Kudi Coffee: A new player in China's coffee market

On September 15, competition in China’s coffee market became increasingly fierce, and Kudi Coffee, an emerging brand that has attracted much attention, stood out with its rapid development momentum. It is understood that Kudi Coffee was established less than 10 months ago and already has more than 5,000 stores. However, this budding brand has also caused controversy. The reason why Kudi Coffee has attracted so much attention is closely related to its founding team. Former Luckin President and Chairman Lu Zhengyao and former Luckin Coffee CEO Qian Zhiya resigned from the board of directors due to Luckin's financial scandal in 2020. Now they have reappeared, injecting obvious "Luckin" genes into Cudi Coffee. In addition, Kudi Coffee follows Luckin in terms of store location and store type, adopting a similar small store model and adopting a joint venture model similar to Luckin. Although the outside world generally believes that the two brands have no actual relationship, Kudi Coffee is obviously influenced by Luckin.

The rapid rise of Kudi Coffee is due to its strategy of burning money in exchange for growth. They have invested heavily in marketing, such as signing a contract with the Argentinian national team and launching joint products, which have gained a certain degree of popularity. In addition, Kudi Coffee has also adopted a low-price strategy and launched a number of low-price activities, such as the "Coffee Carnival Event in Hundreds of Cities and Thousands of Stores" and the "Summer Ice Drink Season, Every Day 9.9" marketing campaign. These measures have achieved obvious results. The sales volume of Kudi Coffee has grown rapidly and the number of stores has also increased significantly.

However, the recent price increase strategy adopted by Kudi Coffee has caused some problems. They canceled some low-price events, which led to a decline in sales, with franchisees reporting a significant drop in sales. Supply chain problems also occur frequently. Kudi's franchise stores use different brands and models of coffee machines, and the supply chain is poorly prepared, resulting in product shortages. In addition, franchisees are also facing fierce internal competition. Soon after the new store opens, there may be a new Kudi store nearby

Luckin Coffee is in sharp contrast to other coffee brands. Luckin Coffee has adopted digital operation capabilities and can still maintain profitability even during the 9.9 yuan event. In addition, the number of paying users of Luckin Coffee has also increased significantly, and its operational efficiency has been improved

In general, the competition in China's coffee market is becoming increasingly fierce. Despite Kudi Coffee's rapid rise, it faces challenges such as declining sales, supply chain issues and fierce market competition. Kudi Coffee needs to find its own unique highlights while strengthening its supply chain construction to gain a foothold in the competition. After all, the low-price strategy can bring short-term attention, but to survive in the market for a long time, more features and innovations are needed

According to the editor’s understanding, the competition in the Chinese coffee market is already very fierce, and for new players For brands, time is short and they need to quickly find their positioning and competitive advantages.

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