The challenge to Starbucks is launched, in just 18 months. In fact, it was only at the end of 2017 that Luckin Coffee was founded in Beijing, the Chinese equivalent of the Seattle giant, which also landed in Italy in 2018 with a very refined store in the heart of Milan, to ratify "peace" and the encounter between different ways of drinking coffee. But Luckin Coffee is serious and on Monday 22nd April has filed its application for admission to the Nasdaq in New York. For now, no other details are known, except the code of the new listed company (LK) and, according to what Bloomberg hypothesized in February, the possible value of the IPO, estimated at a good 300 million dollars.
But even before the Stock Exchange, Luckin Coffee is trying to dethrone Starbucks even in the "real world", investing millions and millions of dollars to open points of sale in China, where the US brand is still the first distributor with a market share of around 58% in 2018. In one year and half, Luckin Coffee has already opened 2.370 points of sale in 28 cities: it doesn't miss much to reach the 3.700 Starbucks stores (in 150 cities), opened however in the span of twenty years. Overtaking is expected by 2019, reaching a total of 4.500 stores, with a growth rate of one new store every 3 and a half hours, while Starbucks will "only" open one every 15 hours, to reach 6.000 brands in 2023 .
Just a week ago, LK reached 2,9 billion in value, thanks to the entry into the capital - among others - of the BlackRock fund, which is also a shareholder of Starbucks itself. In all, the Chinese coffee shop has already raised $550 million to date and has too a less expensive business model than that of its star-spangled rival: the shops are not large and comfortable but much more minimalist and don't even have cash registers, given that coffee is ordered and paid for via the app, and can be consumed quickly or taken away. Prices are therefore lower and Luckin Coffee (which belongs to the Tencent group, also owner of the WeChat app, the Chinese WhatsApp) also offers delivery to the office within 20 minutes.
Starbucks is feeling the competition breathing down its neck so much that in 2018 there was even a legal dispute, with LK accusing the Americans of stipulating exclusivity clauses with some real estate companies that prevent them from renting free premises in Luckin Coffee , and to do the same with many suppliers, asking them to stop supplying the Chinese rival. The competition authority of Beijing must express itself on the case.
