Li Ning eyes China’s coffee market

Sportswear brand Li Ning is planning to sell its own ‘Ning Coffee’ from its near-6,000 stores across China, according to media reports.

Why it matters

Those store numbers would put Ning Coffee on the same level as leading coffee chains like Starbucks and Luckin Coffee. But it’s unlikely to be competing on the same basis – it told the South China Morning Post it would be providing unspecified “coffee services” as it focused on “the consumer experience on the retail end”. Expect some innovation here. 

Background

• Li Ning’s application to register the ‘Ning Coffee’ trademark is currently being reviewed.
• Starbucks last week reported a 23% drop in comparable sales in China as the effects of COVID-19 restrictions hit its fiscal Q2 results (but CEO Howard Schultz still expects the China business will eventually be bigger than the US).
• Luckin Coffee, which only recently emerged from a bankruptcy order, has denied a suggestion it is planning an IPO in Hong Kong.

Key quote

“Li Ning … can use its existing network to offer an addition of a lifestyle experience for its consumers. This is a very different strategy versus starting a coffee chain” – Jason Yu, general manager of Kantar Worldpanel Greater China.

Sourced from South China Morning Post, Reuters, Caixin Global [Image: Getty]