The weather outside the window is getting warmer, but the epidemic has not calmed down, so that many business sectors still continue the "hard model" since the beginning of 2020.

Those who are also experiencing the "hard model" also include coffee store brands with offline customer aggregation as the main mode, such as Starbucks Corp.

At the end of last month, Starbucks Corp China said it would temporarily close more than half of the country's stores. According to public data, Starbucks Corp had 4292 stores in China by the end of 2019. According to this calculation, Starbucks Corp has temporarily closed more than 2000 stores in China.

In fact, mixed with the macro background of "can only endure", including Starbucks Corp, there is really no need to over-interpret the brief "store closure trend" of any consumer brand. What is really worth mentioning is that we can re-examine the current chaotic beverage landscape in China during the window of the epidemic.

Optimistic expectations of the beverage market

Not long ago, Starbucks Corp released his latest financial report. Data show that Starbucks Corp's revenue in the new quarter was 7.097 billion US dollars, an increase of 7% over the same period last year, in line with market expectations. Of this total, revenue in China reached US $745 million, accounting for 10% of the total revenue, an increase of 13% over the same period last year. Starbucks Corp also revealed his performance expectations in his financial report. Excluding the impact of the epidemic, Starbucks Corp's revenue for the 2020 fiscal year is expected to grow by 6%, 8%, and global same-store sales by 3%.

However, Starbucks Corp also mentioned in his financial report that COVID-19 's epidemic may have a great impact on his performance in the second quarter of fiscal year 2020 and even for the whole of fiscal year 2020, and China has always been one of Starbucks Corp's largest overseas markets.

In addition, as we all know, the challenges Starbucks Corp faces in China are not only the epidemic, but also the entire market environment, such as Ruixing.

By the end of 2019, the number of stores directly operated by LUCKN COFFEE DRC had reached 4507 (at least in terms of number, it took two years to surpass the number of Starbucks Corp's stores in China in 20 years), and it was different from Starbucks Corp's concept of "third space". As lucky stores are mainly self-picking up and distribution, the impact of the epidemic may be relatively small.

Of course, if you switch to the entire beverage market, Starbucks Corp's close enemies are tea brands represented by Xicha. After all, when people queue in mall to buy a cup of Xicha, they will not go out and turn left to buy another cup of Starbucks Corp.

And like tea is also expanding at an alarming rate. Data show that as of December 31, 2019, Xicha has opened 390 stores in 43 cities, with more than 200 new stores in the past year, more than the total number of stores in the six years before Xicha, and founder Nie Yunchen has said many times that the pace of opening stores will be accelerated in the future.

It is worth mentioning that, especially represented by the rise of tea, there may be a larger trend logic emerging behind it.

I am very impressed. Investor Li Feng once said that this round of consumption upgrading in China may bring not only a few successful start-ups, but also an opportunity for the global rise of Chinese industry.

In Li Feng's view, spreading out the historical timeline, there have probably been three "consumption upgrades" in the world in the past 100 years: the first was before World War I, when Britain gave birth to Lipton Black Tea and Scotch Whisky, which were quickly exported to the world; the second time was the rise or rapid development of the United States, Coca-Cola Company, McDonald's Corp, KFC and other brands in the 1950s and 1970s after World War II-- Starbucks Corp was born in this window. The third time is from the mid-1970s to the mid-1990s, in Japan, MUJI, Panasonic, Sony Group Corp and other brands have risen or ushered in rapid development.

It is not difficult to find that three consumption upgrades of different ages share the same logic: as long as the country's economy and population are large enough, and productivity and GDP grow fast enough, there will be a trend of high concentration in some areas of consumption, resulting in strong enough brands-strong enough to have the opportunity and ability to jump into global brands in a short period of time, and these brands export not only products and services. There is also lifestyle and culture, so "if the laws of history exist and there are no huge problems in the trajectory of China's economic development, then when China enters the consumption upgrading cycle, it will produce world-class brands that far exceed our imagination." "

Is this optimism expected to happen in drinks?

I don't know, but at least in the eyes of some professionals, the "double high" of gross profit margin and loyalty, the commendable "social currency" attribute, and the scale effect of increasing returns, so that the beverage market is expected to become the representative track of the so-called "New domestic Movement", and it is even possible to emerge a new giant at the level of Starbucks Corp.

