Luckin Coffee Entering Malaysia With Unconventional Partner – CoffeeTalk

Luckin Coffee, a Singaporean coffee brand, has entered the Malaysian market through a joint venture with a locally listed company, Hextar Industries Berhad. Hextar Industries Berhad signed an agreement with Luckin Singapore Holdings, granting it exclusive franchise rights to operate Luckin Coffee in Malaysia. Operations are expected to begin in January 2025. Hextar Industries Berhad has established a subsidiary, Global Aroma Sdn. Bhd. (GASB), which has the exclusive rights to operate Luckin in Malaysia. GASB was registered back in July with an initial paid-up capital of just 1 Malaysian Ringgit and is wholly owned by Hextar Industries Berhad.

Hextar Industries Berhad does not specialize in chain restaurant operations. Major Shareholder Eddie Ong, who oversees nearly ten listed companies, has built his career by expanding his family’s agricultural chemical distribution company into diverse industries over the past two decades. Hextar has acquired dozens of companies and bought over a rubber glove company just before the pandemic.

Some F&B friends of Momentum Works Community raised questions about why Luckin chose to partner with a more seasoned F&B operator, like Berjaya Group, which successfully brought international brands like Starbucks to Malaysia. Luckin’s choice makes sense as they can overcome local operational challenges by hiring the right people. Experienced traditional F&B players might have differing visions for brand expansion, operational methods, and the pace of expansion, which could lead to friction.

The success of Luckin’s partnership with Hextar Industries Berhad will depend on how well both parties align and respond to challenges during the collaboration. Malaysia is a promising market, with an estimated modern coffee market size of US$364 million. The Malaysian chain coffee market has seen significant changes in recent years, with local startup Zus Coffee expanding to over 500 stores and entering the Philippines. Indonesia’s Kopi Kenangan has opened over 70 stores in Malaysia, while traditional coffee chains like Bungkus Kaw Kaw cater to a different demographic.

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