The largest coffee chain in China in just four years.
How Luckin Coffee, a Chinese homegrown beverage chain, has surpassed Starbucks.
Hello welcome to Episode of the week. In this episode, you'll learn how Luckin Coffee, a Chinese homegrown beverage chain, has surpassed Starbucks as the largest coffee chain in China in just four years. Episode from the YouTube channel The Art of Business
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Here are some of the highlights:
- Luckin Coffee was founded in 2017 by Qian Zhiya, a former executive at UCAR, a Chinese car rental company. She saw an opportunity to tap into the growing demand for coffee among young urban professionals in China, who were looking for convenience, affordability and quality.
- Luckin Coffee's business model is based on mobile ordering, delivery and pickup. Customers can order coffee through the Luckin app, which offers discounts and loyalty rewards. They can then choose to have their coffee delivered to their location within 30 minutes, or pick it up from one of the thousands of Luckin stores across China, which are typically smaller and cheaper to operate than Starbucks locations.
- Luckin Coffee also offers a variety of products that cater to the preferences of Chinese consumers, who are less accustomed to the bitter taste of traditional coffee. For example, Luckin sells fruit teas, cheese foam drinks, yoghurt smoothies and pseudo-coffee drinks that are made with malt extract and milk.
- Luckin Coffee's aggressive expansion strategy has enabled it to open more than 10,000 stores in China as of June 2023, surpassing Starbucks' 6,480 stores. Luckin Coffee also claims to have more than 170 million cumulative transacting customers and 43 million average monthly transacting customers as of the second quarter of 2023.
- Luckin Coffee's rapid growth has attracted investors and media attention. The company raised more than $2 billion from private funding rounds and an initial public offering on Nasdaq in 2019. However, it also faced challenges such as accounting fraud allegations, regulatory scrutiny and competition from other coffee players in China.
If you want to watch the full episode and learn more about Luckin Coffee's story, you can find it here -
I hope you enjoyed this newsletter and found it informative.