CHINA – Luckin Coffee, China’s largest coffee chain by store count, has announced the grand opening of its 20,000th outlet in Beijing.
This marks a significant achievement in the company’s rapid expansion across the country. The new store boasts small roasters and fully automated digital pour-over coffee machines, offering customers a diverse and elevated coffee experience.
The Beijing outlet is built to LEED ID+C v4 Platinum standards, underscoring Luckin Coffee’s commitment to sustainability.
The company already operates three LEED Gold-certified stores in China, demonstrating its dedication to environmentally friendly practices.
“Luckin Coffee’s growth and development have been fueled by the support of more than 230 million customers and the dedication of 110,000 Luckin employees. Looking ahead, we will continue to strive towards becoming an outstanding, world-class coffee brand that lasts for centuries,” said Chairman and CEO of Luckin Coffee, Guo Jiny.
Luckin Coffee’s extensive store network primarily consists of delivery and pick-up-only locations, which has helped the brand capture a significant market share in China. This expansion strategy has contributed to the opening of 1,442 stores since the first quarter ending March 2024.
In addition to its domestic presence, Luckin Coffee operates 32 stores in Singapore and has plans to enter the Malaysian market through a master franchise agreement.
To bolster its supply chain, Luckin Coffee has signed a Memorandum of Understanding (MoU) with the Brazilian Trade and Investment Promotion Agency.
This agreement will enable the company to purchase up to 120,000 tons of coffee from Brazil over the next two years, in a deal valued at approximately US$500 million.
The company sources premium coffee beans from top-producing regions worldwide, including Brazil, Ethiopia, and Yunnan, China, to ensure a consistent and high-quality coffee supply across its 20,000 stores.
Despite its impressive growth, Luckin Coffee reported a negative operating margin of 1 percent in the first quarter of 2024.
The escalating price war in China’s coffee industry has impacted the company’s profitability, despite a 41.5 percent increase in revenue compared to the same period in 2023.
Total net revenues for the first quarter were RMB6,278.1 million (US$869.5 million), driven by an increase in the number of products sold, the expansion of stores in operation, and a rise in the number of monthly transacting customers.
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