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Chinese startup is taking over regular coffee shops

Coffee is well known to drink very much and almost everywhere. For consumption, there are coffee around the world and for the trendy modern people, of course, coffee house chains. There are so many things worldwide.

For example, in Canada, Japan, China and UAE, there are Blenz Cofee, in India, Sri Lanka and UAE Barista Coffeehouse, in Austria Aida and Campus Suite. Some are also represented in Germany. Here you know aran (in southern Germany), Black Bean (mainly in Bavaria), Campus Suite, Coffee Fellows, Meyerbeer Coffee, Woyton and of course everywhere Starbucks!

Starbucks is a Seattle-based company. Starbucks buys, roasts and sells coffee beans through its owned and licensed coffee houses (totaling 15,000) in approximately 50 countries. Starbucks is known and found relatively often. Also in China, of course. In fact, coffee consumption is also on the rise in this country and even here the fight for market dominance is getting tougher. Now even a startup wants to dock with the top dog Starbucks.

Competition for Starbucks

For Starbucks, China is a major market. Shanghai is even said to have the largest Starbucks branch in the world. In cities like Beijing or Shanghai, there is a Starbucks on almost every corner. Especially the young Chinese are literally trying to get a job with the coffee house chain from the USA. The brand is especially popular in the so-called Middle Kingdom.

But now it wants to know a Chinese competitor, and the American company to declare war. So the top dog from the provider Luckin is now to be displaced to second place. The company is said to have announced that it would like to open 2,500 new stores later this year.

Overall, then the Chinese startup would have 4,500 coffee houses. By contrast, the US group currently has 3,600 of them. Only Starbucks already announced in December last year that the presence in China should be spread. The number of stores is expected to rise to about 6,000 (in about 230 cities) over the next four years. That would mean that the presence could almost double.

Luckin can cost his expansion a lot

Luckin now wants to invest a lot in order to reach the self-imposed goal. This should probably be taken into account losses. You have to keep in mind that the Chinese coffeehouse chain started just a year ago and still managed to grow so fast. Here it should be especially the discounts that attract the Luckin customers.

Luckin chief strategist Yan Fei has said that at the moment it’s all about size and speed. It should not make any sense to talk about profits. It is said that last year, the minus to equivalent to about 100 million euros (800 million yuan) should have amounted. Luckin is to be supported by the sovereign wealth fund GIC from Singapore and the Chinese investment bank CICC.

It is said that at the last round of financing Luckin collected $ 200 million from investors. Luckin would be worth about 2.2 billion dollars. It looks like the startup for Starbucks has actually turned out to be the strongest competitor in the People’s Republic of China.

Published inStartupsTechnology

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