Luckin Coffee "sneak attack" on Bawang Tea Princess

The battle of new tea beverages has reignited. Luckin Coffee has launched "Light Jasmine" in a surprise move, aiming directly at Bawang Chaji's star product Boya Juexian. This light milk tea quickly gained market attention with its low-price strategy, with sales exceeding 10 million cups. Although both sides were evenly matched in taste evaluation, Luckin Coffee's "tea coffee" ambitions are clearly revealed, and the boundaries of the new tea beverage industry are becoming increasingly blurred. The "tea coffee" battle between Bawang Chaji and Luckin Coffee may become a new turning point in the industry.

The seasonal meme "The first cup of milk tea in autumn" has entered its fourth year. In these four years, new tea drinks have changed rapidly, the throne has changed hands, and even an "uninvited guest" has appeared.

Not long ago, Luckin Coffee launched a milk tea with a blue and white printed packaging and a jasmine tea base, called "Light Jasmine". According to the introduction, the calories in this cup of milk tea are about equal to 1.5 apples. A week later, the sales of this light milk tea product exceeded 11 million cups, and it has a tendency to become a hot product.

But this tea drink, whether in terms of appearance, taste or health label, can't help but remind people of this year's rising star in the milk tea industry - Overlord Tea Princess.

Some netizens said that "this is a 1:1 pixel-level replica of Boya Juexian", but the price is a "parity" route - you can buy a cup of Qingqing Jasmine (473ml) for only 9.9 yuan, while Boya Juexian (500ml) is priced at 16 yuan.

Boya Juexian is as important to Bawang Chaji as Coconut Latte is to Luckin Coffee. Both are the star products and are long-lasting hits in the ready-made beverage industry. Luckin Coffee’s high-profile entry into the milk tea market and its re-creation of Boya Juexian is tantamount to a direct declaration of war against Bawang Chaji.

Some people predicted several years ago that there would be a war between Tea and Coffee. After many years, this damn war not only failed to make peace, but was even more chaotic and prolonged than expected.

1. True or False "Tea Princess"

After Qingqing Jasmine was launched on the market, Hedgehog Commune held a "True and False Boya Juexian Tea Appreciation Conference" to appreciate the difference in taste between the two.

First, hide the packaging of Qingqing Jasmine and Boya Juexian, and pour them into 20 disposable paper cups prepared in advance, half numbered 1 and half numbered 2. After the compilation, invite 10 judges to taste it, guess blindly which cup is the real Boya Juexian, and then vote for the cup they think tastes better.

Here is a disclaimer:
Both milk teas were ordered from a food delivery platform, and both were low in ice and sugar. However, due to different delivery times, there may be differences in taste, so this review does not constitute any professional opinion and is for entertainment purposes only. If you have different opinions, please agree to disagree.

After a round of tasting, everyone thought it was a blind guessing game without any suspense, but the result was reversed. One-third of the people on the scene failed to guess blindly and "mistakenly" chose Boya Juexian. In terms of taste, Luckin and Bawang Tea Princess tied in the Hedgehog Commune editorial department, and each cup of milk tea received the support of half of the judges.

Even a loyal fan of "a cup of Bawang Cha Ji every day" was upset. After the answer was announced, he said bluntly: "I actually think Luckin Coffee tastes better." Another judge who strictly controls sugar and rarely drinks milk tea said what was in his heart: "I thought that Bawang Cha Ji's tea and milk would be better, but it seems that only the sweetness is more obvious."

However, people with higher sugar tolerance also have clear likes and dislikes, and their evaluations are gradually becoming polarized.

The tasting session immediately broke into a war of words. The last time there was such a heated argument was when the box office of Spring Festival movies was being predicted.

Some people say that Jasmine is as bland as Tea Queen in Paris. Those who disagreed responded that Jasmine has a mild and mellow taste, while Boya Juexian has a plastic feel, like a "slutty bitch".

Some people say that the taste of Boya Juexian is like milk tea, while Qingqing Jasmine has no tea flavor but only "milk powder" flavor. Someone immediately refuted that Luckin's jasmine taste is obviously stronger and fresher.

