Luckin Coffee, a prominent coffee chain in China, recently brewed up a storm with its new offering: an alcohol-infused latte in collaboration with Kweichow Moutai, China’s national liquor brand. On the first day of its launch, Luckin reported selling a staggering 5.42 million cups of this unique latte, setting a new sales record for the company. The sales of this single item reached 100 million yuan (approximately $13.72 million), surpassing previous popular launches like the cheese latte and the coconut cloud latte.
This “sauce-flavoured latte,” priced at 38 yuan (around $5.23), was offered at a discounted price of 19 yuan on its debut day. The drink became an instant sensation on Chinese social media, selling out in numerous stores in major cities like Beijing and Shanghai within hours. For those curious about the alcohol content, the latte contains less than 0.5% alcohol by volume. Moutai, the collaborating brand, is a strong spirit typically served at Chinese banquets.
For our budding economists and business enthusiasts, this event underscores the power of innovative product collaborations and the importance of understanding consumer trends. Companies can achieve significant success by tapping into popular culture and combining strengths with other brands. It’s a lesson in market dynamics, consumer behavior, and the potential of strategic partnerships.
THINK LIKE AN ECONOMIST!
Q1. Define the term consumer trend.
Q2. Explain how and why Luckin adapted their product to appeal to a particular market.
Q3. Research some other examples of companies adapting their product to appeal to a particular market.
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