Chinese coffee chain Luckin Coffee has opened more than 3,000 new locations last quarter. Revenue rose by more than 50 % in the third quarter, and the chain reached more than 100 million customers per month for the first time.
Full steam ahead
For the quarter ending 30 September, total net revenue rose 50.2 % to 15.287 billion Chinese yuan (1.97 billion euros). All other figures are also impressive: + 48.1 % in gross transaction value, + 14.4 % in sales in existing stores, + 40.6 % in customers served.
In addition, operating profit rose by 12.9 % to 1.776 billion yuan (230 million euros), while net profit fell by 2.7 % to 1.278 billion yuan (160 million euros) – mostly due to all the investments.
Following in Starbucks’ footsteps
The chain opened 3,008 stores in July, August and September, which is another 50 % more than the already impressive 2,085 new outlets in the second quarter. A cashless model, where customers can only order via an app, is the main driver behind the tremendous speed with which Luckin is able to expand.
2,979 of the 3,008 stores opened were in China, where the vast majority of the nearly 30,000 locations are still located. The other openings this quarter were in Malaysia (21), Singapore (5) and the United States (3). The chain only opened its first American stores in July and now has five locations in the country.
Luckin is currently about 10,000 locations behind Starbucks, but at its current rate of growth, it could close that gap in a year — especially if the chain also manages to pry Costa Coffee away from Coca-Cola.
