Luckin Coffee eyes markets in Middle East and India with Americana partnership

By Emma Lee
1 min read
Luckin Coffee founder and CEO, Jenny Qian Zhiya (second from left), Americana Group CEO Kesri Kapur (second from right). (Image credit: Luckin Coffee)

Chinese coffee chain announced on Monday that it has signed a memorandum of understanding with Kuwaiti food company Americana Group for a joint venture to expand its coffee chain business in the Middle East and India.

Why it matters: This is the first time the Chinese coffee chain has announced plans to expand its operations overseas. Luckin’s expansion to the new region will extend its competition with Starbucks to more international markets.

  • Despite its stunning rate of growth, the company is still loss-making. Expansion to more markets will add to financial pressures on the US-listed company.
  • The agreement was signed in Beijing with government officials from both sides in attendance, underscoring government support of the deal, which aligns with Beijing’s Belt and Road infrastructure development initiative.

“This collaboration represents Luckin Coffee’s first step toward bringing its leading products from China to the world. We look forward to further expanding the freshly brewed coffee market internationally as we realize the incredible growth opportunities available to us through our innovative business model.”

—Jenny Qian Zhiya, Luckin Coffee’s Founder and CEO, in an emailed statement

The company declined to provide further details about the partnership when contacted by TechNode on Tuesday.

Context: Facing a slowing local economy and saturating market, Chinese tech giants like Alibaba, Tencent, and more recently Didi are taking notice of the emerging regions in the Middle East and Southeast Asia as key markets to boost the next stage of growth.

  • Founded in 2017, Luckin operates more than 3,000 stores across 40 cities in China and plans to open more than 4,500 stores by the end of 2019, according to the company.
  • Americana Group operates food products throughout the Middle East and North Africa region with capabilities spanning manufacturing, distribution, and restaurant operations. It runs regional franchises for KFC, Pizza Hut, Friday’s, Costa Coffee, and others.