According to Cha Ka Observation, Shanghai Auntie has stopped joining the independent coffee brand "Shanghai Ka", and the original coffee business has gradually been integrated into the main brand Shanghai Auntie.
Another person familiar with the matter revealed that in mid-September, the Shanghai aunt may officially announce relevant business adjustments. This business adjustment includes: Aunt Shanghai started selling coffee products, stores use coffee beans and coffee machines of the same specifications as Luckin, and are the first to upgrade their coffee product lines in some regional stores.
Public information shows that Shanghai Cafe was established in March 2023 and is mainly presented in the form of a store-in-store. Compared with the main brand, Aunt Shanghai, although there is no independent decoration or door head, it uses a different ordering system from Aunt Shanghai. If consumers want to drink coffee, they have to enter through the ordering system of Shanghai Coffee. The cups, straws and other materials used are also a separate set, forming a special form of "physical symbiosis and operational separation".
In September 2024, Shanghai Cafe tried to accelerate its expansion, open single-store franchise nationwide, and set a clear entry threshold: the applicant must be between 25 and 40 years old, and must be a store manager, and at least personally participate in the store leadership for more than one year, with a fund budget of more than 200,000 yuan, and it is clearly required to operate separately and not accept partners.
However, this expansion plan died less than a year after its implementation. The company has made it clear that it will no longer open to the new franchise of Shanghai Casino. The Shanghai Casino WeChat official account will also stop being updated from October 2024, and the original business will begin to be integrated into the main brand.
Shanghai Ka's performance did not meet expectations. Although Shanghai Casino tried to be independent of the Shanghai aunt last year, from the market information, it did not cause much splash. It had no independent storefront, but also had to rely on the parent store space and customer flow, and fell into an embarrassing situation of "not independent enough, but not integrated enough".
The two ordering systems and two sets of material systems have increased operational complexity and cost, but have not brought corresponding brand awareness improvement and performance returns. The prospectus of the Shanghai Auntie shows that Shanghai Cafe achieved a GMV of 40 million yuan in 2024, an increase of 16.28% year-on-year, but the average daily GMV of a single store has dropped from 307 yuan in 2022 to 116 yuan in 2024, while the average customer price of Shanghai Cafe is between 10-15 yuan. Based on this calculation, the store may not be able to sell 10 cups of coffee a day.
Therefore, stopping Shanghai Cafe franchise and merged into the main brand is to stop losses in a timely manner, avoid continuously wasting investment resources and operational energy in an inefficient model, and refocusing financial and material resources on a more potential direction.
Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, pointed out that in the context of mature players having established scale and cognitive barriers, there is little chance of weak new brands breaking through. Aunt Shanghai chose to return to the main brand and upgrade its quality. Relying on Aunt Shanghai's brand awareness, consumers are willing to try their coffee products; then, through the quality labels of gold medal beans and professional equipment, they retain users who have requirements for the taste of coffee, so as to find their own living space.
Source: Tea Coffee Observation
Photo source: Brand official account
