Aiming to sell a cup of coffee to drivers waiting for petrol or diesel to be pumped into their vehicles, the first EasyJet Coffee shop opened last week in Suzhou, brewing three varieties of coffee named, interestingly, after the gasoline types of 92-RON, 95-RON and 98-RON offered by Sinopec.
Drivers can even pre-order and collect their coffees from the gas stations if they are within two kilometres, as part of Sinopec’s integrated customer service plan. Though a brand under Sinopec, EasyJet Coffee’s operations are provided by Coffee Box, responsible for building software, developing products and conducting training. Sinopec Easy Joy Sales Co (a chain-store subsidiary of Sinopec) takes care of branding and retail facilities.
EasyJet Coffee is considered an important entry point for Sinopec in the non-oil sector and expected to enhance Sinopec’s vision of creating a ‘new retail’ ecosystem. In fact, Sinopec has been eyeing the coffee industry for some time due to profitability of coffee drinks. At the end of last year, Sinopec, partnering with Luckin Coffee, had opened a ‘shop-in-a-shop’ of about 10 square meters in Hangzhou.
In China, brand extensions into the coffee business are not new. Earlier examples include McDonald's in 2010 opening 65 McCafé independent coffee shops, and KFC starting a new product line K Coffee in 2016, alongside the rise of a new generation of consumers, the growth of spending power, and the acceptance of coffee as an alternative to the tea staple.
Clever brand extension deals are helping marketers reach new customers in unlikely places. However, there are always rewards as well as risks, and damaging the core brand ultimately should be the primary concern for brand managers. (For more, read WARC’s How to extend a brand for the best practices involved in extending a brand beyond its original core product).
Sourced from Sinopec; additional content by WARC Staff