By MA Yue
Luckin Coffee's latest financial report shows the Chinese coffee house chain has beaten Starbucks in several key indicators.
For the first time, Luckin made more money than Starbucks. In Q2, total net revenue reached 6.2 billion yuan (US$860 million), while Starbucks' net revenue was US$822 million. Luckin's revenue growth exceeded Starbucks' by a considerable margin.
In terms of store count, Luckin became the first coffee chain in China to exceed 10,000 stores, with a total of 10,836 stores as of the end of the reporting period. However, at the same time, Luckin closed more stores (109) than Starbucks (6).
Following a 2020 financial scandal and subsequent downturn, achieving these results has been no mean feat for Luckin.
Luckin focuses on deliveries, operates smaller stores with fewer staff and has much lower operating costs than Starbucks, which places greater emphasis on store design and experience.
Introduces new products quickly, Luckin Coffee offers a wide range of choices and maintains low prices. At an average price of around 20 yuan, Luckin is more accessible than Starbucks, where a cup of coffee costs around 40 yuan.
Luckin is even offering high-quality coffee for 9.9 yuan per cup to encourage more people to take up the habit. They plan to continue the campaign for another two years.
Starbucks may have introduced coffee culture to China, but Luckin has used its local advantages well, especially in lower-tier markets.
