China's Luckin beats Starbucks in Beijing coffee race

Record sales figures in 2023 with doubled profits in China for the largest local coffeehouse chain. But in the current difficult environment for the Chinese economy, the much lower price of its products also counts.

Beijing (AsiaNews/Agencies) - In the booming local coffee shop market, it is the big Chinese chains that are growing the most, projecting themselves to compete in Asia with the big global brands in the sector.

It has been confirmed by figures for 2023, which mark the leadership in China of Luckin Coffee, which has overtaken the American Starbucks for the first time in sales, as well as in the number of its own establishments in the territory.

In the face of the Chinese people's new passion for coffee, which in just a few years has made the People's Republic the world's largest market, the growth recorded by the Beijing brand in the last twelve months has been impetuous: sales have increased by +87% to reach 24.9 billion renminbi (about 3.5 billion dollars), with profits of 3 billion renminbi (426 million dollars), more than doubled compared to 2022.

The effect of the soaring number of outlets: in 2023, there were 16,248 outlets, 8,034 more than last year, reaching a total of 48.4 million customers. All this while Starbucks in the last quarter of 2023 saw its revenues in China drop by 12.5%.

Luckin's growth, however, is also an indicator of China's economic trend: the local brand has established itself by playing on lower prices. In fact, its drinks cost between 10 and 20 renminbi (.40-2.75), compared to 30 renminbi for Starbucks (.10), which, on the contrary, relies on a perceived better quality.

In today's China - where there is less and less money to spend, especially among the young - being able to save a little on coffee is an important incentive. So much so that even Luckin, precisely in the price war, now has to reckon with other local competitors such as Cotti Coffee, which is growing by focusing on even lower price lists.

The battle is being played out for now in the large Chinese market, but an extension to the whole of East Asia can already be glimpsed on the horizon. For now outside China Luckin is only present in Singapore, where it has opened 30 sales outlets. Cotti Coffee on the other hand is already present in South Korea, Indonesia, Japan, Hong Kong and Vietnam. While figures show that the coffee shop market is also growing strongly in Malaysia and the Philippines.

• China
• Beijing
• coffee
• Luckin
• Starbucks
• coffee shops