Business

Luckin Coffee, Starbucks' Main Competitor in China, Is Expanding Overseas

The company is partnering with The Americana Group to expand to India and the Middle East.

22.07.2019 | by Reve Fisher
Photo by Quartz
Photo by Quartz

Luckin Coffee (瑞幸咖啡) is a force to be reckoned with. Although the company is only two years old, experts predict that it will surpass Starbucks’ presence in China, as it is expected to have about 4,500 stores throughout the country compared to the 4,100 or so locations predicted for Starbucks. Now, the rapidly expanding, tech-based coffee chain is looking to expand beyond China’s borders.

Through its partnership with Kuwait-based The Americana Group, Luckin Coffee is planning on extending its coffee retail business to the Middle East and India. Starbucks already has a large presence throughout both areas, with 202 stores in Dubai, 191 in Saudi Arabia, 151 in Kuwait and 146 in India, as reported by CNN.

“This collaboration represents Luckin Coffee’s first step toward bringing its leading products from China to the world,” Luckin CEO Jenny Qian Zhiya said in a press release. “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.”

Luckin Coffee’s business model centres around a mobile app that plays an essential role in the company’s adaptation of a “new retail model,” as all transactions must take place on the app. It is also used to help the company streamline its business, increase its retention rate and better attend to its customers—both in terms of customer service and data collection. The app also facilitates business operations and increases quality control.

The Americana Group runs 1,800 restaurant franchises and 29 food production sites throughout the Middle East, such as Pizza Hut, Kentucky Fried Chicken, Red Lobster, Basket Robbins, Olive Garden, Krispy Kreme and Costa Coffee.

The two companies signed a memorandum of understanding (MoU) in Beijing today to officially run the retail coffee business as a joint venture.

“We at Americana believe this MoU will revolutionize the food and beverage retail industry in the Greater Middle East and India, regions that provide promising prospects for new retail growth and expansion,” said Americana Group CEO Kesri Kapur. “We have worked with many leading and revolutionary food and beverage brands over our history and believe that Luckin Coffee’s superior products, experience and services will deliver success in these regions.”

Tags: Asia, china, coffee, Luckin

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