---
title: "Lai Yifen Enters the Coffee Arena: Can the Snack Giant's Side Hustle Succeed?"
description: "The battle for the coffee throne never ends. After Luckin's surprise attack on Starbucks made it the first domestic chain to reach 10,000 stores, Cotti and Lucky Cup are seizing lower-tier markets, while specialty brands like Manner, SeaSaw, and % Arabica are also formidable. Lai Yifen, known as 'China's first listed snack stock,' has now entered this fiercely competitive arena, launching its coffee brand 'Laika' with products like coconut coffee and lattes, available in over 400 stores across East China."
author: "乐乐"
publisher: "New Distribution"
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published: "2023-09-22"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/9JAUf5syWR0VsOex3KI2GQ"
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# Lai Yifen Enters the Coffee Arena: Can the Snack Giant's Side Hustle Succeed?

> The battle for the coffee throne never ends. After Luckin's surprise attack on Starbucks made it the first domestic chain to reach 10,000 stores, Cotti and Lucky Cup are seizing lower-tier markets, while specialty brands like Manner, SeaSaw, and % Arabica are also formidable. Lai Yifen, known as 'China's first listed snack stock,' has now entered this fiercely competitive arena, launching its coffee brand 'Laika' with products like coconut coffee and lattes, available in over 400 stores across East China.

The battle for the coffee throne never ends. After Luckin's surprise attack on Starbucks made it the first domestic chain to reach 10,000 stores, Cotti and Lucky Cup are seizing lower-tier markets, while specialty brands like Manner, SeaSaw, and % Arabica are also formidable.
Lai Yifen, known as 'China's first listed snack stock,' has also charged into this year's most competitive track. Recently, Lai Yifen officially announced the launch of its coffee brand 'Laika' and released a new brand logo. Its products include coconut coffee, lattes, and other beverages. Currently, Laika has landed in over 400 Lai Yifen stores, covering East China regions such as Shanghai, Zhejiang, and Jiangsu.
According to official plans, in the initial phase, 'Laika' will primarily operate as a store-in-store concept within Lai Yifen locations, gradually evolving into standalone stores in the future. On the launch day, Lai Yifen introduced promotions like 'any in-store purchase + 9.9 yuan for a coffee' and '138 yuan for 15 cups,' pricing single cups close to Luckin and Cotti's promotional rates.
Image source: Photo taken by ourselves at a Lai Yifen store
Public data shows that Lai Yifen was officially listed on the Shanghai Stock Exchange in 2016, hailed as 'China's first listed snack stock on the main board.' With years of deep cultivation in the leisure food industry, its business covers over 30 provinces. Its products are primarily self-owned brands, supplemented by third-party brands, spanning categories like meat snacks, pastries and biscuits, nuts and fried goods, puffed food, and instant beverages. As of the end of 2022, it had over 3,600 stores nationwide.
Despite the fanfare of this cross-industry entry into coffee, it hasn't made much of a splash.
On one hand, Laika has only been around for about ten days, and market attention is low. Compared to specialty and commercial coffee brands, Laika lacks a distinct brand identity.
On the other hand, consumers are somewhat weary of Lai Yifen's pattern of neglecting its main business for side ventures. Before coffee, it had tried sparkling water and sauce-flavored baijiu, but with limited success.
This time, can Lai Yifen, switching tracks, truly compete?
**Main Business Snacks, Side Business Coffee:**
**Is Lai Yifen Becoming a 'Slash Youth'?**
In fact, this isn't Lai Yifen's first foray into coffee.
Before the coffee track became crowded, Lai Yifen had already attempted to sell freshly brewed coffee. In 2021, Lai Yifen formed a strategic partnership with BTB Baotong Road, placing coffee machines in over a hundred stores in cities like Shanghai, Nanjing, Suzhou, and Hangzhou—marking the brand's entry into the fresh-brewed segment.
After two years of exploration and upgrades, Laika was born. So what makes the upgraded Laika different?
**1. Laika is positioned as 'Shanghai-style' coffee.**
In Laika's official launch poster, Lai Yifen clarified the new brand's positioning, rooted in Shanghai-style coffee culture.
