Competition is a key feature in China’s industries, but coffee retailer Starbucks never faced those challenges. Now Luckin emerges, and Starbucks has no longer a free ride, tells business analyst Ben Cavender to the New York Times.
The New York Times:
In May, Luckin sued Starbucks, arguing that the U.S. chain had signed exclusive contracts with commercial property owners that barred other coffee shops from entering the space if a Starbucks was already there.
It’s not going to be easy to oust Starbucks, which has 3,400 stores in more than 140 cities in China and plans to nearly double that by 2022.
Ben Cavender, senior analystof China Market Research, a consultancy based in Shanghai, estimates that it has a 70 per cent share of the market, blazing past other coffee chains like McDonald’s McCafé and Costa Coffee. But the company must prove it can stay on the cutting edge.
“The challenge is that consumers are much pickier about the experience they get now; they have other good options that have standardized quality and potentially a more interesting environment,” Cavender said. “So Starbucks has to do a better job. It’s not a clear win anymore.”
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