Luckin Coffee Gets A Much-Needed Boost as China’s Coffee War Intensifies
In May 2020, Luckin Coffee wasn’t feeling so lucky. An accounting scandal led to the dismissal of executives and an 80% drop in its share price to $1.39, ultimately resulting in its delisting from the Nasdaq. But in just four years, the budget coffee chain has rallied back. Shares are now over $18, it doubled its store count in 2023, and revenue jumped 87%.
- Luckin secured significant private equity funding, fueling its aggressive expansion — now boasting over 18K stores, including some in Singapore.
- However, this expansion has been costly, leading to ballooning marketing spend and its first quarterly loss in two years last quarter.
From tea to coffee? Starbucks’ Chinese business hasn’t lived up to then-CEO Howard Schultz’s lofty hopes. Meanwhile, Luckin has taken the top spot in China thanks to its affordable prices. Starbucks is now discounting to keep up, but it also has to contend with Cotti, an even cheaper rival. Last year, Cotti opened 6.5K stores, including 1.5K in a single month, and it just so happens to be run by Luckin’s embattled former chairman.
