Cashing in on Starbucks: China’s Lyancoffee sets up own Coffee Box brand as WeChat app moves on from delivering foreign brews
Company aims to become nation’s No 1 coffee brand; vows orders will arrive in 15 minutes
A public account on Tencent’s popular WeChat mobile messaging app that delivers popular foreign brands like Starbucks and Costa Coffee to customers in China has now set up its own coffee brand and already drawn over 300,000 users, according to Chinese media reports.
Established up in 2012, Lyancoffee also services Gloria Jean’s Coffees, delivering lattes, frappuccinos and more beverages to white collars in cities like Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu in Sichuan province and Hangzhou in Zhejiang. It doesn’t yet service Hong Kong.
The company dispatches its couriers to coffee shops all day long in the cities’ main business districts, but It does not have any partnerships with the foreign brands.
It promises customers will receive their order within 15 minutes. They must pay a delivery fee of 2 yuan (US$0.30), although this is set to rise for some foreign-branded coffees.
The app already has 800,000 subscribers and sees up to 15,000 cups of Starbucks coffee alone ordered each day, it said.
The company has become one of the biggest online distributors of Starbucks in China, according to tech blog geekpark.net. But it said it is ready to switch over to developing its own coffee brand - Coffee Box - as it aspires to become the No 1 domestic player in the country’s coffee market.
Coffee Box raised its first round of financing from several venture capital funds in China and a number of famous artists, according to news website yicai.com on Friday. Specific numbers were not released.
“Starbucks sells about 500,000 cups of coffee a day in mainland China. Coffee Box can target 50,000 cups a day this year and double that in 2017,” said Zhang Hongji, marketing director of the brand.
“We plan to set up 500 coffee production sites in major Chinese cities this year, with more to come in the future,” Zhang said.
“The Chinese coffee market is growing at a rate of more than 10-fold every year. It’s too big to let a single start-up become a giant in the industry,” he added.
“We never thought of trying to be a Starbucks copycat. Our logo and cup are orange, and our target demographic will be young internet users.”
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To encourage its customers to choose Coffee Box, Lyancoffee said it is raising its delivery fee from 2 yuan to 5 yuan for a cup of Starbucks, Costa or Gloria Jean’s. The fee for its own brand will remain unchanged.
“Even though this start-up is attracting users by delivering Starbucks, it does not seem to have committed any illegal act or infringed on [Starbucks’] intellectual property rights,” said San Francisco-based lawyer Bob Bao.
“It is being smart in not using Starbucks’ image directly on its platform, but instead getting Starbucks’ customers to migrate over to its brand through its delivery services,” he added.