In the end, everyone reached a consensus that those who like light taste will like Luckin's light milk tea, while those who like sweet or strong taste will prefer Boya Juexian.

On social media, some consumers expressed their pessimism about Luckin Coffee making milk tea, while others drank light milk tea for a week and became more and more addicted. This also proves that taste is the most personalized thing for everyone, and it is difficult to satisfy everyone.

In terms of product flavor differences and public acceptance, Luckin Coffee is not without space and market opportunities in the tea beverage business. Once Luckin Coffee starts making tea beverages, the life of the Overlord Tea Princess, who is like the protagonist of a cool novel, will also face new powerful enemies.

At this point, some people may inevitably feel confused. Luckin Coffee and Bawang Cha Ji are rarely mentioned in the same breath in the industry. The two are in different tracks, have different audiences, and have different price ranges. Why do they have to compete with each other?

2. Attack or defend?

Before entering the new tea beverage market, Luckin Coffee and Bawang Chaji had already begun to have an undercurrent. They are both like-minded people with common ideals and absolute competitors.

A year ago, Luckin Coffee’s revenue in the Chinese market officially surpassed Starbucks China. In May of this year, Zhang Junjie, founder and CEO of Bawang Tea Princess, also loudly announced the “small goal of surpassing Starbucks China’s sales in 2024,” revealing his ambition to become the “Starbucks of the East.”

The tacit understanding between Luckin Coffee and Bawang Tea goes far beyond this. They also have a common goal - to make the boundary between tea and coffee increasingly blurred.

Many consumers said that drinking Bawang Cha Ji caused palpitations and insomnia, and they could not sleep all night. Some time ago, when Bawang Cha Ji's new product "Wanli Mulan" was launched, this voice became more and more intense, and some people even used "Wanli Mulan" instead of coffee. A third-party agency tested that the caffeine content of a cup of "Wanli Mulan" is equivalent to that of a cup of latte.

Whether Bawang Cha Ji did it intentionally or unintentionally, the industry and consumers have seen that "replacing coffee with milk tea" is not without opportunities.

Why do some consumers choose milk tea instead of coffee when they want to refresh themselves? A media worker answered: "Coffee is too bitter, which makes me feel that my life is bitter too." Although it was a joke, it also expressed the voice of some "malos" - when milk tea and coffee have the same effect, consumers who have no special preference for coffee will give priority to milk tea based on taste.

From daily life to drinks, young people today no longer want to “eat without bitterness.” Industry insider Jianshan told Hedgehog Community: “The popularity of coffee in China is largely due to the background of ‘coffee-milk tea’.”

Luckin Coffee discovered the judgment that "young people no longer want to suffer" earlier and implemented it more thoroughly. Since consumers have a low tolerance threshold for the bitterness and sourness of classic coffee, Luckin Coffee has always taken the "milky coffee" route and created many star products such as raw coconut latte and velvet latte.

In the spring of 2023, after launching a series of hit milk coffee products, Luckin Coffee turned its attention to "tea coffee". The sales of a Biluo Zhichun latte exceeded 4.47 million cups in the first week, and the subsequent Lanyun Tieguanyin latte also achieved a hot sales record of over 6.25 million cups in 7 days. To date, Luckin Coffee is still continuing to improve its "Chinese tea coffee" product line.

Coffee drinking scenarios are somewhat limited. Most students and white-collar workers use it to refresh themselves and reduce swelling while studying or working, and usually buy it in the early morning or in the morning. In contrast, milk tea has a larger consumer group and more diverse scenarios. Luckin's new slogan "Morning coffee and afternoon tea" on outdoor advertisements and elevator TV advertisements that can be seen everywhere shows Luckin's ambition to cover "all time periods" and "all scenarios."

After accumulating years of experience in milk coffee and tea coffee, Luckin has also forged its own methodology for selling blockbuster products.

