Research on the Product Pricing Strategies of Luckin Coffee

Guangzhou New Channel-Zengcheng Experimental Middle School, 5113005, Guangzhou, China

^* Corresponding author: 200208@yzpc.edu.cn

Abstract

With the rapid growth of the Chinese coffee market over the past few decades, a number of excellent coffee brands have emerged, and market competition is becoming increasingly fierce. Understanding the pricing strategies of major players becomes crucial, especially for new brands entering the market. This paper discusses the pricing strategies Luckin Coffee adopted, the cost analysis of its products in the competitive coffee market in China, and its pricing strategies. According to the combination of qualitative and quantitative analysis, the result shows that Luckin Coffee uses a unique pricing strategy that is relatively cheaper than other brands. This is essential for attracting young and price-sensitive consumer groups. By introducing frequent discounts, Luckin Coffee successfully differentiates itself from other traditional coffee chains, thus enlarging its market share at a dramatic speed. This paper also points out the challenges Luckin Coffee faces when it offers competitive prices while remaining profitable, and how its innovative business model helps it ease this problem.