A real roasting: Coffee startup Luckin set to overtake Starbucks in China

A deliveryman carrying bags of coffee walks out a Luckin Coffee in Beijing. Image: AFP/Whang Zhao

After only a year in business, startup Luckin Coffee said Thursday it will open 2,500 stores this year to dislodge Starbucks and become China’s largest coffee chain.

The company said it plans to have more than 4,500 stores in China by the end of 2019, taking it past the US coffee giant, which has over 3,600 stores across the country.

China is Starbucks’ second biggest market after the United States. Luckin has challenged the US coffee chain’s dominance in the country by appealing to tech-savvy youth who prefer to order coffee using their smartphones and have it delivered.

It is also relying on heavy discounts to poach consumers, a tactic used by other homegrown startups such as Didi-Chuxing, a ride-hailing service that dislodged Uber from the Chinese market.

“What we want at the moment is scale and speed,” Luckin’s chief marketing officer, Yang Fei, told reporters on Thursday.

“There’s no point talking about profit,” he said, adding that the company will continue to offer subsidies to attract customers over the next few years.

China’s thirst for coffee has increased in recent years — a trend fueled by young people who have studied or worked abroad.

In 2017, China’s coffee shop sales reached some 30 billion yuan (around US$ 4.4 billion), and are expected to reach 1 trillion yuan by 2025, according to consultancy firm Qianzhan. CC

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