Luckin Coffee was founded in November 2017 by Ms. Qian Zhiya, founder and former COO of the car service company UCAR (rival of Didi Chuxing). In fact, the CEO of UCAR, Mr. Lu Zhengyao, was the angel investor behind Luckin Coffee’s massive operating budget – by the end of May 2018, it has successfully opened 525 coffee shops in China.
In the past few years, the consumption of coffee in China has been on the increase. According to International Coffee Organization, China’s coffee market will grow to 300 billion RMB by 2020. However, it is difficult for new comers to gain visibility since competition is fierce. On the one hand, international coffee shop chains like Starbucks and Costa are expanding their presence and on the other hand, retail channels like 7-Eleven or McDonalds are trying to consolidate their market share. This is in addition to local operators that already exist in the market. For example, the Shanghai-base startup Coffee Box has been providing a coffee delivery service since 2012.
Apart from inviting celebrities to endorse the brand (in this case, the Taiwanese actor Chang Chen and Chinese actress Tang Wei), Luckin Coffee needed to broadcast the brand’s message to its targeted audience. Today, the main coffee consumering group in China are young white-collar workers in CBD areas, who also happen to be the first generation of social media users.
In addition to the written and visual content, two links displayed below the ad allow users to reclaim coupons and display the address of the coffee shop on a map. If users click the imbedded link on the poster they are redirected to a landing page which includes a video clip, the brand’s story, and coupon reclaim buttons. Tencent’s statistics show that users have stayed on the landing page for an average of 29 seconds.
Along with advertisements (posters, videos, etc) displayed inside elevators in Beijing and Shanghai’s CBD office buildings, Luckin Coffee’s social ad campaigns were a huge success.