Luckin Coffee’s swift expansion across China continues, with the coffee franchise opening shops in 14 new cities, including Hefei, Foshan, Shenyang, and Kunming, according to financial news outlet EGSea.
This brings the total number of Chinese cities that Luckin Coffee has landed in to 36, and the startup plans to enter even more—including Zhuhai, Zhongshan, Jiaxing, Guiyang—by the end of April.
Since launching in October 2017, Luckin Coffee has opened over 2,000 stores, and the company set itself a resolution this January to open an additional 2,500 stores across China, reaching a total of over 4,500 locations, by the end of 2019.
Its rapid expansion is part of the plan to become China’s biggest coffee chain by sales and store location, displacing market leader Starbucks, which had 3,600 locations in China in 2018 and plans to reach 6,000 by 2022.
Yet Luckin Coffee’s unapologetic “growth-first” strategy—prioritizing customer discounts, marketing, and store expansions—has come at a marked cost.
The company burned through RMB 857 million (USD 124 million) in the first three quarters of 2018, according to a Sina Technology report, earning just RMB 375 million (USD 54 million) during the same period.
Meanwhile, it raised two USD 200 million rounds last year, in July and December, with the most recent rounds valuing in at USD 2.2 billion.
Meanwhile, rumors of an imminent IPO have gained frequency. In February, Luckin Coffee was reported to have contacted Credit Suisse, Goldman Sachs, and Morgan Stanley about a US IPO.
Editor: Nadine Freischlad