How did Luckin Coffee surpass Starbucks in store count?

Luckin Coffee reported 7,846 total stores in the third quarter of 2022, passing Starbucks to become the chain coffee brand with the most stores in China. The figure splits into 5,373 self-operated stores and 2,473 partnered stores. The milestone came a little over a year after the company filed for bankruptcy protection, marking a rapid turnaround.

Drinks such as Coconut Latte and Cheese Latte drove volume; Luckin said Coconut Latte alone surpassed 100 million cups by its first anniversary in April 2022. Social media marketing, holiday co-branding, refined user operations and a young R&D team supported the push. For anyone watching the editor coffee market, the affordable chain model also shows how quickly coffee consumption can spread.

Luckin Coffee delivered an impressive report card in the third quarter of 2022: its total store count reached 7,846, overtaking Starbucks in one fell swoop to become the chain coffee brand with the most stores in China. From filing for bankruptcy protection to completing its turnaround, Luckin took only a little over a year. Behind this were not only the sustained pull of hit products like Coconut Latte and Cheese Latte, but also the combined efforts of social media marketing, reverse holiday co-branding, refined user operations, and a youthful R&D team. This article will analyze Luckin's store data, product logic, marketing tactics, and user strategy, while also exploring the significance of the affordable chain model for the spread of coffee consumption in China. For readers who follow developments in the coffee industry, Luckin's path to breakout is undoubtedly a sample worth studying.

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"Luckin Coffee's store count has already surpassed Starbucks, ranking first nationwide." No one expected Luckin's comeback to be so fast.

According to Luckin Coffee's third-quarter 2022 financial report, Luckin Coffee's total number of stores has reached 7,846, including 5,373 self-operated stores and 2,473 partnered stores. This figure has already surpassed Starbucks, making it the chain coffee brand with the largest number of stores in China at present (Starbucks: I lost, I lost again).

In just this short year, from filing for bankruptcy protection to surpassing Starbucks in store count, Luckin completed a magnificent comeback. As a coffee lover, this editor naturally had to dig into the reasons too~ If I hadn't looked into it, I wouldn't have known—it turns out netizens had already hit the truth:

In April 2022, on the first anniversary of Coconut Latte's launch, Luckin announced that it had already sold 100 million cups (enough cups to circle the Earth several times). Just how good is Coconut Latte—it seems to carry less guilt than milk tea, yet has a bit more freshness than a classic espresso. "A trace of just-right dopamine," netizens described it.

Besides Coconut Latte, Luckin, as a "hit-making machine," also launched an internet-famous new product: Cheese Latte. On the very day Cheese Latte went on sale, sales directly exceeded 1.31 million cups! It became the new "single-item king on launch day" after Coconut Cloud Latte.

In fact, the reason Luckin can make its products go viral and drive sales climbing steadily is not blind-box-style coincidence—there is plenty of calculation behind it.

As everyone knows, Luckin is a master among masters when it comes to social media marketing. On Xiaohongshu, the marketing talk about Luckin is like an encyclopedia.

Luckin really knows what it's doing. On Qixi Festival, it even pulled off a wave of "reverse marketing," teaming up with Pepe the Frog to launch Frog Luckin Strawberry.

Printed on the packaging bags is a heart-hand photo of Pepe the Frog and his girlfriend Cuihua, along with a special "peony" easter egg for single people, wishing consumers happiness and joy whether single or not. This move directly and firmly captured single young people.

And so-called reverse marketing is actually using a huge psychological gap to bring the public a certain sense of incongruity or unexpected surprise.

This co-branding by Luckin stood on the opposite side of Qixi Festival's "couples' carnival," celebrating the holiday for single people. To some extent, this exceeded consumers' expectations, using memes to resonate with young people and earning another wave of goodwill.

Luckin's success is reflected not only in spot-on marketing planning, but also owes to its refined user operations and the speed at which it launches new products.

In terms of user operations, Luckin opened a brand-exclusive livestream room on Douyin, using companion-style livestreaming and high-appearance streamers to complement Luckin's high-appearance hit products, bringing the livestream effect to the extreme.

In the livestream room, various large-value coupons were basically a case of first come, first served. Among them, the 9.9 yuan Thick Milk Latte coupon sold out instantly as soon as it was listed. Netizens said they simply couldn't grab it and hoped the promotions would be increased further. (Best if everyone gets one)

When it comes to coupons, Luckin has never been stingy. Perhaps this is also why many people are willing to buy Luckin products.

And the speed at which Luckin launches new products owes to Luckin's youthful R&D team. Youthfulness has always been an important guideline for Luckin's management. Most of Luckin's employees are young people. They believe that only young people understand young people best, so whether the coffee tastes good still has to be judged by young people themselves.

Every time Luckin develops a new product, it goes through many rounds of internal tasting. One employee said, "The tasting for a new product is divided into many sessions. What ultimately comes out as Matcha Frappe may have started as just a cup of matcha."

Striving through marketing on one side, focusing on user operations on the other, while vigorously launching new products and using young people to attract young people—this is exactly why Luckin successfully completed its comeback.

Looking across China's coffee industry and the public's coffee consumption habits, if you want to develop well, you still have to rely on affordable chain coffee shops. Compared with Luckin, specialty coffee shops and Starbucks may still have slightly less influence.

If you think about it carefully, Luckin's target consumer group may be broader. Most people are ordinary consumers, and their requirements for coffee are not too high. Some even just need it to have a coffee flavor. Therefore, Luckin's extremely high cost-effectiveness still makes a very large contribution to the promotion of coffee consumption in China.

And Luckin Coffee, which everyone once thought would not survive two years, has now successfully entered its sixth year. Luckin's comeback story has only just begun. Its experience is a microcosm of a company breaking out of extreme adversity. Although Luckin may still have countless tough battles to fight in the future coffee market, as a company that reveres the market and is mature and steady, its luck will probably not be too bad.

Image source: Internet

The above content is compiled by CoffeeHunters, a coffee news website.