Starbucks Battles Chinese Start-Up Coffee Company

Delivery is proving to be a huge competitive marker for coffee companies in China.

March 18, 2019

SEATTLE – Seattle-based Starbucks has operated in China for nearly 20 years, but right now it’s struggling as a local start-up, Luckin Coffee, is winning over customers. Luckin’s advantage? Delivery in under 20 minutes.

The Wall Street Journal reports that this “battle to bring on-demand coffee to China” shows the importance that consumers place on delivery—especially for Western companies.

Starbucks’ marketing efforts in China have focused on wealthy consumers, and the idea of hanging out inside of a hip café. But seeing the demand, the company partnered up with to being delivery at 150 stores in September 2018. It’s using specially developed lids and packaging to help protect drinks from spilling or cooling during transit.

Luckin, however, has made delivery a foundational element of its business since the beginning—and doesn’t charge as much for their coffee, catering to the cost-conscious crowd.

The WSJ reports that Starbucks plans to open nearly 600 stores in China this year on top of the 3,700 it operates there now. It also plans to expand delivery at 90% of Starbucks stores in the country by September. Alternatively, Luckin plans to open about 2,500 stores in China this year, which would bring its total to 4,500.