Tag Archives: coffee

IPOs: Money-Burners DouYu, Luckin Look to Wall Street for Cash

Bottom line: Live streaming gamer DouYu should get relatively strong demand for its $500 million New York IPO, while a smaller listing plan by younger coffee specialist Luckin is likely to die on the vine.

Coffee specialist Luckin brews up Wall Street IPO

One of the longest runs I can recall for New York IPOs by Chinese firms continues to chug ahead, with two new filings, one by live streaming game operator DouYu and the other by a high-tech Starbucks (Nasdaq: SBUX) challenger called Luckin. This particular IPO window is now rapidly creeping up on its second anniversary and doesn’t seem to show too many signs of running out of steam.

The big difference between companies coming to market now is that many are younger and still losing big money, compared with companies earlier in the wave that were older and mostly profitable. That’s not too surprising, since usually the most profitable companies move to the front of the line because they’re naturally more attractive. Read Full Post…

RETAIL: Alibaba, Tencent Take Wars to Convenience Stores

Bottom line: Alibaba’s move into unmanned coffee shops could stand a strong chance of success due to its relative simplicity, while WeChat’s move into Hong Kong convenience stores should also be relatively well received.

Alibaba samples coffee shops

Convenience stores are shaping up as the next battlefield in the wars for supremacy between Internet titans Alibaba (NYSE: BABA) and Tencent (HKEx: 700), at least based on the latest headlines. One of those has Alibaba preparing to roll out an unmanned coffee store concept in its hometown of Hangzhou, while the other has Tencent’s WeChat rolling into Hong Kong in a big way in a new tie-up with 7-Eleven convenience stores.

Starbucks (Nasdaq: SBUX) probably doesn’t need to be too worried just yet about the new threat from Alibaba in coffee shops, though many of the dozens of smaller coffee chains that have set up shop in China these last few years might take note. Likewise, Hong Kong’s incumbent electronic payments service, Octopus, probably doesn’t need to worry just yet either. Read Full Post…

RETAIL: KFC Sues Rumor Mongers, Coffee Shows Stress Signs

Bottom line: Caffebene could become the first big victim of an unsustainable Chinese coffee explosion, while KFC’s new lawsuit against rumor mongers reflects one of the many challenges it will face as it tries to rebuild its China image.

Caffebene China chief quits

A couple of new China fast-food headlines reflect the rapidly changing environment, as traditional players like KFC (NSYE: YUM) try to move upscale to attract consumers who now have many more choices than they did a decade ago. The upscale move has seen a massive explosion in premium coffee shops, which is behind one headline that has South Korean giant Caffebene showing signs of distress following its recent aggressive China expansion.

Meantime, the other more humorous headline has KFC suing 3 companies for spreading false rumors about its products on social media, including one saying it uses chickens that have 8 legs. On a more serious note, this story comes as KFC struggles to regain its skidding China momentum, and shows that Beijing isn’t the only one frustrated over the kind of rumor-mongering that regularly happens on popular services like Weibo (Nasdaq: WB) and Tencent’s (HKEx: 700) WeChat. Read Full Post…

CONSUMER: Chocolate Aims To Track China’s Coffee Boom

Bottom line: China’s chocolate market could follow the recent boom for coffee as a lifestyle product, benefiting foreign names like Nestle, Hershey and Dove that can tap the preference for premium brands.

Nestle, Hershey seek success in upscale chocolate

A couple of chocolate stories were in the headlines over the Lunar New Year holiday, spotlighting the big potential for the foreign treat to boom in a similar way that coffee has over the last few years. One story had Swiss giant Nestle (Zurich: NESN) saying it will look to chocolate and premium coffee to boost its stagnating China sales. The other had US chocolate giant Hershey (NYSE: HSY) also predicting strong growth for the China market, following its own recent local acquisition. Read Full Post…

RETAIL: Bun Seller Gubuli Tries Coffee, Carrefour Weighs Sale

Bottom line: Gubuli’s foray into the coffee business is doomed to failure, while Carrefour is likely to sell part of its China business to a local partner later this year.

Gobuli tries coffee with Gloria Jean’s

You know the China coffee market is overheated when one of the nation’s most famous names in a traditional food like steamed buns enters the market. That’s what’s happening now, with word that Gobuli Group, a restaurant chain whose name is synonymous with a popular kind of meat-filled steamed buns, is launching a coffee chain joint venture in partnership with Australia’s Retail Food Group.

While the coffee business is quickly overheating, the opposite is true for the traditional supermarket business, which has seen several major western retailers leave the market or scale back operations as they face a growing challenge from e-commerce. Now it looks like French giant Carrefour (Paris: CA) could become the next in that trend, with word that it might consider selling some or all of its China business to a local partner. Read Full Post…

RETAIL: KFC Coffee Plan Takes Upscale Shot At McDonald’s

Bottom line: KFC’s plan to roll-out a low-cost premium coffee product looks like part of its broader plan to move its restaurants upscale, and could help it regain some momentum it has lost in China over the last 3 years.

KFC eyes low-cost premium coffee

It’s been nearly a year since struggling fast food giant KFC (NYSE: YUM) announced a much-needed overhaul for its China restaurants, and now we’re finally getting some details of changes to come with word of an interesting new plan to go upscale that takes aim at McDonald’s (NYSE: MCD). The new plan centers on coffee, with KFC aiming to find a new place at the low end of the premium market.

The move looks smart, since coffee has emerged as a hot and trendy product over the last couple of years in China. It also spotlights the fact that the fast-food market may be close to saturation in China’s largest cities. That means that KFC, McDonald’s and other large operators may be entering a new phase of their development where China looks more like the mature western markets where they are based, and they need to be more innovative to keep growing. Read Full Post…

Shanghai Street View: Coffee Craze

Coffee craze percolates through Shanghai

A new report on Starbucks (Nasdaq: SBUX) plans to accelerate its China expansion made me realize just how overheated Shanghai has become with a recent explosion in new coffee shops. In the last 6 months alone, at least a dozen trendy new shops have opened within easy walking distance of my home in an up-and-coming area of the Hongkou District, including 3 or 4 of those by Starbucks itself. Read Full Post…

Starbucks Prices: Tempest In A Coffee Pot

Starbucks under scrutiny for high coffee prices

Chinese media are finally discovering something that I’ve know all along, namely that Starbucks (Nasdaq: SBUX) coffee here is ridiculously overpriced. Some might say a new investigative report from national broadcaster CCTV could be cause for alarm for Starbucks, as previous similar reports have spelled headaches for other big foreign names like Apple (Nasdaq: AAPL), KFC (NYSE: YUM) and McDonalds (NYSE: MCD). But in this case, I’m actually quite encouraged to see the story is actually sparking some healthy and relatively well-informed debate about free markets and the premiums that “luxury” brands should be able to charge for their products. Read Full Post…