Executive Summary

• Coffee shop sales in China hit some ¥30 billion (US$4.4 billion) in 2017, and are expected to reach ¥1 trillion (US$145.9 billion) by 2025,according to consultancy firm Qianzhan.
• Luckin Coffee has moved in quickly to tap into the growing popularity of coffee in what is traditionally a tea-drinking society: The company has grown to over 2,000 stores since opening its first store in January 2018. The coffee chain is leveraging “New Retail” strategies and digitalization to fuel its expansion in China and to challenge market leader Starbucks.
• The company’s rapid expansion is presenting challenges, though: The coffee chain incurred losses of ¥857 million (US$124 million) between January and September, 2018, according to a Sina Technology report.