Luckin Coffee plans fast expansion to face off Starbucks

Luckin Coffee, a domestic chain seen as an emerging rival of Starbucks in the Chinese market, on Wednesday announced its plan to expand to 2,000 stores by the end of this year.

An industry insider said the fast growth of Luckin may squeeze some market share from Starbucks in first- and secondtier cities, while warning that the company needs to focus on product quality if it wants to achieve sound long-term development.

Luckin started trial operations on January 1 and now has 809 stores in 13 cities across the country such as Beijing and Shanghai.

At an event held in Beijing on Wednesday, Luckin also said it intends to enter the snack market.

Luckin will tie up with three suppliers – UK-based Bakkavor, US-based Bama Companies Inc and China's food group COFCO Corp – to offer snacks such as cakes, salad and sandwiches, which is “a vital part of the coffee industry,” Guo Jinyi, co-founder of Luckin, said at the event.

Working with Chinese express delivery company SF Express, Luckin aims to offer its customers an experience featuring “New Retail” instead of a mere take-out, according to Guo. The average delivery time of each Luckin order is now about 18 minutes.

Luckin is not as widely known as Starbucks among Chinese consumers, but its products are cost-effective and that will help it win more consumers, Liu Dingding, an industry insider based in Beijing, told the Global Times on Wednesday.

Liu said that the fast expansion of Luckin will definitely put pressure on Starbucks, which "may speed up the roll-out of some counter measures to face the competition.”

Starbucks is reportedly set to unveil its delivery service by cooperating with food delivery platform ele.me this month, Beijing Business Today reported on Tuesday.

Liu also said if Luckin wants to gain a firm foothold in the Chinese market, it is expected to highlight the quality of its products.

Luckin on July 11 announced it has secured A-round fundraising of $200 million.