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Monthly Archive July 2018

Luckin Coffee

Luckin Takes on Starbucks China

According to CBN Data, Coffee sales will top US$43.7 billion in 2020, a 330% jump from 2015 and this seven month old start up is giving Starbucks China a run for their money.

“There can’t be only one brand for China’s coffee market,” said Qian Zhiya Luckin Founder.  Speaking to the media about their market entry in China where Starbucks has dominated (50% market share), she stated firmly, “We are willing to learn from Starbucks’ advantages, from where we can innovate.”

Luckin coffee vs Starbucks

So far, Luckin has opened 809 stores this year that is spread across major cities in China. The British coffee brand Costa has 449 outlets since entering China in 2003 and Starbucks has the lead with 3,124 since entering China in 1999; while Luckin targets to open 2,000 by the end of this year.

Unlike their rivals boasting of Stand Alone stores, Luckin has taken a non-traditional approach of opening their outlets in unusual locations including, hidden inside office buildings or just off busy streets. As of June 44% of Luckin’s locations were dedicated for takeaways and the comany has forged a partnership with courier service provider SF Express offering a 30-minute delivery.

According to the company, in the first seven months alone, total cups sold amounted to 18 million and user retention is 80% in April for stores 3 months or older.  This is primarily achieved by customers ordering via the Luckin Coffee App and accessing deep discounts and promotions such as “buy 2, get 1 free” and “buy 5, get 5 free”.

Luckin recently secured a US$2 billion series A investment.

Watch this space.