E97 – The Impulso Podcast – US election, Xi meets Modi, Luckin prepares U.S. takeover

Trump returns to the White House, Mr Modi meets President Xi in Russia. Are businesses ready to survive a world of shifting alliances and tariff threats?

Back by popular requests, we’re re-introducing our weekly recap format in this episode as we dive into the latest economic and political developments reshaping business strategies across borders. As the world watches the U.S. elections, many companies globally, especially cross-border businesses in Asia, are already making bold moves to adapt—with some even setting up shop in Paraguay to avoid potential tariffs.

We also discuss the evolving coffee landscape, including Luckin Coffee’s and Cotti Coffee’s ambitious expansion plans. Where does incumbent Starbucks stand amidst this intensifying competition?

Tune in as we weigh in on operational differences, consumer behaviour, and brand strategies of coffee giants globally.

Also available on Spotify and Apple Podcast

Featured materials:
Foreign investors fear India’s stock market boom may be over, Financial Times
Why Starbucks ousted 3rd chosen successor of Howard Schulz, Momentum Works Impulso Podcast, E88
China’s largest coffee chain plans to take on Starbucks in US, Financial Times
Luckin Coffee Q3 2024 Quarterly report
Starbucks Reports Q4 and Full Fiscal Year 2024 Results
Cotti Coffee opens 10,000th store, aiming for another 40,000 in 2025, Momentum Works, The Low Down
Temu to allow local sellers in Europe and US from March 2024, Momentum Works, The Low Down
Temu: 2 years on, Momentum Works
SM Lee Hsien Loong at the FutureChina Global Forum 2024, Youtube

 

[AI-generated transcript]
Sabrina: [00:00:00] Hello everyone, and welcome to episode 97 of the Impulsive Podcast by Momentum Works. So, on this week’s episode, we’re going to do something a little different. So, those of you who have watched us for a while, you know that we used to do kind of like weekly commentaries, weekly recaps, and today, we’re going to do something a little different.

Sabrina: People have been requesting that we bring it back so that we can cover a wider range of more recent topics, don’t worry, we will still do in depth episodes, but we’ve also just decided to bring back the weekly commentaries so that we have a little more up to date podcast, right?

Sabrina: So, for the first topic of today, 

Jianggan: As we are recording this, it’s the, 6th of November, around lunchtime. Everybody’s eagerly waiting for the final results of the U. S. elections. The last time we checked, which was two minutes ago, it’s tilting towards a certain candidate, right?

Jianggan: And I think by the time you watch this, hopefully the election results will be fully out. I mean, for me it feels like we have been like watching reality show for the last year, six month, eight months. It was a long time. And, every other day, somebody’s asking Hey, um, who do you think would win the US election?

Jianggan: [00:01:00] Um, my answer is that I don’t know. 

Sabrina: We will know soon. 

Jianggan: Yeah, I think by the time you watch it, hopefully that you already know. I think the issue like for lots of people, especially for us in Asia, is that, we are in a world where lots of things are happening and there are lots of risks and there are lots of like uncertainties.

Jianggan: I was having a reunion with my MBA classmates after 10 years, and people were saying that, oh, when we graduated in 2013, everybody was talking about globalization. Nobody talks about that anymore. I think the world is very different. Regardless, I mean, people, people need to live on, right? So it’s, I think it’s just like when people ask us, how do you think about the state of economy in China?

Jianggan: So, of course, I mean, But, um, but many people, I mean, they have businesses around. They have people to, on their payroll, and they have responsibilities to make, so people find ways to adjust to reality. I’m not sure if you watched that interview with Lee Hsien Loong. So somebody asked him a question. I mean, how does he see [00:02:00] the geopolitics if Trump or Harris would be, uh, elected? I think his answers were along the lines of it probably doesn’t matter, right? History has said that there’s some big dynamics going on, and there’s lack of mutual trust

Jianggan: and regardless of who gets elected, I think the big direction is probably going towards a certain way. It’s just how that manifests, right? Whether it’s manifested in a slow, steady, sure way, or whether it’s manifested in a very turbulent way. The way we think about it.