At least in theory, as Harvard Business Review said in an article a few years ago: when a new "luxury brand" takes root, it can instantly change the inherent rules of this category and quickly achieve market leadership, as evidenced by Starbucks Corp's strength in China over the past 20 years-but new competitors may also emerge. And "A new competitor always makes previous new luxury product winners look out of date." "

Starbucks Corp's counterattack

No one wants to "look out of date". Starbucks Corp's counterattack to "keep pace with the times" in China has accelerated since last year.

In the middle of last year, Starbucks Corp opened the world's first "brown fast concept store" in Beijing, focusing on users who order by mobile phone (by the way, although it is the "third space", but Starbucks Corp has always encouraged take-out), with an area of about 10 square meters. surrounded by office buildings-it is interesting to note that there is a lucky pick-up shop less than 20 meters from the store.

In the eyes of many people in the retail industry, once the omni-channel sales channel is opened, Starbucks Corp and Ruixing will no longer see the king in the two major territories of Internet retail and traditional retail, but will enter the overall battle of omni-channel.

In addition, Starbucks Corp has also extended his huge tentacles to the territory where tea is fond of-even though the eight "playful ice tunes" launched in the Chinese market last year may not have won the first battle, it is foreseeable that this should not be Starbucks Corp's last attempt in this field.

Whether it is "browning fast" or "playing with ice", it is the trend of this company, which once almost monopolized the whole understanding of coffee.

In fact, in the flexible and changeable Chinese market, it is no longer expected to face the global market in a "copy-and-paste" way, but to adjust the local battlefield within a certain range according to the habits and preferences of local users. rapid optimization into the species most suitable for the local environment may increasingly become a common measure of all multinational giants.

Of course, it's not easy. Still take "play ice tune" as an example, as you know, many people think that it is not as good as tea, to a large extent, this is because Starbucks Corp uses canned fruit and fresh-cut fruit.

So for Starbucks Corp, who is rich and powerful, is it really difficult to use fresh-cut fruit?

The answer is: it's hard. Starbucks Corp, a multinational tycoon of this size, precisely confirms Wang Xifeng's famous exclamation that "there are great difficulties."

In fact, as Huang Hai, a sharp capital investor, said in the China Consumer Industry report, Starbucks Corp's human resources structure and store design do not support this: "like tea to make fresh-cut fruit tea requires a dozen people to divide the labor and cut different fruits. The area of the kitchen and bar of Xi Cha is 1/4 the size of a store. But Starbucks Corp's 150sq m shop, bar and kitchen add up to less than 10 sq m, so there are no room for so many people. Starbucks Corp only two or three people make drinks at the bar, employees only need to learn to use coffee machines, multinational enterprises pursue the standardization of production, the simpler the process, the better. Starbucks Corp is a multinational company, important decisions have to be made by the headquarters in Seattle, USA, from the supply chain, human resources, workflow to store design are globally unified, so it is impossible to respond to the Chinese market so quickly. "

However, even so, from "Kaikuai" and "playing with ice tune", we can still see that Starbucks Corp's move may be late in the face of China's huge beverage market, but he is unlikely to be absent, in order to keep up with this fickle era. I believe there will be more new ways to play it this year.

"two flywheels" in the same direction

What's more, Starbucks Corp's brand moat is still solid.

At least for a considerable number of white-collar workers, the brand tonality that Starbucks Corp has accumulated for many years has not been easily broken by Lucky's low price. For some loyal fans, the emergence of "enemies" has even strengthened the already unbreakable chain of disdain.

Well, the heavy history, the professionalism of the green apron and the black apron, intertwined with other details, are all working together to capture the minds of consumers.

Liang Ning, a scholar, once made a comparison between Starbucks Corp and Ruixing: "Starbucks Corp's aim is to make continuous profits from the coffee business, so Starbucks Corp is very sober and committed to running the brand, and then it gets the brand premium and resources first. So there is profit space to further invest in the brand. This is Starbucks Corp's model flywheel. Lucky's goal is speed. Use capital leverage to pry the number of households, and then obtain capital leverage, and then further pry the number of households. This is Lucky's model flywheel. "

Different "model flywheels" lead the second and third coffee waves in China (the first is Nestle instant), while the "two flywheels" in the same direction is to work with other players to expand the Chinese coffee market.

As you know, China's per capita coffee consumption has continued to rise in recent years, and the size of China's coffee market has exceeded 200 billion yuan in 2018, but compared with Japan, South Korea, and the United States, China's per capita coffee consumption is only about 6 cups, and this huge gap is likely to split into an incremental market of hundreds of billions.

So, in the face of such a broader future, this market is far from being a "winner": Starbucks Corp himself is expected to become more flexible, and new forces will at least build a more powerful moat at the brand end.