With the inauguration of 478 new locations in January 2023, the largest coffee chain in China, Luckin Coffee, expects to have over 8,400 outlets.
Having previously concentrated on first and second tier expansion in significant, densely populated cities like Beijing, Shanghai, Guangzhou, and Shenzhen, Luckin Coffee is now looking to grow its franchise operations to 41 third and fourth tier locations.
The majority of China’s 1.4 billion people—roughly 70%—dwell in third- and fourth-tier cities.
The current franchise recruitment goals of Luckin Coffee include 33 lower-tier cities, including Qinzhou, Jiamusi, Songyuan, Baotou, Tongliao, Panzhihua, Xishuangbanna, Pu’er, and Sanmenxia.
The company had 7,846 stores at the conclusion of the third quarter, having added 651 outlets over the three months ending on September 30, 2022.
Market leader Luckin Coffee, which has about 8,400 locations nationwide, is expanding more quickly than its nearest rival, Starbucks, which added 69 new locations in the three months leading up to January 1, 2023, to surpass 6,000 locations.
The US coffee chain reported that pandemic trading restrictions caused sales in China to drop 31% to RMB 4.2 billion ($622 million) during the three months that ended on January 1, 2023.
Compared to the same period in 2021, Luckin Coffee’s revenue for the three months ended September 30, 2022, was RMB 3.9 billion ($547.5 million).
The delivery approach and firm’s app, according to the digital-first company, which runs a sizable share of pick-up-only and delivery-only stores, have allowed it to “agilely and flexible” fulfil rising consumer demand.
Luckin Coffee was said to be exploring worldwide expansion in 2023, with Indonesia, Singapore, and Thailand being mentioned as prospective markets.
A chain of coffee shops in China called Luckin Coffee Inc. serves coffee. In 2017, it was established in Beijing. It oversaw 5,671 kiosks as of September 2021. The business runs restaurants, stores, and kiosks that provide food, coffee, and tea. Customers who want to order and pay for drinks online must download an app.
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