drew more than 280 million likes.

The playbook behind these campaigns is much the same: raise local exposure through Douyin group buying, then use specialty products and generous prices to pull in orders, complete the in-store visit and earn a repeat purchase, turning online traffic into real foot traffic. So, have you tried Douyin group buying yet?

Image source: Internet

FrontStreet Coffee Recommendation

Watching brands fight over price is entertaining, but the better question for a drinker is what to brew at home, and entry-level specialty beans are where most people start. Ethiopia is the birthplace of coffee and Africa's largest producer, and its coffees are usually named after a region or a cooperative. FrontStreet Washed Guodingding Cooperative is a classic Yirgacheffe representative with jasmine, lemon acidity and berry notes, while FrontStreet Sidamo Huakui is a traditional natural with berry, floral, jackfruit, melon and honey.

Brazil is the world's largest producer and grows mostly commercial coffee, yet it also has high-quality lots. Grown in the open sun, Brazilian cherries ripen fast, giving softer beans, gentle acidity and a fine, mellow sweetness. FrontStreet Brazil Cerrado Red Bourbon is an entry-level single origin with the classic cream, peanut and cocoa notes, and FrontStreet Queen's Estate is grown higher and is a rare Yellow Bourbon, adding butter, sunflower seed, macadamia and almond to a sugarcane sweetness that is just as good on its own as with milk.