Recently, the media exposed that Huawei is ready to cross the border to enter the coffee market!

According to SkyEye, Huawei Technology Co., Ltd. is applying for the trademark of "one standard coffee absorbs cosmic energy", which is internationally classified as catering and accommodation, and the current trademark status is awaiting substantive examination.

Before that, there were well-known sports brands.$Li Ning Co. Ltd. (02331.HK) $It was revealed that he was applying for registration of the trademark "Ning Coffee NING COFFEE". And the two state-owned enterprise giants "two barrels of oil" even started to distribute coffee retail across borders a few years ago.Kunlun hospitality Coffee and easyJet Coffee claim to be the coffee brands with the largest number of stores in the country.

How fragrant is the coffee track, which is frequently arranged across the border by the giant companies?

Target a vast market of hundreds of billions?

According to Burning knowledge Consulting, the current consumption of ground coffee in 2020 is about 2.4 billion cups, and the market size is expected to reach 50.7 billion yuan. By 2025, the market size is expected to reach 120 billion yuan, and the compound growth rate of the market size is expected to reach 19.8%.

Obviously, the overall growth rate of the coffee industry is still very attractive.

Judging from the field data, the atmosphere of coffee culture in China is also obvious to all.

There are more than 7000 cafes in Shanghai, ranking first in the world, according to Rising Lab, a research institute of Shanghai first Financial Media.

And Beijing is starting to overtake Tokyo, with 4000 stores, followed by Chengdu, Shenzhen and Guangzhou.The overall coffee culture in first-tier cities is not scarce.

In addition, according to research by international institutions, the increase in per capita income will also promote coffee consumption. For every 5% increase in national income, daily coffee consumption will increase by 2% to 3%. With the increase of national income and the gradual cultivation of consumers' coffee consumption habitsChina's coffee market still has development potential in the future.

However, it is worth noting that as the first to eat the dividend of Chinese coffee$Starbucks Corp (SBUX.US) $Earlier, its second-quarter results for fiscal year 2022 in May showed that its China market revenue was $740 million, down 14% from a year earlier.

And from the third quarter of last year to the second quarter of 2022, about 1/3 stores in Starbucks Corp's China market are still temporarily closed or only offer special star delivery and coffee express business. Starbucks Corp's same-store sales in China are down 23%, and the volume of same-store transactions is down 20%. In the same period last year, same-store sales increased by 91%, and same-store transaction volume increased by 93%.

Bloomberg's 12-month target price also reached $91, which is still 16% higher than the current price.

However, Starbucks Corp's pace of store expansion in China continues. Wang Jingying, chairman of Starbucks Corp China, said on the earnings call that Starbucks Corp added 97 new stores in China in the second quarter of 2022.And then focus on growth, which is expected to open 6000 stores in China by 2022.

In contrast, Ruixing, which also receives domestic coffee dividends, handed over its first profit report to the market in the first quarter since it was listed for five years.

June sixth$LUCKN COFFEE DRC (LKNCY.US) $Announced that the number of stores in the country has exceeded 7000.Its net revenue in the first quarter was 2.4046 billion yuan ($379.3 million), up 89.5% from a year earlier, and made a profit of 92.1 million yuan under non-GAAP criteria, compared with a loss of 307.6 million yuan in the first quarter of 2021.

In addition, the company opened 556 new stores in the first quarter, with a 9.2% increase in the number of stores compared with the previous quarter. At the end of the first quarter, the number of stores was 6580, including 4675 direct stores and 1905 joint stores.

Market research said that according to the research caliber, the profit margin of lucky stores has reached about 20%, that of tea stores is 15-20%, that of tea-friendly stores is 16-27%, and that of Starbucks Corp is less than 20%.

At present, market expectations for Lucky are also gradually recovering. However, lucky because it is still in the pink market, the current performance also requires investors to be more cautious and question marks.

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Finally, according to Li Ning Co. Ltd. 's public response, this registration of Ning Coffee is an innovative attempt by Li Ning Co. Ltd. for retail terminal consumption experience. Coffee service will be provided in the store in the future to enhance customers' comfort and experience when shopping.

Ren Zhengfei, founder of Huawei, has more than once mentioned the topic of coffee, cafe and coffee culture in public conversations, and incorporated coffee and coffee culture directly into his own management methods and management philosophy.

Therefore, coffee, a global social function, may be one of the important reasons why Huawei is involved in this field. Huawei may also take a fancy to the global media function of coffee, and by virtue of its nature of addiction, a good business model has emerged.