Luckin Coffee Eyes Middle East, India Expansion

In its first international foray, Luckin Coffee reportedly plans to open coffee shops in India and the Middle East. The Chinese coffee company signed a memorandum of understanding to forge a joint venture with the Americana Group of Kuwait, Reuters reported.

Luckin Coffee Founder and CEO Jenny Qian Zhiya said in a statement, according to reports, “This collaboration represents Luckin Coffee’s first step toward bringing its leading products from China to the world.” Zhiya added that India, as well as the Greater Middle East, offers promising expansion prospects. The Americana Group currently operates 29 food production sites as well as 1,800 restaurants in the Middle East.

The coffee chain has invested in offering discounts, fast delivery, lower prices and promotions on social media. It has also grown beyond coffee with food items such as Sichuan cold noodles with pulled chicken and grapefruit cheese jasmine tea.

The news comes as it was reported in January that Luckin plans to open 2,500 new stores in China this year to overtake Starbucks in the country. Luckin Chief Marketing Officer Yang Fei said at a presentation in Beijing, according to reports in January, “What we want at the moment is scale and speed. Luckin’s strategy for its fast expansion process has focused on delivery, technology and offering customers steep discounts.”

The coffee chain, however, recorded a loss of $116.34 million (800 million yuan) in 2018, which Fei said was expected. “There’s no point talking about profit,” he said, explaining that subsidies to attract more customers are still an essential part of the firm’s strategy for the next few years.

Luckin plans to open a total of more than 4,500 stores by the end of 2019. That would surpass Starbucks, which has more than 3,600 stores in the country. The company also made its debut on the Nasdaq in May under the symbol of LK.