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Business Wars

Starbucks vs Dunkin - Luckin: China’s Coffee Dark Horse | 7

Business Wars

Wondery

History, Business, David Brown, Management

4.613.2K Ratings

🗓️ 23 March 2020

⏱️ 27 minutes

🧾️ Download transcript

Summary

There’s no doubt that Starbucks and Dunkin Donuts have created empires throughout the U.S. and internationally. Starbucks has more than 15,000 locations in the U.S. alone, and Dunkin Donuts is now in 43 countries. But there could be yet ANOTHER brewing business that’s raring to make a dent in Starbucks’ customer base.


Hailing from China, that new competitor is Luckin Coffee, marketing itself as the convenient gourmet coffee choice, with a lower price point than Starbucks. Sounds a bit like Dunkin’s strategy, right? And in May of 2019, the Chinese coffee giant made its initial public offering in New York.


So could Luckin be on its way to the U.S.? And if so, should Starbucks prepare for its next “Business War” with Luckin here on American soil?


For some answers, our host David Brown chats with market strategist Judy Ganes. Ganes is president of J Ganes Consulting where she focuses on products such as sugar, cocoa, and of course, coffee. 


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Transcript

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0:00.0

Hey, Prime members, you can listen to Business Wars Add Free on Amazon Music. Download the app today.

0:14.0

I'm David Brown and this is Business Wars.

0:31.0

Today we conclude our series, Starbucks vs. Duncan. No doubt both companies have created empires throughout the United States and internationally.

0:45.0

Starbucks has more than 15,000 locations in the US alone and Duncan Donuts is now in 43 countries.

0:53.0

But there could be yet another brewing business, raring to make a dent in Starbucks' customer base, hailing from China.

1:01.0

That new competitor is Luckin Coffee. The company's name is Anadu, yes, you guessed it, Luck or Happiness. Some nice word association for your cup of Joe.

1:11.0

Luckin has marketed itself as the convenient, gourmet coffee choice with a lower price point than Starbucks.

1:18.0

Sounds a bit like Duncan's strategy, right? And unlike Starbucks' European model of going to a coffee house and lingering for a bit, Luckin relies heavily on technology to build its customer base.

1:30.0

Patrons order through an app, then get their morning kick at a kiosk or buy a delivery within 30 minutes. And yes, there's a general issue with how hot coffee is when it's delivered just in case you were wondering.

1:43.0

In May of 2019, the Chinese coffee giant made its initial public offering in New York. But something to note here is that Luckin is in hot water.

1:53.0

The Chinese coffee giant is in the preliminary stages of an internal investigation. Luckin admitted to inflating its sales by about $310 million from the second quarter to the fourth quarter of last year.

2:05.0

Now you should note that when we taped this episode, that information had not been made public. But despite this news, we still wanted to know, is it possible Luckin's business model of convenience and lower prices?

2:17.0

Might ever be a competitor with Starbucks or Duncan. For some answers, our guest is market strategist Judy Gaines. Gaines is president of Jay Gaines Consulting, where she focuses on products like sugar, cocoa, and of course coffee. All that's coming up next.

2:34.0

Hello, I'm Hannah. And I'm Sirete. And we are the hosts of a Red Handed, a weekly true crime podcast.

2:48.0

Every week on Red Handed, we get stuck into the most talked about cases, from the Idaho student killings, the Delphi murders, and our recent rundown of the Murdoch saga.

2:57.0

Last year, we also started a second weekly show, Short Hand, which is just an excuse for us to talk about anything we find interesting because it's our show and we can do what we like.

3:05.0

We've covered the death of Princess Diana, an unholy Quran written in Saddam Hussein's blood, the gruesome history of European witch hunting, and the very uncomfortable phenomenon of genetic sexual attraction.

3:15.0

Whatever the case, we want to know what pushes people to the extremes of human behavior.

3:20.0

Like, can someone give consent to be cannibalized? What drives a child to kill? And what's the psychology of a terrorist?

3:27.0

Listen to Red Handed wherever you get your podcast. So, and access our bonus Short Hand episodes exclusively on Amazon Music, or by subscribing to Wondry Plus, in Apple Podcasts or the Wondry app.

3:50.0

This is a story about a young life caught in the middle of the justice system. Listen to Generation Y on Amazon Music, or wherever you get your podcasts.

4:00.0

Judy Gaines, welcome to Business Wars.

...

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