How Did Luckin Coffee Reach 10 Billion Yuan in a Quarter?
Luckin Coffee reported third-quarter 2024 net revenue of 10.181 billion yuan, up 41.4 percent year on year and the first time quarterly revenue passed the 10-billion-yuan mark. Operating profit reached 1.557 billion yuan at a 15.3 percent margin, and net profit came in at 1.303 billion yuan.
The store network grew by a net 1,382 locations in the quarter, ending at 21,343 stores, split between 13,936 self-operated and 7,407 partnered outlets. Singapore added 8 stores for a total of 45. A mature supply chain and steady product launches backed the expansion, which keeps Luckin at the top of China's coffee industry by store count.
On October 30, 2024, Luckin Coffee released its third-quarter financial report, with total net revenue for the quarter reaching 10.181 billion yuan, a year-on-year increase of 41.4%, marking the first historic breakthrough of quarterly revenue exceeding 10 billion yuan. Alongside revenue growth, operating profit and net profit also performed steadily. The store network continued to expand to 21,343 locations, maintaining its position as the leader in China's coffee industry, with both self-operated and partnered store revenues achieving double-digit growth. This was supported by a mature supply chain system and continuous product innovation. This article will analyze the reasons behind Luckin Coffee's quarterly 10-billion-yuan achievement from the perspectives of financial data, store expansion, operational models, and product strategies, while also examining its future growth potential.
On October 30, 2024, Luckin Coffee announced its financial report for the third quarter of 2024, quickly becoming a focal point of market discussion.
The report showed that Luckin Coffee's total net revenue for the quarter reached 10.181 billion yuan, a year-on-year increase of 41.4%. This was the first time its quarterly net revenue exceeded the 10-billion-yuan mark, setting a historic high. Under GAAP, Luckin Coffee's operating profit for the third quarter was 1.557 billion yuan, with an operating profit margin of 15.3%. Meanwhile, net profit also reached 1.303 billion yuan.
Store network continues to expand, firmly holding the industry's top position
Luckin Coffee further increased its store count in the third quarter, with a net increase of 1,382 stores. By the end of the quarter, the total number of stores reached 21,343, including 13,936 self-operated stores and 7,407 partnered stores, maintaining a leading position in China's coffee industry. In international markets, the Singapore region expanded steadily this quarter, with a net increase of 8 stores, bringing the total to 45 stores by the end of the quarter.
In October 2017, Luckin Coffee's first store opened in Galaxy SOHO; in November 2023, Luckin's 10,000th store landed in Siming District, Xiamen; in July 2024, with the opening of Luckin's Beijing Zhongguancun In-Hand flagship store, Luckin Coffee officially entered the ranks of 20,000 chain stores.
From the first store to the 10,000th, Luckin took six years; from the 10,000th to the 20,000th, the interval was only 8 months. In recent years, Luckin's store expansion speed has been evident to all.
Store operation model is increasingly mature and replicable
The financial report showed that Luckin Coffee's self-operated store revenue in the third quarter was 7.501 billion yuan, an increase of 45.9% from 5.141 billion yuan in the same period of 2023. The third-quarter store-level profit for self-operated stores was 1.746 billion yuan, with a store-level profit margin of 23.3%, compared to 1.185 billion yuan and a store-level profit margin of 23.1% in the same period of 2023. Partnered store revenue in the third quarter was 2.341 billion yuan, an increase of 27.2% from 1.841 billion yuan in the same period of 2023.
Behind the operation of Luckin's 20,000 stores is a complete mature supply chain system. At present, Luckin has built two major roasting bases in Fujian and Jiangsu, and its fresh fruit processing plant in Baoshan, Yunnan, has also entered the trial operation stage, achieving full-chain coverage from fresh fruit processing to stores. In the third quarter, Luckin Coffee's innovation production center in Qingdao officially began construction. Once completed, together with Luckin's two major roasting bases in Pingnan, Fujian, and Kunshan, Jiangsu, it will form a roasting supply network with an annual capacity of 100,000 tons.
Continuous product innovation
Against the backdrop of increasingly fierce competition in the domestic market, Luckin Coffee maintains a high-frequency new product launch pace. According to statistics, Luckin launched a total of 102 new products in 2023, and the number of new products in the first three quarters of this year was 22, 30, and 28, respectively. At the same time, centered on the concept of "coffee in the morning, tea in the afternoon," Luckin strives to meet consumers' diverse needs, enabling its product line to achieve all-day and all-scenario coverage.
When launching new products, Luckin often uses cross-brand collaborations to attract consumers from different circles. According to incomplete statistics, this year Luckin has partnered with The Tale of Rose, Pop Mart, Dream Star, Black Myth: Wukong, Butterbear, and others.
Continuous store expansion, an increasingly mature operating model, and ongoing product innovation have together driven Luckin's steady performance growth and are the core factors behind its quarterly revenue exceeding 10 billion yuan. It is also understood that after the financial report was released, Luckin closed at $26.5, up more than 10%, which also shows that the capital market holds a positive attitude toward Luckin's future development.
Image source: Internet
The above content is compiled by CoffeeHunters, a coffee news website.
