Lucky surpasses Starbucks in revenue!

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On August 1, Lucky released its results for the second quarter of 2023 (April-June), surpassing Starbucks China in revenue for the first time.

According to the financial report, Luckin Coffee's total net income in the second quarter was 6.2014 billion yuan, an increase of 88 percent over the same period last year. Under US accounting standards, operating profit was 1.173 billion yuan and operating profit margin was 18.9 percent, a record high.

In the same trend as revenue growth, perhaps thanks to the launch of the new policy of "joining stores with stores", Ruixing opened new stores in the second quarter. A total of 1485 new stores were opened, an increase of 15.9% from the previous month. By the end of the second quarter, the total number of lucky stores had reached 10836, including 7188 self-operated stores.

Notably, Starbucks subsequently reported its latest quarterly results. At the end of June, Starbucks China's revenue from April to June was $822 million, or 5.96 billion yuan, up 51 per cent from a year earlier. In other words, after breaking the record number of stores and surpassing it, Ruixing surpassed Starbucks in revenue for the first time to become the largest chain coffee brand in China.

In June this year, with the completion of the flagship store on Zhongshan Road in Xiamen, Luckin Coffee reached a milestone of 10000 stores in the Chinese market, becoming the first chain brand in the Chinese coffee market to break through 10,000 stores. At the same time of the opening of Wandian, Ruixing also issued a special activity of "Wandian celebration" to give back to consumers "9 yuan and 9 drinks of coffee a week".

According to media reports such as China Finance and Economics, with regard to the record profit performance in the second quarter of this year, Luckin Coffee Chairman and CEO Guo Jinyi said that in the second half of 2023, it will increase investment, focus on customer value, and turn the advantage of scale into long-term feedback to consumers.

Guo Jinyi also revealed that the number of consumer users has reached a new high since Ruixing's 9.9 yuan feedback campaign was launched in June, and the number of consumer users exceeded 50 million in June. On social media, a group of lucky workers complained about the collapse after the store celebration, which is also a testament to the popularity of the "9.9 era."

In order to further help expand Lucky's market share and brand influence, Ruixing has decided to normalize the 9.9 activities for at least 2 years. When it comes to the impact of the price war on performance, Guo Jinyi said frankly that Lucky has the ability to control the performance-to-price ratio while keeping profit margins within a reasonable range.

In addition to maintaining a long-term discount of 9.9 yuan, Ruixing will continue to promote overseas expansion. However, under the trend of promoting overseas expansion, Ruixing has not implemented the same low-price strategy as in the domestic market, which has attracted a lot of complaints from consumers.

And compared with the local cheap coffee chain Flash Coffee, Lucky's price is about twice as much.

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