Luckin Coffee faces hurdles in US expansion: report

Luckin Coffee is facing new challenges as it expands into the US, according to a report by Momentum Works.

The market has established competitors and different consumer preferences, which may pose difficulties for the Chinese coffee giant.

The report analyzes Luckin Coffee’s business model and global strategy.

Luckin operates over 24,000 stores worldwide and uses an app-focused approach with centralized operations.

Most customer orders are processed through its mobile app, allowing the company to collect data for marketing and product development.

Momentum Works also highlights the brand’s aggressive product innovation, with 119 new items launched in 2024 alone. The firm notes that this fast-paced rollout is part of Luckin’s broader strategy to stay competitive in new markets.

🔗 Source: Momentum Works

🧠 Food for thought

1️⃣ Rapid recovery from scandal demonstrates resilience of tech-driven business models

Luckin Coffee’s comeback story reveals how companies with strong operational foundations can survive major crises through execution rather than just reputation repair.

After being delisted from Nasdaq in 2020 following an accounting scandal, the company has grown from approximately 3,680 stores in 2019 to over 24,000 stores globally today 1 2.

More tellingly, Luckin’s revenue reached $1.3 billion last year with a 36% increase from 2023, and its China revenue surpassed Starbucks for the first time in 2023 3 4.

This trajectory suggests that consumers ultimately prioritize value and convenience over corporate governance concerns when making daily purchasing decisions.

The recovery pattern mirrors other companies that have weathered scandals by focusing on core product delivery, demonstrating that operational excellence can often override reputational damage in consumer markets.

2️⃣ App-first retail model creates sustainable competitive advantages beyond just pricing

Luckin’s technology-driven approach fundamentally changes the economics of coffee retail by eliminating traditional cost centers while capturing valuable customer data.