| China

Luckin Coffee plans first international stores in the Middle East and India

Rapidly expanding Chinese coffee chain to establish joint venture with Kuwait-based Americana Group to open stores in the Middle East and India

Since launching in late 2017 Luckin Coffee has opened more than 2,400 stores in 28 cities across China

Chinese co chain Luckin Coffee is seeking international expansion in the Middle East and India. The new retail café and delivery  concept, which has more than 2,400 sites in China, has signed a memorandum of understanding to establish a joint venture with Kuwaiti franchise firm, Americana Group.

“This collaboration represents Luckin Coffee’s first step toward bringing its leading products from China to the world,” Luckin Coffee’s Founder and CEO, Jenny Qian Zhiya, said in a statement.

Americana Group could provide Luckin with a firm footing in the Middle East. The franchise group operates around 1,800 sites for prominent western brands including KFC, Pizza Hut, Krispy Kreme and Costa Coffee, for which it runs around 40 cafés across Kazakhstan, Jordan, Lebanon and Egypt.

Allegra research shows the Middle East’s branded coffee chain market numbers over 9,000 outlets, with burgeoning consumer appetite for aspirational international brands supporting healthy segment growth. Significant outlet growth is expected over the next five years, with the UAE, Saudi Arabia and Kuwait among the region’s most developed coffee markets.

Like Luckin’s native Chinese market, India also has a burgeoning middle-income demographic, with premium coffee concepts representing potentially lucrative investments for international firms seeking growth. India’s coffee shop segment is, however, relatively undeveloped, with limited presence by international chains such as Starbucks and Costa Coffee.

Indicating the market could be poised for development, in June 2019 reports surfaced that US beverage giant Coca-Cola was seeking a stake in India’s largest coffee chain, Café Coffee Day, which more than 1,500 cafes in the vast South Asian nation and a further 250 stores across Europe, Malaysia, Egypt and Nepal.

Since launching in late 2017, Luckin Coffee, also known as Rui Xing, has blazed a trail through the Chinese coffee shop market, becoming one of the country’s fastest firms to attain a £1bn ‘unicorn’ valuation and opening more than 2,400 stores across 28 cities. If Luckin succeeds in its goal to reach 4,500 stores by the end of 2019, the domestic upstart will overtake market leader, Starbucks, which is on track for 4,400 stores.

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