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Starbucks Under Attack In China

Courtesy of ZeroHedge. View original post here.

One Chinese company is going down a road of massive losses in a seemingly megalomaniac attempt to operate more stores in China than market top dog Starbucks by the end of 2019.

Beijing startup Luckin Coffee only officially launched in January of 2018 but, as Statista’s Katharina Buchholz reports, has already managed to open approximately 2,000 stores across the country. The Chinese growth objective of 600 new stores per year of their competitor seems tame in comparison – even though it entails opening a new location every 15 hours.

The attack on the Chinese market that is important to Starbuck’s bottom-line is a calculated one. Luckin even threatened to sue Starbucks for monopolistic behavior as part of a PR stunt. China – traditionally a nation of tea drinkers – is currently the country with the most Starbucks stores in the world after the U.S.

By the end of 2019, Starbucks would run 4,121 stores in China if they reach their goal. Luckin hopes to be operating at approximately 4,500 locations by that time.

Infographic: Chinese startup aims to overtake Starbucks | Statista

You will find more infographics at Statista

This extreme growth strategy comes with a price tag – the company was running at a supposed loss of US$ 123 million in 2018. The company, whose products are currently about 20 percent cheaper than Starbucks, reportedly does not have a profitability objective yet and is bankrolled by Chinese and Singaporean investors.


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