Tuesday, May 28

Luckin Coffee Surpasses 10,000 Store Milestone, Demonstrating Remarkable Growth

Luckin Coffee, the technology-driven coffee chain, has achieved a significant milestone by opening its 10,000th store in Xiamen. This marks an impressive surge in growth for the company, with nearly 500 new stores added in January 2023 alone. It’s worth noting that Luckin Coffee had just reached the 9,000-store mark by the end of the first quarter.

This milestone signifies a remarkable turnaround for the company, which faced a financial scandal in 2020 leading to significant changes in its management, delisting from the Nasdaq, and filing for bankruptcy in the US.

Founded in late 2017, Luckin Coffee reported a remarkable 84.5% year-on-year revenue growth, amounting to RMB 4.4 billion (approximately $646 million) in the three months ending March 31, 2023.

The company’s impressive quarterly performance follows its first full-year profit in 2022, with 67% sales growth reaching RMB 13.3 billion (around $1.9 billion) for the 12 months ending December 31, 2022.

In March 2023, Luckin Coffee embarked on international expansion, opening two pick-up stores in Singapore. Presently, the chain operates seven stores in the Southeast Asian country and is eyeing potential new markets in Indonesia and Thailand.

Luckin Coffee’s growth strategy is centered around flexible store formats, like pick-up and delivery, with most outlets offering limited or no in-store seating.

Competing for a larger share of China’s burgeoning branded coffee shop market are US coffee giant Starbucks and Tianjin-based Cotti Coffee.

Starbucks, under the leadership of new CEO Laxman Narasimhan, reiterated its ambitious plan to open nearly 2,800 stores in China in less than two years. The company achieved a 10% outlet growth in China during the second quarter of 2023, bringing its total to 6,243 stores across the country.

On the other hand, Cotti Coffee, established by former Luckin Coffee executives Charles Lu and Jenny Qian in October 2022, aims to reach 10,000 stores across China by the end of 2025. The value-focused coffee chain has adopted a growth model similar to Luckin Coffee and reportedly opened 1,300 stores across 181 Chinese cities in the five months leading up to March 2023, including an impressive 80 outlets in a three-day period.

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