Shanghainese indeed love coffee to the bone, with over 8,000 coffee shops in the city—a testament to its coffee dominance.
Therefore, Laika's main battlefield is East China, with Shanghai, Zhejiang, and Jiangsu accounting for over 90% of its stores. Betting on the region's strong spending power, Laika's ambitions are hardly modest.
**2. From naming to brand exposure, Laika will be weakly tied to Lai Yifen.**
Chen Wei, Vice President of Operations and Development Systems at Lai Yifen, stated in an interview that the upgraded Laika brand will not overemphasize its association with Lai Yifen, paving the way for future independent planning. By the end of this year, Laika is expected to reach 800–1,000 stores.
According to Chen, Laika currently relies on the existing 3,000+ Lai Yifen stores, rolling out in a 'store-in-store' format, allowing consumers to grab a coffee while buying snacks. In the view of New Consumption Think Tank, this resembles the convenience store coffee model of FamilyMart and Lawson, leveraging existing stores and membership bases to increase average transaction value through enhanced store services.
In the second half of this year, Lai Yifen will launch its tenth-generation store image, and Laika will have a dedicated takeout window, allowing consumers to enjoy coffee without entering the store.
**3. Product line expansion.**
From the announced products, Laika offers lattes, coconut lattes, Americanos, and more. Beyond continuous new releases, Laika will also introduce more coffee-related items, such as freeze-dried coffee powder, coffee liquid, and coffee-flavored cups.
In Hangzhou, New Consumption Think Tank visited several stores, but store staff were unaware of the 'Laika Coffee' brand upgrade or its specific locations in Hangzhou. Additionally, searching for 'Laika Coffee' on Meituan and Dianping yielded no results.
Switching to Ningbo, Wenzhou, and other cities, the situation was the same. At least for now, the number of 'Laika' stores actually operational in Zhejiang may be limited.
Image source: Dianping search results for Hangzhou and Shanghai show no results
Similarly, leisure snack brand Liangpin Shop has been optimizing its sixth-generation store structure, adding high-frequency, rigid-demand product lines like coffee and bakery to enrich categories. Its popular 'little lime juice' drink now occupies the most prominent spot in its store coolers.
**Once China's First Snack Stock,**
**Struggling with Main Business Growth Anxiety**
Over the past few years, Lai Yifen has made numerous attempts to maintain investor confidence. Around 2018, it acquired a distillery in Maotai Town for corporate hospitality and gifts. Two years later, it launched the 'Zui Ai' series, officially entering the sauce-flavored baijiu track. That same year, it introduced its first sparkling water, 'Pai Pai Ning,' competing head-on with Nongfu Spring and Genki Forest. It also dabbled in beauty and skincare, pet products, and grain and oil seasonings.
It's true: 'If you can think it, they've done it.' These diverse side ventures reveal Lai Yifen's anxious quest for new growth engines.
**Peaking at debut is Lai Yifen's mark on the era.**
In the 1990s, snack sales were mainly through mobile vendors and supermarkets, with after-sales and food safety issues hard to guarantee.
At that time, Yu Ruifen and her husband Shi Yonglei saw a gap in this niche market. In 1999, they opened their first store in Shanghai, specializing in pecans.
In the early 2000s, Yu Ruifen innovatively introduced the chain store model to the leisure food industry, converting bulk snacks into small packages. Lai Yifen's business blueprint began to unfold.
In October 2016, Lai Yifen successfully went public. That year, its revenue reached 3.237 billion yuan, net profit was 134 million yuan, and it had over 2,000 stores. At that time, Yanjin Shop was still in IPO queue, and Three Squirrels and Liangpin Shop hadn't yet filed IPO materials with the CSRC.
Bearing the title 'China's first leisure snack stock,' Lai Yifen shone in the capital market. Its IPO price was 11.67 yuan per share, peaking at 56.54 yuan within a month.
