% Arabica currently operates 118 stores across 17 countries, including 61 in its largest market in China | Photo credit: David Kristianto

Lucky Ace International Ltd., which operates Japanese boutique café group % Arabica in China, is reportedly seeking to raise $300m to support its expansion plans in the country. 

According to a Bloomberg report, Lucky Ace International, formed in 2016, was valued at approximately $900m in its last funding round. 

Since launching its first store in 2014 in Kyoto, Japan, % Arabica has developed an international network of licenced stores. 

The boutique café group currently operates 118 stores across 17 countries, including 61 in its largest market in China, where it launched in 2017 with two Hong Kong outlets. The boutique café also has planned outlets in Vietnam, Taiwan, South Korea, Canada, Mexico, Spain and the Philippines. 

% Arabica has also attained investment from Hong Kong-based Pacific Alliance Investment (PAG), which has interests in Australia’s The Cheesecake Shop and Craveable Brands, as well as China’s Nayuki's Tea. PAG acquired Japanese restaurant group Gyro Holdings in November 2021. 

Despite fresh Covid-19 trading restrictions being introduced in several regions at the start of July 2022, China remains an important growth market for both international and domestic coffee chains, with World Coffee Portal forecasting the branded café market will exceed 36,000 outlets by 2025. 
 

In March 2022, boutique US café group Blue Bottle Coffee made its debut in mainland China with a café in Shanghai.  

More recently, in May 2022, technology-led coffee chain Luckin Coffee achieved its first ever operating profit, while Starbucks China CEO Leo Tsoi said in June 2022 that the Seattle-based chain is targeting 6,000 stores in the country by the end of 2022.  

The chains operate 6,580 and 5,360 stores in China respectively. Both remain well ahead of competitors including the UK's Costa Coffee, which has over 400 stores, as well as Canada's Tim Hortons and domectic chain Manner Coffee, which both have over 300 stores.