Luckin Coffee And The Booming Asian Coffee Sector Take A Bite Out Of Starbucks – CoffeeTalk

Luckin Coffee, founded in China in 2017, has experienced rapid growth and is now the largest coffee chain in China. Its success has spawned high-growth competitors, with investors pouring money into Asian coffee chains, fueling the growth of several chains. Cotti Coffee is right behind Luckin and has just surpassed 10,000 locations in multiple countries. Technomic reports that seven of the 10 fastest-growing Asian chains based on unit count serve coffee, with only one being a western brand.

The growing demand for coffee was evident at FHA-HoRe-Ca, a restaurant exhibition in Singapore, which included a large area devoted to purveyors of coffee and equipment. Starbucks’ preliminary earnings revealed another 14% decline in same-store sales in China, including a 6% customer count decline. The chain has been banking on China as a major growth market, but those numbers do not indicate a concept that should be growing at all right now.

Luckin has grown in China with aggressive pricing, innovative use of technology, and a lot of small locations catering to takeout consumers. The menu features espresso-based beverages, such as lattes, macchiatos, Americanos, frappes, “refreshers,” a seemingly higher-end “black cup” series, and some clear Asian flavors like the Lemon Americano. The company aggressively hits customers with offers both on its website and its app.

The rapid growth of Luckin and Cotti, along with the clear interest by others in the coffee business in Asia, make the market more difficult for Starbucks, Dunkin’, Tim Hortons, and any other U.S. coffee chain hoping that the market would be easy pickings.

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