Jianggan: We don’t know. And this few days I’ve had lots of discussions , with lots of the cross border sellers in China. And of course, everybody’s eagerly looking at the results because they fear about potential tariffs. Many people historically moved, their production to Vietnam, to Mexico. To avoid tariffs. And, and of course if you look at some of the narratives, uh, from the Trump campaign, they’re saying that if somebody is, is using this kind of [00:03:00] loopholes to get around the trade barriers. They will enact rules to say that, okay, maybe certain things imported from Vietnam, certain things imported from Mexico will no longer have the preferred tariffs.

Jianggan: But the reality is that, you have thousands of businessmen who are trying to figure out, I mean, how to navigate, and they will find ways. Yesterday I was talking to, to someone he knows the business from China. Who recently set up in a state of Paraguay. Do you know where that is? No, where is that?

Jianggan: South America. Oh, okay. It’s a country. And then he checked, the country has no diplomatic relationship with China. And he said, wow, I mean, these people, in order to survive, in order to do business, they are willing to go anywhere. 

Sabrina: I think that’s interesting, right? Because, like what you say, it doesn’t really matter, it doesn’t matter as much who wins the elections, because most of these businesses have already started preparing for alternative ways that they can. 

Jianggan: I mean, if you think about, recently there’s also talk about, about TAMO, right?

Jianggan: And it’s the potential US reversal of [00:04:00] the, the tax free treatment for certain parcels. And if you look at some of the cross border players, I mean, Tim has been preparing for that for like more than half a year. They are forcing more merchants to send goods directly from the U. S. So people know what the scenario is.

Jianggan: They are preparing for it. Obviously certain people would face challenges. But there are people who will be able to figure out, I mean, how to navigate this.

Sabrina: But I think it’s not just, businesses that are looking at these geopolitical issues, right? Definitely governments around the world are also concerned because it would impact their relationships with others.

Sabrina: a couple weeks ago, President Xi Jinping actually met with the Indian Prime Minister Narendra Modi. Yes. In Russia. In Russia. Right. Where they discussed a little bit about their relationships as well. 

Jianggan: Obviously, there’s a big concern amongst the people who are allied with the US over the last few years that if, I mean, if Trump gets elected, which by this time, you already know who would be the winner.

Jianggan: Things will not be smooth amongst the U. S. and its [00:05:00] allies. And India historically has been hedging space, right? Even though the U. S. wants to create the Quad, the sort of alliances of democracies or whatever that is called. India has been putting gas for Russia. And, trading a lot with China.

Jianggan: Before this recording, I checked the numbers of the trade between India and China. So over the last five years, effectively doubled. We know that in 2020 there was a like a border skirmish. A few people, a few soldiers died, and that caused, I think, a big rupture in relationship.

Jianggan: So it’s not practically impossible for Chinese businessmen to get a visa to travel to India and, India banned almost all the Chinese apps. but if you look at the trade, it has, it has been booming. So China is now India’s largest trading partner and of course, since the sign of, uh, potential stimulus from Chinese government over the last year, You see the effect of capital moving very quickly to Hong Kong from India.

Jianggan: So, I don’t know the [00:06:00] exact magnitude, but if you read the Financial Times this week, it says that the withdrawal of capital by foreign investors from the Indian stock market has reached a historical high. So we are in a state where a lot of shifts are happening. I think the governments are hedging their bets.

Sabrina: So investors are moving away from the India Stock Exchange? 

Jianggan: Foreign investors. 

Sabrina: Foreign investors are moving away. And then to Hong Kong Stock Exchange? 

Jianggan: Not exactly only to Hong Kong, but they’re moving away from India. If you listen to some of the interviews by some of the US hedge funds, they said, okay, we’re going only in Hong Kong, only into China.

Jianggan: A lot of things which seems very certain, But because of some sugar point, and it actually could shift very, very quickly., over the last few years, we have talked to a lot of Indian executives because for many of them, I mean, especially in tech business platforms, e commerce, et cetera.

Jianggan: they look to China for experience because nobody else has that scale. Yeah, I would say that there’s a lot of similarities. There are some similarities in terms off. [00:07:00] The amount of skill and demand that you can have based on India and China, right? Just because of the population. But of course, something I think we’ve mentioned about is that obviously it’s different.

Sabrina: It’s still different, right? In China, everyone speaks a common language. In India, there’s 18, 20, 23 official languages, including Sanskrit. 

Sabrina: So obviously there are a lot of similarities in terms of how we do know, um, from Indian companies that we spoke to, they look a lot to China in terms of how they could potentially grow in the market, right?

