Would you Like Coffee or Gasoline?

More and more people are interested in the coffee industry today. On September 3, Easy Joy Supermarket of Sinopec Group officially released its new brand “Easy Joy Coffee”, and the first batch of Easy Joy coffee shops will be opened in nine petrochemical gas stations in Suzhou.

That is to say, in the nine gas stations in Suzhou, you will be able to buy not only gasoline, but also three different positioning coffee series: 92 (black and white coffee), 95 (fashion special drink) and 98 (boutique series). In addition, Easy Joy coffee also provides two modes of shopping: in-shop and delivery.

WOULD YOU LIKE COFFEE OR GASOLINE?

The birth of Easy Joy coffee brand means that Sinopec Easy Joy’s non-gasoline business has expanded again.

Easy Joy Convenience Store and Easy Joy Coffee are important components of Sinopec’s non-gasoline business. In order to intervene in the non- gasoline business, Sinopec set up Easy Joy in 2008, and entered the convenience store field. Then in 2014, Easy Joy started mixing with Sinopec to become the main force of Sinopec’s layout in new retail and convenience stores.

In fact, as early as 2012, Easy Joy has been trying to run its own coffee and soft drinks business. For example, Easy Joy will provide ready-made coffee in convenience stores. But this time, two big coffee brands are also involved: Luckin Coffee and Coffee Box.

Last year, when Easy Joy Convenience Store upgraded its second generation, it began to test water and cooperate with Luckin Coffee. It decided to “let the professional do the professional things”. At that time, Luckin Coffee pulled out about 10 square meters of “store-in-store” in the first new concept store of Easy Joy Hangzhou and the store used “Easy Joy + Luckin” as its store name.

Now, Easy Joy obviously decided to go back to its own business, to brand its own coffee. This time it chose Coffee Box as its partner. As to whether Easy Joy and Luckin will cooperate or not, there is no official reply from Luckin yet. 

WOULD YOU LIKE COFFEE OR GASOLINE?

Why did Easy Joy choose coffee?

To solve this problem, Easy Joy released a set of data – more than 50% of the profits of the mature foreign market gas stations come from non-gasoline business. In some developed countries, coffee in gas station convenience store has almost become common. In addition, China’s per capita coffee consumption in 2018 was 6.2 cups (only 1 cup of freshly ground coffee). Compared with developed countries, China’s per capita coffee consumption was only 1.6% of that of the United States. However, China’s coffee market has maintained a compound growth rate of 20% annually (nearly 10 times of the world average).

What is more, according to Jiemian News, the preferred convenience store of Royal Dutch Shell Group, an international oil giant, can sell 250 million cups of coffee every year. Ke Yifan, the executive vice president and president of retail business of Shell Group, once said, “Coffee has a much higher profit margin than gasoline.”

The rapid growth of the domestic ground coffee market enables Easy Joy to see a new business growth point. This is very similar to the caliber of Luckin when it first entered the coffee business: the coffee sold in China is far from enough; the domestic coffee market has not been fully developed; and the coffee stomach of Chinese people needs to be cultivated.

WOULD YOU LIKE COFFEE OR GASOLINE?

And the advantage of Easy Joy convenience stores is obvious when it jump into the coffee field.

In industry recognition, although people seldom count gas station convenience stores in the real convenience store format, gas station convenience stores have become an indispensable branch of convenience store industry – in 2018, the number of Easy Joy convenience stores is 27259, ranking first in the list of China’s top 100 convenience stores in 2018. Although Easy Joy is a convenience store in gas stations, its number of stores is higher than the overall level of China’s convenience store industry.

More than 27,000 stores mean unlimited imagination for any retail format. Easy Joy naturally wants to make full use of them. So it sounds reasonable to open up the scene of coffee consumption in gas stations: Easy Joy coffee has a congenital fixed consumer group. It does not have to worry about the location of stores, the matching of customers, the rent and the competitive power of its opponents, such as Luckin Coffee and Coffee Box.

Even with the special distribution of gas stations, Easy Joy can catch the so-called “sinking” people who are not covered by Starbucks, Luckin or Coffee Box. At present, the cheapest “black coffee” is only 12 yuan on the Easy Joy coffee menu, while the price of Red Bull costs an average of 6 yuan in the supermarket, but may sell it for more than 10 yuan in some service areas. So ideally, coffee might be an alternative to Red Bull.

For Sinopec and Easy Joy Convenience Stores, whether the coffee business will become an increment depends on the drivers’ attitudes. Let us wait and see.

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