Why is Luckin Coffee so popular? How Luckin pioneered a new business model in the coffee industry

Luckin Coffee Surpasses Starbucks in Store Count Nationwide

"Luckin Coffee's number of stores has surpassed Starbucks, ranking first nationwide." No one expected Luckin's comeback to be so rapid.

According to Luckin Coffee's third-quarter 2022 financial report, its total store count has reached 7,846, including 5,373 self-operated stores and 2,473 joint-operated stores. That already surpasses Starbucks, making it the coffee chain with the most stores in the country (Starbucks, it seems, has lost again).

In just one short year, from applying for bankruptcy protection to surpassing Starbucks in store count, Luckin has completed a spectacular comeback. As a coffee enthusiast, I naturally wanted to dig into the reasons, only to find that netizens had already uncovered the truth.

In April 2022, on the first anniversary of its Coconut Latte, Luckin announced that it had sold 100 million cups. Just how good is the Coconut Latte? Perhaps it is less guilt-inducing than milk tea, yet offers more freshness than a classic Italian espresso, "a touch of well-balanced dopamine," as netizens put it.

Besides the Coconut Latte, Luckin, known as a "hit-making machine," also launched a trendy new product: Cheese Latte. On its launch day, sales directly broke through 1.31 million cups, making it the new "first-day single-product champion" after the Coconut Cloud Latte.

The Marketing Strategy Behind Luckin's Success

Luckin's ability to make its products go viral and send sales soaring is no random coincidence; it is full of strategic planning.

As everyone knows, Luckin is a master among masters at social media marketing. On Xiaohongshu, the marketing copy about Luckin is as comprehensive as an encyclopedia.

Luckin really knows what it is doing. During the Qixi Festival, it launched a "reverse marketing" campaign, collaborating with Pepe the Frog on a "Frog Luck Strawberry" drink.

On the paper bags were printed photos of Pepe the Frog and his girlfriend Cuihua making heart gestures, along with a small "peony" Easter egg specifically for single people, wishing all consumers, single or not, happiness and joy. The move directly captured the hearts of single young people.

So-called reverse marketing is really about using psychological contrast to create a sense of incongruity or unexpected surprise in the public's perception.

Luckin's collaboration stood in opposition to the "couple's carnival" of the Qixi Festival, providing a "festival" for single people. To some extent, this exceeded consumer expectations, using memes to resonate with young people and earning another wave of goodwill.

User Operation and Product Innovation

Luckin's success shows not only in its well-planned marketing but also in its refined user operations and the speed of its new product launches.

In terms of user operations, Luckin has opened a brand-exclusive livestream room on Douyin, using a companion-style livestreaming approach with high-profile hosts to complement its good-looking hit products, maximizing the livestreaming effect.

In the livestream room, various high-value coupons are essentially first-come, first-served. The 9.9 yuan Thick Milk Latte coupons, in particular, sold out immediately upon release. Netizens said they could not grab them at all and hoped the promotion would continue, preferably with one for everyone.

When it comes to coupons, Luckin has never been stingy, which may be why many people are willing to buy its products.

The speed of Luckin's new product launches comes down to its young R&D team. Being youth-oriented has always been an important policy of Luckin's management. Its employees are predominantly young, and the company believes only young people truly understand young people, so whether a coffee tastes good should be judged by young people themselves.

Luckin's new product development always goes through numerous internal tastings. An employee once mentioned, "The tasting sessions for a new product are divided into multiple stages. The final Matcha Frappé might have started as just a cup of matcha."

The Secret to Luckin's Remarkable Comeback

By leveraging marketing, focusing on user operations, and vigorously launching new products while using young people to attract young people, Luckin has successfully completed its remarkable comeback.

Looking at the domestic coffee industry and general coffee habits, developing well still depends on affordable chain coffee shops. Specialty coffee shops and Starbucks may have slightly less influence than Luckin.

Think about it: Luckin's target consumer group may be broader. Most people are ordinary consumers who do not have overly high requirements for coffee; some just need a coffee-like flavor. That extremely high cost-performance ratio has made a significant contribution to the spread of coffee consumption in China.

And now, the Luckin Coffee that everyone thought would not last more than two years has successfully entered its sixth year. Luckin's comeback story has only just begun, and its experience is a microcosm of a company breaking through from extreme difficulty. Although Luckin may face countless tough battles in the future coffee market, a market-respecting, mature, and steady company like this is likely to have good fortune.

Image source: Internet

FrontStreet Coffee Recommendation

If Luckin's milk-forward drinks are what you enjoy, FrontStreet has espresso blends built for milk. The Classic Blend and FrontStreet Coffee's Commercial Blend are the best milk partners: both contain a little Robusta, which delivers more golden crema and ramps up body and caramel aroma, and they are the first choice for a latte with rich crema. If you want nutty notes, the Signature Blend and FrontStreet Coffee's Black Cocoa Blend are the picks, since Brazil dominates their recipes and they bring complex almond, walnut, and peanut flavors to a latte, silky and lingering.

For a lower-concentration pour-over taken with a splash of milk, choose a medium-dark single origin such as FrontStreet's PWN Golden Mandheling, FrontStreet Paradise Bird, or FrontStreet Queen's Estate, which stay flavorful when softened with milk. For cold brew with milk, fruit-forward options like FrontStreet Strawberry Candy (a Geisha blend), FrontStreet Colombia Xizhua, or FrontStreet Mozart blend beautifully with a little milk.