Sabrina: But I think they’ve also acknowledged that obviously there are a lot of different cultural differences and infrastructure differences as well between the different cities, cities in India. 

Jianggan: I think different cities in China are different as well. What I find particularly powerful is that, I mean, if you look at many of the Indian companies, they are dealing with challenges probably far greater than the companies in China had to deal with historically.

Jianggan: Infrastructure, I mean, the diversity, but there are also other areas where India is essentially leapfrogged. I mean, the software infrastructure, the IT system the payment gateway, et cetera, et [00:08:00] cetera. I do think that for lots of Indian businesses, I mean, looking at the reference points from China, and there’s no Indian market better than anybody else, right?

Jianggan: I mean, they’re looking for inspiration of what, how they can potentially do things. I have a friend, a Chinese entrepreneur who, who lived in India for like more than 10 years. . He’s now in Singapore, and he regularly talks with friends. He’s coming from India, and he’s still very passionate about the country, so I think there’s a lot of, desire for exchange

Jianggan: we were in the EU, right, two weeks ago, the trade center for China. We went to this, small store. , 

Sabrina: the Zao Cai Mao store, right? The one with the cats? Yeah, yeah, yeah. So basically, they have 

Jianggan: this, like, small figurine of astronaut, uh, like, waving a flag. And they have two of them. Like, one of them waving the Indian flag, one of them waving the Chinese flag.

Jianggan: I said, okay, haven’t seen this for a long time. And all of the participants was for India actually bought one of this. That reminds me of something which was said in 1950s, right? I mean, it’s like indigeny. Bye bye, right? So you mean and China were brothers. Do think that moving forward, there’s still a lot of [00:09:00] room for collaboration.

Jianggan: There will be lots of competition for sure. And, there will be lots of, Sagas, right? Because I mean, if you look at some of the business. Business collaborations solve the competition, but the fallout can be quite drastic. But still, I mean, look at overall trade. I mean, the businesses are voting with the trade bank.

Sabrina: In less political news, another one of the topics that we want to talk about in our weekly recap is more, it’s related, something relatable in terms of the coffee scene. So recently, Starbucks actually released their Q4 earnings. So they follow a different earnings cycle.

Jianggan: So their financial year ends, uh, end of September? September, yeah. So 

Sabrina: in their Q4 earnings, what they shared was actually that they saw a net revenue decline by 3 percent quarter on quarter. 

Jianggan: Globally? 

Sabrina: Globally. Okay this is something we’ve seen happening over the past few quarters as well. We know that their sales have been dropping.

Sabrina: So we did an episode where we talked about their new CEO and a little bit more about Starbucks revenue. So you guys can check that out in the show notes below if you’re [00:10:00] interested. But I think what we want to focus a little bit more on this week is talking about some of the changes that the new CEO, Brian Nicole is implementing, right?

Sabrina: And what this means for Starbucks. So essentially what he said in the earnings call is that He wants to go back to Starbucks. And some of the changes he’s making, for example, is removing the extra 1 charge for adding oat milk and almond milk. I think, um, TSART complains from on the ground of people wondering why there’s extra charges for this. They’ve also decided to add a self service station for cream and sugar. Hmm. And I think one of the main things that I’ve been seeing online generally is also a lot about Starbucks mobile orders.

Sabrina: So a couple of articles out there have stated that Starbucks has recently shifted to from more of a predominantly sit down coffee chain to mostly drive through and mobile takeout orders. And they feel that this is one of the reasons why Starbucks is not performing as well. And they also feel that These online orders [00:11:00] are taking away The value proposition of Starbucks because the staff are unable to engage with customers and give them the customer experience that is expected of Starbucks.

Sabrina: So this is something that the media has been saying, at least based on headlines, right? Essentially, Starbucks mobile takeout chain might be the reason why Starbucks isn’t hasn’t been doing as well the previous few quarters. But your face looks like you disagree with that. 

Jianggan: Part of the point that you just mentioned, right, removing that 1 extra charge for the alternative milk, I personally feel that, uh, I mean, going to Starbucks to order is quite tiring.

Sabrina: Because there’s too many options. So when it gives me to think about Yeah, there was that Bloomberg report, there are like 388 million ways 208 million waste for a cup of coffee at Starbucks was say, millions or billions. But there are lot of waste, lot of waste to customize. And obviously when you try to communicate this verbally to the barista, that adds to lots of stress, right?

