Pickup Coffee recently raised 2.2 billion pesos in funding, bringing its valuation to over 7 billion pesos. But what exactly did they do differently? Why are they so successful in the competitive coffee market in the Philippines? I made a short video about Pickup Coffee’s success on my Instagram and TikTok. Check it out for a quick overview and additional insights into how Pickup Coffee is transforming the coffee industry in the Philippines.
Strategic Positioning for Success
The folks at Pickup Coffee understood that while there are customers who treat coffee shops as "third places" — spots where they can work, meet people, or simply take it slow — there is also a significant segment of the market that wants coffee fast. These are the people who need to quickly grab their daily caffeine fix on their way to work or during an office break. They don’t necessarily need an extraordinary coffee experience, but they do need something better than instant coffee.
Domination of the Takeout Coffee Category
Pickup Coffee positioned their brand to serve this exact need, aiming to dominate the takeout coffee category. Getting your coffee to-go is nothing new; it's a common practice in our favorite coffee shops. However, for other brands, takeout is merely a feature, an option among many ways to get your coffee.
Pickup Coffee took a different approach. They declared that takeout wouldn’t just be a feature for them — it would be everything. They committed to creating a brand that would obsess over takeout coffee and dominate this category in the minds of consumers. Their goal was clear: if you want takeout coffee, Pickup Coffee should be the first name that comes to mind.
Affordable Pricing and Accessibility
Pricing their products below 100 pesos certainly played a role in their success. However, this pricing strategy alone wouldn't have been enough to stand out in the crowded coffee market. The key to their success was their strategic positioning. By offering espresso-based beverages starting from as low as 50 pesos and capping prices at 100 pesos, Pickup Coffee made premium coffee accessible to a broader audience in the Philippines.
Innovative Mobile Ordering Platform
Beyond pricing, Pickup Coffee has also embraced technology to enhance customer convenience. They operate a fully integrated mobile ordering platform that facilitates pre-orders and beverage delivery. This platform, coupled with partnerships with delivery services like GrabFood and Foodpanda, ensures that customers can easily get their coffee fix on the go.
Significant Funding and Expansion
Pickup Coffee's recent funding success is a testament to their innovative approach. In April 2023, they raised $26.7 million in Series A1 funding, led by Indonesia’s Go Ventures, with other investors including Openspace Ventures and Kickstart Ventures. This funding round has significantly boosted their valuation and will support further expansion and enhancement of their services.
Dominating the coffee scene
Pickup Coffee’s focused approach and clear brand message have resonated with a specific customer base in the Philippines. They’ve managed to carve out a niche by understanding and catering to the needs of people who prioritize speed and convenience over a leisurely coffee experience. This innovative strategy and clear brand positioning are why Pickup Coffee has become so successful, securing significant funding and achieving a high valuation in a competitive market. Their story is a testament to the power of understanding your customers and delivering exactly what they need.
