Time Prediction
Yesterday, I mentioned a ‘fear of missing out’ survey.
And then, a few hours later, I read a blog post from Collaborative Fund disclosing it has financially backed Magic Spoon:
What’s Magic Spoon, you ask?
Well, I certainly asked.
Magic Spoon is cereal:
High protein. Low carbohydrates. Low sugar. Gluten-free. Grain-free. No artificial preservatives.
But still, it is just cereal.
And yet, one Instagram post later, I was paying almost $40 for four normal-sized variety boxes.
Maybe I had succumbed to FOMO against my better instincts.
But also yesterday, I listened to The Motley Fool’s Industry Focus podcast, which discussed the Chinese coffee company, Luckin ($LK):
“Luckin hopes to buck that trend and challenge Starbucks as the reigning king of a tea-drinking country that only relatively recently discovered the joys of java. Starbucks, the Seattle-based coffee chain, holds just over half of the Chinese coffee and specialty tea market, according to Euromonitor International, a market research provider. By the end of 2018, Luckin held just over 2% of the market, according to Euromonitor estimates.
But the growth opportunities are huge. In just four years, China’s specialty tea and the coffee market has grown from $2.7 billion in revenues to $4.8 billion, Euromonitor says. The market is still diffuse, as well. The next-biggest competitor to Starbucks, the McDonald’s-owned McCafe, has just 5% of the market.
Luckin has grown rapidly since its founding in late 2017. It was begun by the entrepreneur Jenny Qian Zhiya and has been backed by several investment firms in China, the United States, and Singapore, including BlackRock. It plans to increase its storefronts to have the largest coffee chain network in China by the end of this year. That would catapult it past Starbucks, which has 3,600 stores in China.”
Considering that I’m about to listen to an artificial intelligence talk at Uber, I don’t feel like promoting Luckin as the Second Coming of Starbucks ($SBUX), especially given how much money the young company is burning.
But the Chinese market is huge since it is obviously the most heavily populated.
Not every tea drinker will convert to coffee, though a good amount of them will try it out.
Maybe some Chinese consumers will enjoy the taste of Luckin and then level up to Starbucks.
Outside of North America, I had no idea how much coffee those living in the Nordic countries drank, but it’s a lot.
Geography notwithstanding, it is an addictive product though I can’t believe that people would wait for half-an-hour for a coffee delivery:
“Luckin Coffee’s strategy is different.
A typical store consists of a counter, a couple of coffee makers, a few bar stools and a couple of baristas. It serves coffee and coffee drinks — Americanos, lattes, Macchiatos, flat whites — along with a variety of tea drinks, light lunch fare such as salad, noodles, and wraps as well as snacks.
But don’t expect to eat in. Luckin mainly operates through pickup and delivery models. (Starbucks, by contrast, didn’t launch a delivery service until last September).
Orders have to be placed through Luckin’s mobile app instead of third-party food delivery platforms such as Meituan and Ele.me (the Chinese equivalent of UberEats and GrubHub). Over 355 million Chinese ordered food through these apps in 2018, according to iiMedia Research: a Chinese third-party data mining and analysis organization.
Customers choose a store near them, click either ‘pick up’ or ‘delivery,’ order a coffee and pay online. For pickup customers, a text message is sent when the coffee’s done — which usually takes three minutes. Otherwise, a cup of hot, freshly made coffee is delivered in about half an hour.”
Coincidentally, the Uber Eats talk is starting and the topic is ‘time prediction.’
