Chinese coffee shop operator luckin coffee has sued Starbucks for monopoly, according to a message by luckin coffee Vice President Guo Jinyi posted on the Chinese social media platform WeChat on Wednesday morning [16 May 2018]. Guo’s post included a notice from a Chinese court indicating that it had accepted the case…Full Article: May 2018

Key Point

  • In May 2018, Luckin Coffee accused Starbucks of breaking anti-monopoly laws by forcing commercial property owners to not lease to other businesses where more than 30% of their operating income originates from coffee products or if their store name contained the word “coffee”. Luckin also accused Starbucks of pressuring coffee suppliers to not supply potential competitors.

ChinaAg Comments

  • By early May 2018, Luckin Coffee had 525 stores (located across 13 cities), 231 of which were delivery stores. At the times, a large latte was CNY 24 (USD 3.70) per cup, which was roughly 20% cheaper than those sold in Starbucks.
  • Founded in October 2017 (in Beijing) and headquartered Xiamen, Fujian Province, Luckin Coffee (aka Ruixing Coffee, 瑞幸咖啡) is a coffee chain that operates sit-down cafés, carryout only stores, and delivery only stores. By the end of 2017, Luckin Coffee had approximately 300 stores in mainland China. The coffee chain was founded by the chairman and CEO of UCAR Group, a riding sharing app that managed 300,000 cars across 300 cites (as of June 2018). Both UCAR Group and Luckin are headquartered in Siming District, Xiamen.
  • By the end of 2016, China had approximately 85,000 coffeehouses (16,000 in 2007).
  • From 2015 to 2016, according to the Qianzhan Industry Research Institute, China’s coffeehouse industry revenue increased to CNY 19 billion (USD 3 billion), or by 13%.

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