每日跟讀#599: Viewing China through the coffee cup

Once acclaimed as a “Starbucks destroyer” and “superpower brand,” Chinese start-up Luckin Coffee has, within the short space of one year, opened almost as many outlets as its American rival, which entered the Chinese market nearly two decades ago. However, Luckin Coffee has, in the process of this rapid expansion, burnt through more than NT$14bn (approximately US$454m) in capital. Recently it was revealed that the company has been using the coffee machines within its stores as collateral for loans. The company has begun to be dubbed “Unlucky Luckin” with some saying the coffee chain has already reached the end of the road. Starbucks isn’t doing much better though, achieving only 1 percent growth in sales in China during the first quarter of this year — compared with the global average of 4 percent — and the company’s annual growth rate in the Americas.

曾被追捧為可打敗星巴克的「強國品牌」瑞幸咖啡，短短一年，據點數雖直逼進軍中國近二十年的星巴克，但燒掉逾新台幣一百四十億元資金後，近來遭踢爆拿咖啡機等設備當抵押擔保，被形容是「瑞幸不幸、山窮水盡」；而星巴克也好不到那裡去，其二○一九財政年度第一季中國銷售額僅微增百分之一，不如全球平均值與美洲的年增百分之四。

The US has Google and IBM, while China has created Baidu and Lenovo. However, not only has Luckin Coffee failed to supplant Starbucks, it may also become the next Ofo, a Chinese bike sharing company currently teetering on the edge of bankruptcy.

美國有Google、中國就該有百度，美國有IBM、中國就有聯想，但瑞幸不僅無法取代星巴克，反可能成為下一個ofo（瀕臨破產的中國共享單車品牌）。

If one inspects the financial numbers, Luckin Coffee appears to be China’s newest “lame unicorn.” In the third quarter of last year, the company racked up a net loss of 850m yuan. In the final quarter, it hemorrhaged a further 700m yuan. Chinese media has reported that if one disregards sales costs and focuses just on rent, wage and raw material costs, it is possible to calculate that each cup of coffee costs the company at least 10 yuan to make, while sales revenue estimates show that the company is selling coffee at an average price of only 8.3 yuan per cup. This means that the faster Luckin Coffee opens new stores and the more coffee that it sells, the greater its losses will become. If Luckin Coffee is unable to attract sufficient revenue to cover its losses, the company will eventually run out of road.

從財務數字來看，瑞幸已是中國新一隻跛腳的獨角獸。瑞幸去年前三季淨虧人民幣八點五億元、最後一季大虧逾人民幣七億元；依中媒報導，不計行銷成本，光店租、薪資及原材料等推算，瑞幸一杯咖啡成本至少十元，但從銷售收入估算，平均一杯僅賣八點三元，也就是瑞幸開店速度越快、賣越多，就賠越大，假如吸金趕不上失血速度，瑞幸真得要山窮水盡。

The US-China trade war has been rumbling on for over a year. US President Donald Trump is closing in on victory while Chinese President Xi Jinping is beating a retreat. From this coffee example, we can see that the trade war has degraded China’s consumer buying power. Chinese citizens originally began drinking fewer cups of Starbucks coffee, switching to the more affordable Luckin Coffee. As China’s investment-led bubble economy wanes, Luckin Coffee and other Chinese unicorns are falling by the wayside and are between themselves creating a vicious cycle for China’s economy.

美中貿易戰打了一年多，美國總統川普節節進逼、中共領導人習近平步步退守。從一杯咖啡看中國，貿易戰打到中國消費降級，少喝星巴克改買瑞幸，但資金泡沫退潮，瑞幸等獨角獸不支倒地，彼此間已形成經濟的惡性循環。

Source article: http://www.taipeitimes.com/News/lang/archives/2019/04/16/2003713441