高盛_瑞幸咖啡研究报告-2018.05-20页_857kb

China Consumer Pulse Check: Luckin Coffee's Growth Reveals Key Trends

Core Content

The explosive growth of Luckin Coffee, which went from nonexistence to selling 5 million cups in just 4 months, provides insights into the evolving preferences and behaviors of Chinese consumers. This analysis highlights three key trends that are crucial for advertising, retailing, and food services companies in China.

Main Trends and Insights

1) Getting Attention: Real World Presence Still Critical

• Offline presence remains vital for brand awareness, even in a digital-first environment.
• Elevator advertising is a highly effective medium, especially for targeting young office workers. It is "captive and repetitive" and has seen a 20% YoY growth in 2017.
• Luckin Coffee used elevator advertising to rapidly build brand awareness and also leveraged location-based advertising to alert users about new store openings.
• New Marketing (integration of online and offline strategies) is expected to grow further, driven by the convergence of retail and advertising through New Retail.

2) Convenience: Bringing Products to Consumers

• Convenience is highly valued in China due to long working hours and commuting times.
• Luckin Coffee's focus on delivery and convenient locations (e.g., office lobbies) aligns with this trend.
• Food delivery is becoming a habit, with delivery costs in China being significantly lower than in the US (US$0.8 vs. US$4.1).
• Delivery is complementary to restaurant sales, as shown by Meituan's survey where 60% of users used delivery as a substitute for home cooking, while only 28% used it as a substitute for eating in restaurants.
• Low-tier cities are becoming a significant part of the food delivery market, with 40% of orders coming from them in 2017.
• Delivery to home is the most common use of food delivery, followed by offices and schools.

3) Millennials on Cooking: No Thanks, Not Yet

• A significant portion of Chinese millennials (35%) are willing to rent a home without a kitchen, and 7% are even open to buying one.
• Dining-out is becoming a more preferred social activity than going to bars, with experience being the top factor in restaurant choice.
• Millennials are the key drivers of this trend, contributing 60–70% of restaurant transactions and sales value in 2017.
• Restaurants and food delivery are replacing home cooking, driven by convenience and the social aspect of dining.

Key Stocks and Investment Outlook

Additional Highlights

• Travel to Korea saw a 13% YoY increase in March 2018, marking the first positive growth since the 2017 group tour ban.
• Millennials are increasingly favoring dining experiences over home cooking, with a clear shift in consumer behavior.
• Food delivery is not only affordable but also becoming a regular part of daily life, with usage patterns shifting to weekends and home delivery.

Summary of Key Takeaways

• Offline presence is still essential for brand visibility and awareness, especially in targeting young office workers.
• Convenience is a key consumer priority, with delivery and accessible locations being crucial for success.
• Millennials are driving the shift from home cooking to dining-out and food delivery, influenced by lifestyle and social behavior.
• New Retail and integrated online-offline strategies are set to transform the consumer landscape, offering growth opportunities for brands and retailers.
• Elevator and cinema advertising are gaining traction due to their effectiveness and affordability.
• Food delivery is a growing trend, with increasing market share and usage across all demographics and locations.

Conclusion

Luckin Coffee's rapid growth reflects a broader trend of digital integration, convenience-driven consumption, and a shift in consumer behavior. These insights are valuable for companies in advertising, retailing, and food services, emphasizing the need to balance digital innovation with real-world presence and to cater to the growing demand for convenience and social dining experiences.