Analysis | This is why Louisa Coffee will never beat Starbucks

The logos of Louisa Coffee and Starbucks are seen in this undated photo collage. (NOWnews)

TAIPEI (The China Post) — With the introduction of the “Triple Stimulus Vouchers,” businesses around Taiwan are pushing forward with new promotions to get lucrative sales on the back of eager customers.

Among other highlights, Starbucks Taiwan recently unveiled a 10-percent discount scheme for all products purchased with government-issued vouchers at brick-and-mortar stores until Dec. 31.

The unprecedented deal comes in unprecedented times as competition remains fierce. In December 2019, the Taiwan coffee industry underdog, Louisa Coffee, overcame Starbucks Coffee in total store locations.

Asked about rival Louisa Coffee during an interview with Chinese-language media on Wednesday, the chairman of Uni-President Enterprises Corporation (統一企業集團), which owns Taiwan subsidiary company, utilized a face mask metaphor to explain the nature of the competition.

When the pandemic began, Chairman Chih-Hsien Lo (羅智先) remarked that Uni-President Enterprises Corporation started manufacturing face masks in China, reporting production unit-costs of 2 RMB while some competitors had face masks selling for 3 cents RMB.

Lo used this example to underline the unique nature of each company. As of now, Starbucks continues to upgrade its brand through its dedicated focus on experience, known as its competitive advantage.

Meanwhile, Louisa Coffee has maintained its focus on coffee, aiming to rebrand itself as an artisanal coffee chain, he observed,

Against this backdrop, he remarked that the different nature of each company within the same industry means entirely separate customer segments and appeals.

Starbucks and Louisa Coffee’s operations thus won’t interfere, especially as Starbucks reaches new heights in their experience-based initiatives, he continued.

Starbucks’ recent strides in opening the Starbuck Reserve and introducing classy brews and beers have further the brand differentiated itself from its competitors, he explained.

If Starbucks continues to maintain its position as a high-end specialty coffee brand, competitors, such as Louisa Coffee, will never be able to gain the same traction and clout Starbucks enjoys, he argued.