Remember when bubble tea dominated the streets of Malaysia, particularly in SS15 Subang? Now, it's the coffee industry's turn to shine. Over the past few years, we've seen a surge of new coffee chains emerging.
From the expansion of local favourites like ZUS Coffee and Gigi Coffee to popular clothing brands and local entrepreneurs opening coffee shops within their stores or even from the trunks of their cars, the coffee culture in Malaysia is booming. This surge is giving Starbucks some serious competition, especially amid the current boycott.
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Read: Youthpreneur Coffee Venture: Man Turns His Car Boot Into A Cafe
Chinese Coffeehouse Luckin Coffee To Open In Malaysia
According to reports, Luckin Coffee is set to open its first outlet in Malaysia through a local partner listed on Bursa Malaysia, marking its entry into our local coffee market. This move is part of Luckin Coffee's ambitious expansion plan, which will unfold over the next five years. The Edge also reported that a letter of intent is expected to be signed soon, with a master agreement finalized by July 2024.
For those unfamiliar, Luckin Coffee was established in Beijing in 2017 and has quickly become a major player in the Chinese coffee market. Known for its extensive network of stores and aggressive growth strategy, Luckin Coffee aims to make high-quality coffee convenient and accessible to everyone in China. Currently, the chain boasts over 18,000 stores in China and operates 32 outlets in Singapore, its only other international market.
Luckin Coffee has gained substantial popularity due to its affordability and the convenience of its technology-driven service model, which allows customers to order via an app and enjoy quick delivery services. The brand has made a significant footprint in China, rivalling international chains like Starbucks in both reach and revenue.
In 2023, the company went viral after introducing its Jiangxian-flavored latte, a unique blend of coffee and the Chinese spirit baijiu. The drink's distinctiveness and popularity led to the sale of over 45 million cups by the end of the year, generating sales exceeding RMB 900 million (~RM 585 million).
Though the drink is not halal (for obvious reasons), it certainly gives other chains a run for their money with its unique offerings.
In addition to their Jiangxiang-flavoured latte, Luckin Coffee offers several signature must-try drinks. Their Coconut Latte, blending coconut milk with coffee, provides a refreshing taste. The Big Cheesy Latte, incorporating cream cheese, delivers a unique flavour reminiscent of cheesecake. Another popular choice is the Creamy Dreamy Latte, celebrated for its rich, evaporated milk-like creaminess.
Will The Chain Do Well In Malaysia?
Given the coffee chain's significant success in the Chinese domestic market, experts have mixed opinions about Luckin Coffee's potential entry into Malaysia. On the positive side, the chain could perform well due to its affordability and unique menu, which offers coffee lovers and those with a sweet tooth a variety of dessert-like drinks that stand out from other offerings.
However, some experts believe that Luckin Coffee might struggle to find success in the Malaysian market. Homegrown chains like ZUS Coffee and Gigi Coffee have been thriving, especially as they fill the gaps left by the boycott of Starbucks amid the Palestine-Israel genocide.
In addition to local competition, Luckin Coffee will also face challenges from other established international coffee and café operators already operating in Malaysia, who have a head start in the market.
Admittedly, another coffee chain in Malaysia wouldn't hurt, especially one like Luckin Coffee with its unique drink offerings. This could signal a further decline for Starbucks, a brand once dismissed as a "cheap imitation" of the coffee giant, now poised to be a formidable competitor.
What are your thoughts on this? Let us know in the comments.
*Sources: Visual and Reference Credits to Social Media & various cross-references for context.
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