Jianggan: Because I mean they need to remember this very, very carefully and they need to prepare the drinks according to whatever you have, asked. [00:12:00] So that adds to the operational complexity. Even if you’re ordering through mobile. I mean their mobile experience to be honest. I mean, 

Sabrina: it’s not the best 

Jianggan: We have lucky and others to compare.

Jianggan: It’s it’s not the best 

Sabrina: But they keep the same level of complexity in their mobile ordering as well. So it’s not really like It’s a little more simplified Obviously, you can’t go to the barista and tell them like, oh I want like two pumps of chocolate syrup in this But the level of complexity is still there, right?

Sabrina: You can choose like whipped cream, your sweetness level and all. So there’s still a lot of customization from their mobile app. And I think because of the level of customization that Starbucks has in general, this affects the operational efficiency of their employees, right? How quickly can you make a drink where every drink is so different as compared to Luckin

Jianggan: I would think that will make the recruitment part more complicated, right? 

Sabrina: The train of Starbucks employee, I think, takes two days. 

Jianggan: And also think about that. To recruit a barista for Lockheed is easy, right? I mean, you don’t require certain skills. You don’t require them to remember so many things. You don’t require [00:13:00] them to put a very nice sort of customer facing personality. But with with the Starbucks is different, right?

Jianggan: I mean, they require a lot of like skills and traits of baristas and with all this complication it makes delays. And the second is that it really needs the talent pool that they can tap into. I mean, there are people who were very good with people, and they might not be as good as, you know, following very, very precise processes.

Jianggan: So, so, so these are different, different skill sets. 

Sabrina: But I think it’s also, so then the problem is not really that they’re doing mobile orders, right? It’s in terms of how does Starbucks manage the operational efficiency. But that brings me back to what Brian said about going back to Starbucks. Operational efficiency was Never really the value proposition of Starbucks, right?

Sabrina: Their value proposition was always customer experience and providing a third place. 

Jianggan: But I think these two are not contradicting each other, right? Because when you are efficient, 

Sabrina: you can provide a nicer, 

Jianggan: I mean, the baristas have more sort of, uh, I mean, we don’t have to remember all these like extra requests in your mind and, and [00:14:00] remember typing the right things.

Jianggan: You have more sort of a, Energy, to actually engage with the customers. So I think these two are, should be in harmony and they should not be like contradicting each other. 

Sabrina: So I don’t think it’s the fact that Starbucks is unable to provide a good customer experience, but rather at this point they kind of, they’re unable to juggle between balancing the mobile orders as well as their in store customer service.

Jianggan: I do think that they have made the operation a little bit complicated. 

Sabrina: A little too complicated. I mean, of course, like if you have like 388. Million billion ways to make a coffee 

Jianggan: and you 

Sabrina: have food as well. 

Jianggan: Basically there are lots of things that the baristas need to take care of so so actually it’s not easy job 

Sabrina: And I mean, it’s not just north america that starbucks isn’t doing well and right one of their worst performing markets based on their latest Results is actually china.

Sabrina: Yeah, so there 14 percent quarter on quarter You In China, but this is something we’ve talked about In previous podcasts as well, right? Yeah, they haven’t been doing well and In china, of course, there are a lot of stronger [00:15:00] players that thrive in operational efficiency like Luckin Coffee Who is also actually planning on expanding into the u.

Sabrina: s So that’s according to a Financial Times report, right? Yes. Saying that, okay, Luckin’s planning to, to, to open up. In the US. And Luckin, so, Luckin only started their global expansion about a year and a half ago. So Singapore was their first stop, now they have about 40 plus stores. I don’t think they’re profitable yet. Larkin’s report, they admitted that in their earning conference, right? That judging from their early exploration in Singapore, although there were certain financial losses, it was still a valuable experience for them because it helped them realize the complexity of overseas businesses.

Sabrina: So I think they have not found a way to be, Profitable, probably for the overseas market, but it has helped them realize that obviously the Singapore market is very different, right? Luckin is a coffee store where you have to order mainly through your app. And especially Singapore has a more diverse coffee scene.

Sabrina: We also have our cheap coffee. So the mass [00:16:00] coffee strategy that Luckin used in China might not work as well in Singapore. 

Jianggan: So basically they said in earnings call, right? Yeah, that there were financial 

Sabrina: losses, but it was good experience for them. And now they’ve I think with this experience, they’ve decided that they want to try other markets as well. So Hong Kong is the next one that they’re entering. And then potentially maybe also the US.