However, with the rise of e-commerce, Lai Yifen, which started with direct-operated stores, showed clear signs of waning momentum, and growth began to slow. Revenue growth for 2018, 2019, and 2020 was 7.01%, 2.86%, and 0.59% year-on-year, respectively, even lagging behind 'latecomers' like Three Squirrels and Yanjin Shop.
Seeing the decline, Lai Yifen wasn't without ideas. In 2017, to expand sales channels, it launched the 'Wanjia Denghuo' (Ten Thousand Lights) plan, accelerating offline expansion and franchising. But this not only failed to boost performance but also led to a surge in expenses, resulting in net losses.
Looking back over the past five years, Lai Yifen's main business has been unstable. From 2018 to 2022, it reported net profits attributable to shareholders of 10.11 million, 10.37 million, -65.2 million, 31 million, and 102 million yuan, respectively. Non-GAAP net profits were -46.53 million, -32.96 million, -104.6 million, -65.5 million, and 59.78 million yuan.
Image source: Xueqiu
Recently, Lai Yifen disclosed its 2023 first-half results, expecting net profits of 51 million to 61.2 million yuan, down 44.62%–53.85% year-on-year.
Lai Yifen attributed the decline to optimization of certain channel businesses, which led to lower sales in those channels compared to the same period last year.
**Lai Yifen's decline and anxiety are now plainly visible.**
**Cross-industry Ventures: Proceed with Caution**
After falling from its peak, Lai Yifen began seeking change. In recent years, it has launched three major strategies: 'strengthening franchise models, improving online business, and advancing brand upgrades.' Beyond these, it aims to find a second growth curve by broadening categories and pursuing side ventures.
For companies, 'side hustles' can indeed be a good option to accelerate transformation and attract market attention.
> First, young consumers are becoming the main force, so brands need to match their new demands through transformation, innovation, and upgrades.
> Second, cross-industry expansion opens new tracks and growth areas, reducing the risk of 'putting all eggs in one basket' while providing PR buzz.
In the snack track, 'snack king' Liangpin Shop keeps expanding into new areas, launching children's snacks, fitness meal replacement snacks, and even entering the functional food market for diabetes. Dali Foods introduced low-sugar herbal tea 'Hecha' and 'SOULDAR' soda crackers, but unfortunately, they didn't make much noise. Dali also tried real estate and e-commerce.
**Not just leisure snack brands; old and new companies are equally eager.**
'National milk candy' brand White Rabbit entered the cosmetics market; time-honored brand Cold Sore Spirit teamed up with hotpot brand Xiaolongkan to launch hotpot-flavored toothpaste, sparking social media discussions; and national toilet water brand Liushen collaborated with Rio to create a Liushen-scented cocktail. The crossovers get wider and more absurd...
But are these side ventures new growth or new burdens? The answer isn't clear-cut.
**While side hustles sound imaginative, they can easily fall into a 'shoot and move' pattern, appearing broader but actually superficial. More deeply, there's a risk of 'stepping on air,' turning side ventures into a drag on the main business.**
Take Liangpin Shop: despite setting up multiple business stalls, it hasn't yet developed a sustainable new business beyond its core. Its once high-end brand 'Liangpin Feiyang' has quietly disappeared from financial reports. Whether new brands 'Kong Duo Ka' and 'Jie Tang You' can survive and turn profitable remains to be seen.
Similarly, for Lai Yifen, side ventures aren't easy. Looking at the 'baijiu' side business, annual report data shows that in 2021 and 2022, the company behind the Zui Ai series generated revenues of 8.671 million and 5.613 million yuan, respectively—a negligible share of total revenue.
The coffee market Laika enters is fiercely competitive. While selling coffee in snack stores might attract some foot traffic and help with brand rejuvenation, overall, 'different trades are separated by mountains.' Whether it can differentiate itself at this highly competitive juncture is a new challenge for Lai Yifen.
Image source: Photo taken by ourselves
Times have changed. Lai Yifen, unwilling to stay stagnant, is striving to break free from its cage. However, it's best to proceed cautiously with side ventures over the main business.
The images in this article are for introduction purposes only and not for commercial use. If there is any infringement, please contact the editor to delete.******


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