Luckin Coffee(US:LKNCY) Qian Zhan Wang·2026-02-04 03:14Core Viewpoint - Kudi Coffee is ending its "all items at 9.9 yuan" promotion, which has sparked significant discussion on social media, indicating a shift in its pricing strategy and the broader coffee market dynamics [2][9]. Group 1: Pricing Strategy and Market Impact - Kudi Coffee initiated a price war by offering coffee at 9.9 yuan, which was later reduced to 8.8 yuan, leading to rapid market expansion with over 18,000 stores globally within two years [2]. - The price war prompted competitors like Luckin Coffee to adopt similar pricing strategies, resulting in a 30% reduction in beverage prices across the industry, affecting brands like Starbucks and CoCo [2][3]. - The initial low-price strategy aimed to capture market share and reshape consumer perceptions of coffee from a luxury item to a daily beverage, successfully attracting price-sensitive customers [3]. Group 2: Competitive Landscape and Consumer Behavior - The price competition has significantly impacted Starbucks in China, leading to consecutive quarters of declining same-store sales as consumer expectations shifted regarding coffee pricing [3][4]. - Younger consumers, particularly from the 90s and Z generations, prioritize cost-effectiveness and convenience, favoring brands like Kudi and Luckin that utilize digital platforms for ordering and delivery [4]. - The generational shift in consumer preferences poses a challenge for Starbucks, which has traditionally relied on its premium brand image and social space attributes [4]. Group 3: Future Market Trends - Kudi Coffee's decision to end the 9.9 yuan promotion reflects a strategic pivot towards focusing on quality, service, and brand strength rather than solely competing on price [9]. - The coffee market is expected to transition from price competition to a focus on overall brand value and customer experience, as evidenced by the changing dynamics in consumer preferences and market strategies [9]. - The rapid expansion of domestic coffee brands like Kudi and Luckin, established after 2015, contrasts with older foreign brands, indicating a significant shift in market dynamics and consumer engagement [5].