Luckin aims for the top spot of coffee chains in China

Qian Zhiya, founder of the Chinese coffee chain luckin coffee, said during a meeting with the press on Jan. 3 in Beijing, "Our goal is to become the largest coffee chain in China in 2019 by offering our customers products that are characterized by excellent quality, very good value for money and exceptional convenience." She stated that the chain hopes to open more than 2,500 additional locations by the end of the year, bringing the total to over 4,500 nationwide.

Qian Zhiya, founder of lucking coffee, speaks to the press at the company's headquarters in Beijing, Jan. 3, 2019. [Photo/China.org.cn]

Founded only a year ago, luckin coffee has already opened 2,073 stores throughout 22 Chinese cities. The chain boasts 89.68 million coffees sold with a customer satisfaction rate of 99.6%. Its partnership with the mobile services giant Tencent and popular online directory Meituan has helped greatly to boost sales.

However, to guarantee such expansion, luckin recorded a loss of 857 million yuan in 2018, which has fueled concerns about its future development.

Yang Fei, luckin's chief marketing officer, refuted concerns about the company's profits. "We will not be the next Ofo," he said, referring to a Chinese bike sharing company that is said to be close to bankruptcy. According to Yang, luckin predicted this deficit of more than 800 million yuan, which is the natural result of a business strategy aiming to quickly win as many customers as possible by offering significant discounts.

Yang further said that the discount programs will be maintained over the next three to five years, adding that luckin is not worried about a potential loss of customers when those programs end, because cost is not the only element attracting them to buy.

"With an open mind, we take a positive look at honest competition," said Yang. He insisted that 2018 was an important year for the coffee market as a whole in China. "I think that in a few years, the industry will appreciate the appearance of luckin on the market. We are still convinced that fair competition is good for the development of the sector," Yang concluded, expressing regret at the dishonest attacks that have recently targeted luckin.

As for its ambitions for the foreign market, Qian said the chain doesn't have any plans yet to venture abroad. "For the moment, we are focusing on consumers in China," she said.