The coffee chain industry in China is getting noisy the last two years. This is due Luckin Coffee that has not been existed two years ago, yet now it is catching upon Starbucks pretty quickly. After the surprising US IPO earlier this year, Luckin is to make another big leap with upcoming expansion to Middle East and India.
Luckin’s expansion to Middle East and India
The Chinese coffee chain has just secured a partnership with Kuwaiti Food Company Americana. Together, the two companies are to launch a new retail coffee chain in the Greater Middle East region and India. This is going to be Luckin’s first step to oversea market.
“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.” Kesri Kapur, CEO of Americana.
The Greater Middle East and India has a promising market for food and beverages retail industry. Also, Kapur believes that the collaboration with Luckin will “revolutionize” the industry in the regions.
.Americana itself is a leading company in the food and beverage retail business in the Middle East and North Africa. The company manages a total of 1900 restaurants spread across 13 countries in both regions. As well as operating 25 food production sites in United Arab Emirates, Saudi Arabia, Kuwait and Egypt.
A new tea brand for the home country
Luckin has also recently launched its own tea brand, Xiaolu Tea. As the origin country of tea, tea has a huge market in China. It is one of the biggest tea consumer country in the world. And all variants of tea drinks combined with other ingredients from milk, fruit, tapioca pearl to cheese have been a trend in the country.
Along with the new brand, Luckin also introduced the new ten tea-based menus. The menus have since been included in Luckin’s online menu under the Xiaolu Tea brand.
Luckin itself now operates around 3,000 stores around China and planning to open at least 4,500 stores by the end of 2019. Earlier, the company made its debut in the Nasdaq IPO and raising $561 million.
However, despite the expansion to Middle East and India, the prospect of being profitable is still far out of reach for the company.
Luckin reported a $241.3 million loss in 2018, and at the first quarter of this year, it has already recorded a $80 million loss. This is due to the company’s ambitious store opening and high marketing spending that includes massive discounts.