Jianggan: I took a look at the lockings financial report for last year. , so he clearly let out, I mean, how much investment they were making to, to basically acquire, you know, where the stores and pay the rent and stuff, but I think at a gross level, they were okay.

Jianggan: I’m not sure about what happened this year because they’ve not exactly announced the breakdown. But I do think that, for a company like Locking, which has 20,000 stores, Singapore is not a market for them to prove anything, financially, but it’s something to prove to, people that okay, they can manage sort of a, a multinational operation.

Jianggan: Their voices in the market saying that, okay, they’ve confirmed the deal to inter Malaysia and some people are speculating whether they should go to Malaysia. Whether they should go to Vietnam, Indonesia, [00:17:00] Laos, et cetera. But what’s the point, right? in Indonesia, you have a few, , homegrown, like sort of tech network coffee players, and after six, 700 stores, they find it hard to, expand any further.

Jianggan: I mean, Starbucks has like, what, a few hundred, less than 1, 000 stores in Indonesia. So the market might not be as big as you potentially think. But the U. S. is a different story, right? I would think it’s quite plausible for Larkin to open another 20, 000 stores in the U. S. If they manage to figure out, how to manage that operations, as well as they are doing in China

Jianggan: it will be challenging, but at least, from story point of view, it’s possible for them to double their store count and with the market, which can potentially be more profitable. 

Sabrina: But Larkin is not the only Chinese coffee chain that’s growing very rapidly, right? Two weeks ago, we released an article called Coty Opens 10, 000 Stores.

Sabrina: So Coty Coffee is the coffee chain started by the original founders of Luckin Coffee, 

Jianggan: who got 

Sabrina: kicked out because of, you know, a lot of things. And then Coty Coffee recently celebrated their [00:18:00] second anniversary where they opened its 10, 000 stores. So this is, they opened 10, 000 stores in two years. 

Jianggan (2): For 

Sabrina: reference, Luckin opened 4, 500 stores in two years.

Sabrina: So this is almost double. But it’s a very different model. So Lock in is very self operated, right? 

Jianggan: I don’t know, people like to draw this kind of comparison, but Lock in was like before the pandemic, like 2017 or whatever. Quo Ti when it started, for them to choose a place to open stores, it’s very simple, like, okay, there’s Lock in, so I will go and open a store.

Jianggan: That’s a strategy that many Chinese players have been using. So I look at some retail business from China expanding overseas, What’s their strategy? So for instance, I’m a retailer of a fashion brand and I come to Singapore, go to Malaysia. If there’s Giordano, I will go on next door. 

Sabrina: How many malls are there in Singapore where there’s still a Giordano? 

Jianggan: Quite a few. And I was surprised. And when you go to the Middle East, when you go to Africa, you have Giordano’s. And in Singapore, there’s another brand called G2000.

Jianggan: Honestly, it’s a very boring brand. I mean, but they’re surviving. So, so, so many of this, this [00:19:00] store’s, strategies that, okay, I look at this G2000. Obviously, they are surviving. Uh, they’re probably profitable. I open a store next to them because I have better products. I have cheaper products. I have better supply chain.

Jianggan: I sort of, changed my assortment, once every two weeks, G2000 probably doesn’t. 

Sabrina: So they’re leveraging sort of this second mover advantage, right? 

Jianggan: Yeah, so, my point is that, when you say like the Kodi opened faster than nothing, I mean, it doesn’t make sense because when nothing started, he was trying to figure out this model.

Jianggan: When Kodi started. 

Sabrina: They had already. 

Jianggan: They just go, yes, there’s lockin. Okay, the locking must have done their studies and there must be room for coffee in this particular cat. Let’s open coffee next. Extra it. 

Sabrina: Do you think Luckin would use a similar strategy in the US in terms of picking where to open their stores?

Jianggan: I were them I would use that as reference point and list. 

Sabrina: I don’t think they would look at Starbucks, right? Starbucks definitely isn’t a direct competitor of. Different [00:20:00] business model, no? Okay, it depends on how they want to start in the US, whether or not they’re going to position themselves as a mess and very fast pick up and go.

Sabrina: So 

Jianggan: basically if I see a big ass Starbucks here, I put a lucky next door with like one fifth of the rent, hiring one fifth of the people, and people who are not as highly skilled as people at Starbucks. And then I sell, I sell drinks like half the price.

