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Columns Details

McCafe: McDonald launched its coffee delivery service in China

By ESC Editorial Team, over 5 years ago Business
McCafe: McDonald launched its coffee delivery service in China

The McCafe delivery service is available on WeChat Mini Programs and delivery platforms

On Oct 8, 2018, McDonald's McCafe launched the delivery service in Shanghai. Customers can place orders through delivery platforms such as "I McCafe Delivery", and Meituan. It offers a "free first cup" option for all users when they order their first cup of coffee, which is equivalent to the Luckin Coffee promotion model in China. In the future, McCafe will be available in more cities.

[Luckin Coffe: Luckin Coffee is known as a “new-retail” Chinese coffee upstart, which enables users to purchase coffee via app and choose later pickup or direct delivery. It announced the partnership with Tencent in September, 2018]

The McCafe delivery service has two highlights: to ensure a coffee temperature of 65 to 70°C, the delivery time is 28 minutes, which is 2 minutes shorter than the delivery time of Starbucks. Electronic coupons are offered to compensate for deliveries after that time. The cup’s packaging uses a high-tech patent technology to prevent spillage and leakage during transport.


* Special delivery cups with a patent number


*McCafe e-store on delivery platforms

Compared to third-party platforms, the "I McCafe Delivery" Mini Program offers three benefits to its customers. First, it offers a free delivery coupon for a large cup of Latte when users enter the site. After the payment, it provides an exclusive benefit bag that users can share with friends. Second, it has a feature that allows you to book the desired delivery time, also provided by McDelivery. Third, you will receive a membership bonus after completing the order.

The strength of McCafe Delivery over competitors

According to China’s 2017 report on the coffee industry, China’s annual coffee consumption per capita is less than 5 cups, and the data the first tier cities is 20 cups. The data from Japan and South Korea in this regard exceed 300 cups each, although people in both countries drink as much as the Chinese. The coffee consumption data of these two countries have made every brand aware of the infinite potential of the Chinese coffee market. Therefore, many coffee brands have recently penetrated deeper into this market in China.

On August 2, Starbucks and Alibaba announced their strategic cooperation and jointly launched the coffee delivery service on Together with Hema Fresh, they also co-founded the first brand delivery kitchen "Delivery Star Kitchen". Pai Coffee of the Family convenience store uses a low price (about 10 CNY) to enter the market by joining the platform. Coffee Box and Luckin Coffee also try to grab a market share through the internet.

As early as September 2015, McCafe partnered with Baidu Delivery. At that time, Baidu Delivery was established to serve the office market in the city with high quality. Meanwhile, 80% of McCafe’s revenue came from first-tier cities, and its audience was highly consistent with Baidu Delivery users. Baidu and McCafe worked together to increase the need for afternoon tea. Prior to the current wave of coffee delivery, McCafe already had the experience of independent brands in the delivery service.

By 2013, McCafe had more than 700 stores, close to the numbers of Starbucks stores in China. Compared to Starbucks’ fast pace of branch expansion, McCafe’s has slowed down. Although MacDonald’s McCafe has been cultivating the Chinese market for more than 10 years with a professional delivery experience and good coffee quality, in the eyes of the Chinese customer it is still the “café in the fast food restaurant”.

McCafe plans to change its reputation as a “café in the fast food restaurant”, with lower prices than Starbucks and market expansion through its experienced delivery service. The advantages of specialized high-tech delivery cups, fast and stable service and a dense store layout enable McCafe to establish a new image in the delivery market that will be relatively independent of the McDonald business. 

Facing the new rivals in age of the Internet, McCafe could go to extra lengths to think about how to leverage the McDonald's brand and increase McCafe’s creativity and appeal.

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