Luckin Coffee Surges Under CEO Guo, Beating Starbucks in China
Luckin Coffee, under the leadership of CEO and chairman Jinyi Guo since July 2020, has announced significant growth and expansion plans. The company has become China's largest branded coffee chain, surpassing Starbucks in both store count and revenue.
Guo, who previously oversaw Luckin's supply chain, has driven the company's transformation from loss-driven expansion to profit-driven growth. This includes its entry into the U.S. market, focusing on digital empowerment and operational efficiency. The company's success is evident in its Q2 2023 results: a same-store sales growth rate of 20.8% and a monthly transaction count of 43.07 million.
Luckin's popular products, such as the 'Creamy Dreamy Latte' and 'Coconut Latte', have been a hit with customers. The latter sold over 1.31 million cups on its debut day. The company's revenue surged by 88% year-on-year to RMB 6.2 billion in Q2 2023, outperforming Starbucks in China.
Luckin has also introduced an unconventional franchise model, with 247 store applications already approved. The company plans to extend its RMB 9.9 coffee promotion for at least two more years and accelerate store expansion, opening 1,485 new stores in Q2 2023 alone, averaging 16.3 new stores daily. By the end of June 2023, Luckin had reached a total of 10,829 stores. The company's operating profit margin in Q2 2023 was 18.9%, with self-operated stores having a profit margin of 29.1%.
With the domestic coffee market expected to reach a value of RMB 1 trillion by 2025, growing at a 25% annual compound rate, Luckin Coffee is well-positioned for continued growth under Guo's leadership. The company's expansion plans, innovative products, and strong financial performance indicate a bright future in the competitive coffee market.
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