Luckin Coffee may just have moved past Starbucks to become China’s biggest coffee chain.
Insurgent Chinese cafe chain Luckin coffee only launched in January last year now has 4,910 stores in China. According to Thinknum Alternative Data, it has already outnumbered its American rival by more than 600 locations.
On the other hand, Starbucks has 4,300 locations in East Asian nation.
It was in November when Luckin’s outlets came to within the same level as that of Starbucks at 4,200 locations. Since then Luckin has been climbing to the top after opening 700 more new cafes. Starbucks has reportedly lagged behind with only 100 new locations.
Luckin’s growth over the last few months can be very much attributed to the stores they opened in remote areas where they have established strong presence. However, it is in contrast to their initial plan of focusing on the country’s large coastal cities.
In May, Luckin began trading on the Nasdaq stock exchange and have posted over $200 million in the third quarter although its losses also increased at close to 10% over the same period.
Generally, Luckin has depended largely on big product discounts as a strategy to attract customers. The company is looking to implement this on a long term basis. While Luckin’s rapid store expansion may be a sign that its sales and revenue will be increasing, other industry analysts remain cautiously optimistic about the company’s future growth prospects.
Luckin has reportedly withdrew a lawsuit against Starbucks, ending a yearlong spat triggered when it sued the U.S. company for allegedly violating Chinese antitrust laws last month.