The group, with its two divisions, operates restaurants in 13 markets and 25 food production sites across the UAE, Saudi Arabia, Kuwait, and Egypt, offering the safest, most reliable and best quality food to consumers in over 20 markets within the MENA region and beyond. Luckin Coffee Inc. NASDAQ: LK has pioneered a technology-driven new retail model to provide coffee and other products of high quality, high affordability, and high convenience to its customers.
Founded in and headquartered in Xiamen, China, today, Luckin Coffee operates over 3, stores across 40 cities in China. The Company plans to open more than 4, stores by the end ofwhich would make it China's largest coffee chain.
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Luckin Coffee, the Chinese coffee brand that is challenging Starbucks dominance in China, has announced plans to expand globally starting with India and the Middle East.
Crazy cheap cappuccinos: China's Luckin Coffee chain goes public
The Beijing-based start-up has inked a deal with international food group Kuwait Food Company, known as Americana Group, to launch a joint venture coffee business to help its international expansion. The month old company, which focuses on technology, discounts and fast delivery, currently operates 3, stores across 40 cities in China and plans to open 4, outlets by the end of Starbucks currently has 3, stores in cities across China.
We look forward to further expanding the freshly brewed coffee market internationally as we realize the incredible growth opportunities available to us through our innovative business model. Become a member to get access to:. Want to read this article and others just like it? All you need to do is become a member of The Drum.
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Artificial Intelligence. Augmented Reality. Beyond the Brief. Brand Love. Brand News.At the end of December, the Chinese company operated 4, locations in China.
That was up from 2, at the end of June and topped the more than 4, locations Starbucks has in China. Average per-person coffee consumption in China is estimated to be five cups per year, compared cups in the U. The potential to sell more and more java to Chinese customers, in particular the country's million millennials, has Luckin and Starbucks expanding in the country.
Thanks to a surge of marketing efforts, a growth-first business model, and heavy spending, Luckin quickly expanded across China. Luckin locations are often smaller than Starbucks -- even without seating in some cases. The chain has "delivery kitchens" and "relax stores," but most of its locations are "pick-up stores" as the company aims for a cashierless experience.
The success of this new model has prompted Starbucks to increase its delivery efforts in China, and it recently partnered with Alibaba Group Holding 's Ele. Luckin also features meals, juices, and teas, all of which carry a lower profit margin than coffee. During the third quarter ofLuckin saw a gross margin of The increase was due to a higher average selling price.
In addition, Luckin recently announced a partnership with Kuwait-based Americana Group to open locations in India and the Middle East, continuing the barrage of store openings, steep customer acquisition costs, and heavy marketing costs.
Coffee Business Intelligence projects 7. Several factors make Luckin a compelling company for growth investors. If coffee consumption projections are correct for China, both Luckin Coffee and Starbucks will benefit. While there will surely be a head-to-head battle between the two companies for market share, Luckin is strategically aligning itself to capitalize on the growth.
Justin Cardwell TMFcardwell.Luckin Coffee ($LK) Fraud is Real. A Story about Short Seller hunting for Tesla and the likes.
Jan 19, at PM. Image source: Getty Images. Stock Advisor launched in February of Join Stock Advisor. LK Luckin Coffee Inc. Related Articles.A special committee discovered Jian Liu and employees reporting to him falsified sales adding up to 2.
Investors can no longer rely on Luckin's guidance and earnings metrics for the nine months ended September, the company said. The company has since suspended the individuals involved in the misconduct and will pursue legal action against them. Read more: A new survey of pro investors shows experts are looking to buy stocks again. Here's what 9 of them had to say about where they're putting money to work.
Luckin's internal investigation is in a preliminary phase and an independent auditor still needs to confirm the scope of the sales fabrications. Some costs and expenses were also "substantially inflated" by falsified transactions, the company said in the filing. Analyst firm Muddy Waters Research shared its short bet against the Starbucks competitor in January, according to CNBCcalling its business fraudulent and "fundamentally broken.
The Chinese coffee chain was founded in October and made its public trading debut on the Nasdaq in May.
Now read more markets coverage from Markets Insider and Business Insider:. Dow climbs as US unemployment filings hit 6. These 3 kinds of stocks will be ripe for the picking in the second half ofUBS says. Buy these 14 stocks flush with the cash reserves to survive a prolonged coronavirus crisis, BTIG says. Markets Insider. Ben Winck. A special committee discovered Jian Liu and employees reporting to him falsified sales totaling 2. The company has suspended the individuals involved and will pursue legal action against them, Luckin said in the filing.