At this point, making milk tea seems to have become a side business, especially this kind of highly standardized light milk tea without toppings and fruits. It is nothing more than adding an automated production line, and store employees only need to press buttons on the customized equipment.

Of course, Luckin Coffee has the confidence to do so. Not only will its full-year revenue in 2023 exceed that of Starbucks China, its current stock price has also rebounded 20 times, from the bottom of US$0.95 to more than US$20, which is on par with the price when it went public.

Today, Luckin Coffee has passed the most difficult waters and has reached the critical moment of finding its second growth curve.

In 2019, Luckin launched its sub-brand Xiaolu Tea. Whether there is Bawang Cha Ji in the industry or not, Luckin will take the step of "returning to tea" sooner or later. The rise of Bawang Cha Ji just strengthened Luckin's determination to make tea and accelerated the implementation of this decision.

3. Chinese people love oriental tea

If we look at it from another angle, is it possible for Bawang Cha Ji to enter the coffee world and defend her territory with the attitude of Kung Fu?

Let’s take a look at the survival status of our predecessors. After all, it is not new for milk tea brands to sell coffee. Mixue Bingcheng, Chayan Yuese, Lelecha, Heytea, Nayuki’s Tea, Chabaidao, Shanghai Auntie, Guming and other milk tea brands have already added coffee to their portfolio.

Among them, Mixue Ice City, which entered the market the earliest, is also a relatively successful one. In 2017, Mixue Ice City founded the coffee chain brand "Lucky Coffee". After so many years, the market performance of Lucky Coffee can only be described as mixed.

The good news is that Lucky Coffee's nationwide stores have exceeded 2,900 in 2024, and it is making an impact towards the 3,000+ club; but in terms of taste or service, Lucky Coffee has not built a reputation like Snow King, especially without any representative blockbuster products, and therefore does not have much competitiveness in the coffee market.

Image source: Xiaohongshu official account @幸运咖

Originally, Lucky Coffee had a certain price advantage in third- and fourth-tier cities, but in the past two years, affected by the price war between Kudi and Luckin Coffee, Lucky Coffee has also been impacted and is called the "disappearing third" by industry insiders. Because Lucky Coffee has not only robbed consumers, but also franchisees from low-tier cities. With so many brands, franchisees in counties and even towns are not enough.

Other predecessors also had a hard time. In November last year, Heytea's new tea and coffee brand "Xi Que Ka" was launched in Shenzhen. However, this month, some consumers found that Xi Que Ka had closed down. According to "Tea and Coffee Observation", Xi Que Ka should have closed down in late July this year. In addition, the coffee sub-brands created by other milk tea brands have not made any splashes.

Why do milk tea brands often fail when they try to make coffee?

First, the rigidity of user mindsets is a key obstacle. There is no shortage of coffee brands with different positioning in the market, whether they are niche boutiques or affordable chains. This also makes it difficult for consumers to have a strong desire to buy coffee products launched by milk tea brands, and it is also difficult to establish new brand loyalty.

Secondly, the complexity and high cost of the coffee bean supply chain cannot be ignored. Compared with tea, the planting, processing, and transportation of coffee beans are more complicated, and high-quality coffee beans are mostly imported, which increases the difficulty and cost of supply chain management. If milk tea brands want to gain a foothold in the coffee field, they must face and solve these supply chain challenges, otherwise it will be difficult to ensure the quality and competitiveness of their products.

The most fundamental reason may lie in the differences in culture and eating habits. The story that tea can tell in the East is far greater than that of coffee beans.

Our taste buds can better distinguish jasmine green tea, Phoenix Dancong or Dahongpao, but the recognition of coffee flavor may only stay at bitterness and sourness. Of course, Chinese stomachs also prefer oriental tea, which is more moderate and peaceful, less irritating than coffee, and rarely causes gastrointestinal discomfort.

Perhaps, in the future, competition in ready-made beverages will revolve around the "tea base", and "tea" will become the deciding factor in the battle between tea and coffee. When the boundaries between tea and coffee become blurred, new tea drinks will also move from a stable era to a chaotic era.