So Hong Kong is lucky, here comes Luckin Coffee
By HK Lawyer AJ Halkes Barrister-at-Law
So Hong Kong is lucky, here comes Luckin Coffee. Will they be all over the city in a flash? Will we soon have 100 of them? I am interested in what level of dilution this creates for other coffee options that have been reasonably profitable until now.
There is a bakery directly underneath the site in the photo, and it does very good business in coffee. Are these completely different sectors, meaning no real damage to each other, or is there an unavoidable trade-off for one the moment you have multiple coffee options within the same sight line?
Having seen the landscape in Shenzhen, where I saw three coffee shops directly next to each other, I struggle to understand how a row of different coffee shops, mainstream by the way and not artisan or highly specific, can all make economic sense.
In any event, we first had the udon craze, then the Korean food wave, and now it appears the coffee surge is building momentum to the point where we may soon be saturated with coffee options, as if we are not already.
Will this render what marginal business operations in the coffee area unviable? Will a category killer emerge? And will the removal of some empty shop space at least reconfigure areas and boost the vibe as business traffic and footfall increase? Probably all of the above.
So far, we are in luck, because in the short term, if not the long term, Luckin has landed in Hong Kong; and as Singapore apparently has about 60 of them, the target for Hong Kong on that metric may be one hundred here. That’s 100 leases, and a lot of jobs!
If you need specific input regarding a strategic Hong Kong challenge or related legal matters in the HKSAR, you can always DM me and check out my profile at https://www.ajhalkes.com
HongKong RetailTrends hashtagCoffeeBusiness FandB CommercialProperty MarketSaturation UrbanEconomics RetailStrategy HongKongBusiness AsiaMarkets
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