27-Nov-18, China Daily 

China is one of the world’s most competitive markets. This is what makes the unbridled success of American coffee shop chain Starbucks all the more puzzling. Since opening its first China outlet in January 1999, there has been no significant rival to Starbucks, allowing the Seattle-based company a clear run at capturing the market.

Chinas coffee retail market hots up (c) China Daily

Image: ImagineChina

But China’s retail coffee sector is hotting up. Starbucks holds a 59 percent share, followed by McCafe (part of McDonald's), a distant second at 6.1 percent. The total market in 2017 was estimated to be worth USD4.5 billion - and set to grow as China embraces a coffee culture. With the arrival of Beijing-based Luckin Coffee in 2017, the landscape for cafe culture in China has changed markedly, with Luckin serving up a serious challenge to Starbucks.

"Starbucks and Luckin are targeting different markets to some extent, but there is a lot of overlap as well. The big difference is that Luckin is focused primarily on online ordering and delivery, and as this is a relatively new concept, it has to educate consumers on the benefits, get them to try out the service, and hope to retain them based on the convenience and value,” said Pete Read, CEO of strategic research and advisory firm Global Growth Markets.

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