China’s leading coffee chain, Luckin Coffee is planning a massive expansion in the 4th quarter of 2024 and early next year, as it seeks to diversify out of the competitive China market.
Luckin’s expansion focus is in Southeast Asia and the US. In China, Luckin already has more than 20,000 stores. In Singapore, which it considers as a testing bed for its regional expansion, Luckin already has 38 stores. In the next 3 to 5 years, Luckin aims to expand its operations in neighbouring countries in Southeast Asia with Singapore serving as its regional headquarter.
In the first half of 2024, Luckin was in talk with BJ Food, the franchiser of Starbucks in Malaysia, to form a joint venture for entry into the Malaysian market.
Chinese coffee chains like Luckin Coffee aim to expand overseas and offer their high-value products at affordable prices, competing alongside the more premium western coffee brands.
Meanwhile, a strong supply chain has helped Luckin to trim costs. Since 2019, the company has built 2 roasteries with another one under construction. In June, Luckin announced plans to buy about 120,000 metric tons of coffee beans from Brazil from 2024 to 2025. Brazil is currently one of the most cost-effective coffee bean producing regions in the world.
