In 2022, Luckin Coffee’s annual revenue surpassed Rmb 10 billion (US$1.45 billion) for the first time. This year, the Chinese coffee chain aims to establish 10,000 stores despite competition from Cotti Coffee, a new brand launched by Luckin former Chairman, Charles Lu.
Luckin has 8,214 stores at its latest count in end 2022.
Guo Jinyi, Chairman and CEO of Luckin Coffee said, “We are confident about reaching the goal of opening 10,000 stores in 2023.”
At the end of December 2022, Luckin Coffee began efforts to recruit partners in 9 provinces and 41 cities.
Nevertheless, Luckin Coffee is becoming increasingly more expensive for consumers, and it now faces real challenge with the establishment of Cotti Coffee which seems to have the same marketing strategies as Luckin Coffee. In contrast however, Cotti Coffee attracts customers with its competitive pricing from as low as US$1.43 for a cup of coffee while Luckin charges almost double.
Meanwhile, it was reported that Cotti Coffee has already opened 1,300 stores in 181 cities nationwide. It was setup with a registered capita of US$100 million.
In recent years, coffee chains like Starbucks and Luckin have also accelerated their growth in lower-tier cities in China as they hope to take advantage of lower operating costs there. Starbucks, for example, has accelerated its expansion in Northeastern cities, opening more than 50 stores in Shenyang, the capital of Liaoning province. Currently, Starbucks has more than 6,090 stores in China.