Jianggan: At least I can take all the mobile orders that Starbucks is giving me. I’m just saying that why not? 

Sabrina: Possible strategy. 

Jianggan: And, and of course, I mean, these guys will figure out their strategy based on their assessment of the market. I’m just saying that this is , one plausible pathway for them to expand.

Sabrina: I think it’s interesting when we look at all these, Chinese F& B companies that are going global and expanding so quickly, right, because we know that the F& B business has kind of been tough the past few years. So we were looking at the Knight Frank report where they stated that in 

Jianggan: Singapore. 

Sabrina: In Singapore in nine months.

Sabrina: 2, 500 F& B businesses have ceased operations. 

Jianggan: How much of [00:21:00] that is a percentage of the total market? Do we know? We don’t know, right? We don’t know the total market, yeah. I was in Changsha. I was speaking with one of the local, restaurant owners who has like four different concept restaurants, .

Jianggan: And he was saying that if you open a restaurant in Changsha, If you survive for six months, that’s already a great feat. So many of the places do not survive for six months. I think across Southeast Asia, we have not seen that level of competition, even though some people say now it’s very competitive, but, um, but they probably haven’t seen the level of competition in China.

Jianggan: But 

Sabrina: we do see that Chinese brands are coming out just because of the level of competition in China. So I think that would definitely affect how, competitive this region becomes, right? 

Jianggan: Yeah, we’re definitely because I think we calculated like 7000 stores of FMV outlets by about 40 concepts.

Jianggan: Most of the Chinese opened during the first three years of the pandemic or in the last three years. So, so obviously we had, we have so many of these others coming in [00:22:00] and not everyone will survive, but they would, take some of the demand away and of course creates competitive pressure for the existing sort of operators in the market, right?

Jianggan: So back to Corti. So they have 10, 000 stores, right? 10, 000 stores. And they chose to open their 10, 000 store in Doha. 

Sabrina: Doha, yes. 

Jianggan: It shows that, uh, I mean, this is a very ambitious company.

Jianggan: But what they want to do next, I find quite interesting. They’re saying that, okay, next year they want to have 50, 000 stars from 10, 000. And what’s the strategy to achieve that? Instead of opening individual stores? They want to work with the convenience, convenience shops, convenience shops. 

Jianggan: Personally, I find it interesting, that they set such aggressive target, but the way they do it, um, sounds to me 

Sabrina: Possible way to grow so quickly at that scale because they’re not operating most of these thoughts themselves, right? They’re working with partners.

Sabrina: They’re working with franchisees. And of course, if you ask that a 

Jianggan: lot of cost, of course, that puts their sort of coffee machines in the community stores and retailers and [00:23:00] stuff on obviously helps the retailers, right? We have a brand in a sort of coffee experience there.

Jianggan: It brings people there. People might buy other other stuff. My curiosity is a couple of things. I mean, first, does that signify that for locking itself to open more stores on its own or with these franchises? It has become more difficult. And the second what are terms you can possibly negotiate with all these people to place your brand within their stores?

Jianggan: I would think that , some of the larger concepts like the convenience store chains. would probably demand something from you. Or majority of the profit sharing. So that’s a question mark. But still, I think it shows that They’re 

Sabrina: very ambitious. We shall see. In one year, we’ll do another podcast on whether or not Coty actually has 50, 000 stores.

Jianggan: I see you buy Larkin a lot. I don’t see you buy Coty. Is that because there’s no Coty nearby? There’s no 

Sabrina: Coty nearby. So that’s 

Jianggan: an opportunity for Coty. Yeah 

Sabrina: I don’t like coffee. . This tiramisu latte is really not nice. 

Jianggan: It’s like the Christmas one.

Sabrina: So you were sharing an article about how consumers in China were [00:24:00] pouring the Luckin’s Toffee Nut Latte into the Starbucks cup, right? But I think that’s the Starbucks brand, right? They will take photos and videos of themselves drinking with the Starbucks cup.

Sabrina: So that shows that they view Starbucks as a premium brand as compared to Luckin Coffee. Even though there were some comments that said that the Luckin Coffee version tastes better. 

Jianggan: So Luckin has something similar, right? It’s the exact 

Sabrina: same drink. So it’s also called Toffee Nut Latte. . 

