Luckin Coffee, the largest coffee chain in China, posted 1.2% company-owned same-store sales growth for 4q25, which is weak.
During earnings call, Luckin says China’s coffee market is still in a rapid growing phase – is that so?
I think there is still room, but current “coffee intensity” is already like in a mature stage.
Starbucks reward members (35mn) consume 3-5 cups per month.
Luckin members consumes close to 342mn cups per month in 2025 (4.1bn cups annually) and close to 100mn monthly transacting consumers, which translate to over 3 cups per customer per month approximately.
Why there is still room (but may be hard to penetrate)?
1) Luckin’s 450mn customer base means there could be 1.5x to 2x room in China, excluding children and elderly.
2) If Starbucks can get 16k stores in US, Luckin may get up to 4x of that which is over 60k stores in China, or 2x from current 30k stores.
3) Starbucks Reward member is an underestimation of active consumers of Starbucks, which could be like 70-90mn. 4x of that gives you 210-360mn potential which is 2-3x from current 100mn for Luckin.
Why hard to penetrate?
1) lower-hanging fruit / easy regions already have footprint.
2) China has more “layers” of consumers; thus hard to have one-size-fit-all offering. There are more competitions in China. Can’t handle price sensitive and premium customers together.