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All rights reserved.Luckin continues to expand at jaw-dropping speed as it announced plans to open shop overseas for the first time. On Monday, the Starbucks challenger from China said it has signed a memorandum of understanding to set up a joint venture with Americana Group, a major international food group. The deal will see Luckin launch a new retail coffee business in the Greater Middle East region and India, said the company that in May took public its month-old business.
Its partner has a far longer track record. Luckin did not provide further details of this new venture and a spokesperson for the company declined to comment when contacted by TechCrunch.
For one, Chinese companies have had a growing presence in the Middle East and India in recent times as Beijing puts forward its Belt and Road infrastructure development and investment initiative.
Notably, the MoU between Luckin and Americana was signed with both Chinese and Arab government officials in attendance. Chinese tech giants have already taken notice of the regions.
Alibaba is active in the Middle East with its cloud computing business. These countries are also blessed with emerging middle-class populations, the demographic that Luckin targets back home. In China, the coffee startup is known for shelling out large subsidies to lure millions of tea drinkers into trying its coffee beverages.
Luckin also owns a massive amount of user data, as all orders and payments take place over its app. It can be imagined how the Chinese startup sets out to replicate this digital-first model in places with booming internet populations. The beverage scene is crowded with popular tea brands like Chaayos and foreign players that team up with local companies to gain an upper hand. Even international coffee behemoth Starbucks is no exception as it works closely with Indian conglomerate Tata to operate more than stores.
The startup has indeed recorded months of stunning growth, but it is also facing skepticism from investors who are put off by its continued cash burn with no plans to achieve profitability on the horizon. Luckin is aiming to double its China-based operations from just over 2, locations to 4, byand its new global ambition is set to even further test investor patience.Luckin Coffee, the US-listed Chinese coffee chain that exploded in popularity in just the space of a few years, dropped a major bombshell last week when it said that its employees had been fabricating sales.
The Beijing-based startup revealed on April 2 that an internal investigation found that its chief operating officer and other employees may have forged sales in of as much as 2. The company said it has suspended the relevant employees for further investigation, and formed a special committee to look into the matter. Known endearingly in China as the Little Blue Cup, Luckin—which went public last year—grew from a small chain with nine stores at the end to over 4, by the end of last year, according to an announcement link in Chinese in January.
In comparison, Starbucks has over 4, stores in China. Luckin has touted its success as the result of its tech-driven retail model, which uses data generated from customers to analyze their behavior. In reality, its rapid growth was likely more to do with its heavily discounted prices, where a cup of coffee could be sold at around five to 10 yuan cheaper than at Starbucks.
The sentiment could also be magnified by a broader feeling of acrimony against the US in China which started with the onset of the trade war, and has been further exacerbated by the coronavirus outbreak.
To be sure, not everyone who is rallying to get a cup of Luckin coffee is doing so out of any feeling of national pride. In the near term, support from Chinese customers could help tide Luckin over a difficult period as the company deals with not only the fraud investigation, but slowing sales at home as the pandemic dampens consumer spending.
But the company is already facing a number of class-action lawsuits from US investors, and its troubles are likely to get much worse—and perhaps even hae a knock-on effect on other US-listed Chinese companies as the scandal heightens long-standing worries over accounting standards at such companies.
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Sign me up. Update your browser for the best experience.Chinese coffee chain announced on Monday that it has signed a memorandum of understanding with Kuwaiti food company Americana Group for a joint venture to expand its coffee chain business in the Middle East and India. Why it matters: This is the first time the Chinese coffee chain has announced plans to expand its operations overseas. We look forward to further expanding the freshly brewed coffee market internationally as we realize the incredible growth opportunities available to us through our innovative business model.
The company declined to provide further details about the partnership when contacted by TechNode on Tuesday. Context: Facing a slowing local economy and saturating market, Chinese tech giants like Alibaba, Tencent, and more recently Didi are taking notice of the emerging regions in the Middle East and Southeast Asia as key markets to boost the next stage of growth. Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general.
We are looking for stories related to tech and China. Reach her at lixin technode. More by Emma Lee. This site uses Akismet to reduce spam. Learn how your comment data is processed.
Luckin Coffee Plunging into India, Middle East