Services
Starbucks Rival Luckin Coffee Surges After IPO
Published:
Last Updated:
Luckin Coffee Inc. (NASDAQ: LK), framed as a primary rival to Starbucks in China, posted a 20% rise in trading to $20.38 on the day of its market debut. Some traders obviously believe that the company has a chance of taking a dominant role in what could become the world’s largest coffee shop market.
Starbucks has roughly 3,700 stores in China. Luckin Coffee has 2,370, but it only started to open them in 2017. On paper, that would indicate the demand for more Luckin locations is extraordinary, almost beyond comprehension. It also begs the question of how Luckin could fund such growth without access to capital from the public markets.
Luckin also has a different business model from Starbucks. Starbucks operations in China are like those in the United States. It is a true coffee shop where people can gather. Luckin is primarily a place where people can pick up coffee. Ironically, this model is like the relatively new Starbucks system, which allows people to order from its app and pick up their orders as they enter the stores and, in many cases, leave with them.
Luckin is betting that there is room for both coffee retail markets in China. Starbucks is too large, too well-branded and too well-financed to go away. No matter how good Luckin’s growth appears, it is still chasing the market leader.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