Jianggan: I mean, I struggle to understand this individual comments about the test, right? I mean, when this coffee chance first came out, I mean, imagine like when before all this, like locking whatever came out, how many people will tell you that old Starbucks test sucks?

Jianggan: I like this specialty coffee. I didn’t know that you see much more Starbucks than this, 

Jianggan (2): whatever special coffee that 

Jianggan: you love. So it tells me possible two things, right? I mean, first test can be subjective so Starbucks is probably going for the largest denominator, right?

Jianggan: So we create the [00:25:00] experience and it probably needs his coffee to not have such a strong taste so that it alienates some audience. Most people will find it. Okay, maybe a little bit boring, but acceptable. But I don’t know. Don’t mind like, you know, I need a cafe. I need to like sit down if I 

Sabrina: need somewhere to sit down If I need to have a meeting outside the starbucks value proposition 

Jianggan: Someone 

Sabrina: in I think the article you’re sharing they brought their lakin coffee To starbucks and then they poured it in a starbucks cup and then they sat down there So i’m like is that but that’s not that cannot be good for starbucks business, right?

Sabrina: People are taking up space in your cafe They’re not even buying a drink from you they’re buying a drink from your competitor 

Jianggan: Yes, I mean, that depends on how you view view this, right? I mean, what kind of brand image you want to set? Living in Singapore, one thing which upset me greatly during the pandemic, which, which caused me to never go to a particular coffee chain again, coffee and tea leaf, is when you sit down with a laptop before you even open it, laptop’s not allowed to be used here.

Jianggan: Of course, for [00:26:00] them, it makes sense, right? They were, they should have said that, okay, if people use laptops there, they sit for more than an hour. There’s a time limit. But that freaking store was empty. 

Sabrina: The staff is probably following protocol. 

Jianggan: Yes, but some protocols just don’t make sense.

Jianggan: and it shows detachment from realities. So is the, uh, stuff as complexity of all the strings, right? And if you, if you spend time in the stores and you’ll probably say that, okay, and people find it too complicated. I don’t think most people even order. Such complicated drinks, right? It’s probably just a small percentage.

Sabrina: Most people probably order the same few things every time they go to Starbucks. How many people are actually ordering like a different drink that has like 11 different combinations every time they go to Starbucks? I do not know, but I’m sure it complicates the operations because I mean the staff need to be trained and if 10 percent of the people order like complicated drinks that causes the process to be slower.

Jianggan: I 

Sabrina: think this is definitely someone, something that Starbucks is going to think about, right? As they think about operational, like, improving their operational efficiency and trying to bring back the customer value to their customers. But of course, I do think it’s too early to tell. Brian Nichol only took over [00:27:00] a couple months back.

Sabrina: We’ve seen Starbucks go through a similar journey before. Where they kind of A few times, right? Yeah, lost, um, we don’t know if Howard Schultz will come back. I think great companies, really have been smooth sailing, right? They go through crisis and each crisis make them stronger.

Jianggan: Also separately, another thing I like, that the Starbucks, at least in Singapore has done, is their wifi used to ask you to, to either log in through Facebook or input your like email address or phone number.

Jianggan: Which is, I think, I find it completely useless because, I mean, of course, the argument is that you can collect data, but most people input fake data. Yes. Because they have no mechanics to check whether the data is genuine or fake. Did they stop asking you? Yeah, they stopped. Now you just need to collect.

Jianggan: Connect to Wi Fi. Connect to Wi Fi. That’s good enough. Oh, that’s efficient. So this, this is just small things, right, that help you make it less troublesome for your consumers? I do think that, there are lessons for, for any organization, right? You design something, you say, okay, the data will be great. But if you don’t collect the right data, you might as well not collect it.

Jianggan: That’s true. 

Sabrina: So I think that’s all for this week’s [00:28:00] episode of the Impulso podcast. We hope that you guys enjoyed today’s episode and also this new format of kind of like weekly commentaries, recaps, where we talk about different topics. If you do, do like our podcast and subscribe to us on YouTube to stay up to date on the latest happenings and trends in e commerce, tech, new retail and the broader digital economy.

Jianggan: And we don’t always talk about politics. 

Sabrina: Yes. Actually, we don’t talk about politics. 

Jianggan: But that’s something which impacts everyone. Yes. 

Sabrina: Okay, thank you. 

Jianggan: Thank you.