---
title: "From 0 to $10 Billion: How Did Luckin Coffee Create Its Business Miracle?"
description: "Over the past two years, Luckin Coffee has been the most controversial brand in the retail industry. It boldly benchmarked against Starbucks at its inception, drew criticism for 'ambush marketing,' completed its IPO in 18 months, breaking the record for the shortest time to list in the U.S., and gained 40 million transacting users within two years, all linked by data. In less than three years, it opened 4,910 stores, 600 more than Starbucks, which has been in China for 20 years. This article re-examines Luckin's brand-building strategy, its shift to an intelligent retail platform, and its use of Focus Media for brand saturation."
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published: "2020-01-20"
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# From 0 to $10 Billion: How Did Luckin Coffee Create Its Business Miracle?

> Over the past two years, Luckin Coffee has been the most controversial brand in the retail industry. It boldly benchmarked against Starbucks at its inception, drew criticism for 'ambush marketing,' completed its IPO in 18 months, breaking the record for the shortest time to list in the U.S., and gained 40 million transacting users within two years, all linked by data. In less than three years, it opened 4,910 stores, 600 more than Starbucks, which has been in China for 20 years. This article re-examines Luckin's brand-building strategy, its shift to an intelligent retail platform, and its use of Focus Media for brand saturation.

Over the past two years, 'Luckin Coffee' has been the most controversial brand in the retail industry, bar none.
At its inception, it boldly benchmarked against Starbucks, drawing a wave of criticism and accusations of 'ambush marketing' and 'riding on Starbucks' popularity.' After 18 months, it completed its IPO, breaking the record for the shortest time to list in the U.S., and was dubbed 'the pride of the nation for cutting American leeks.'
In just two years, it gained 40 million transacting users, all linked by data. In less than three years, it opened 4,910 stores, 600 more than Starbucks, which has been in China for 20 years.
Subsequently, Luckin Coffee completed supply chain integration in a short time, expanding into multiple categories including coffee, fruit tea, light meals, and pre-packaged goods, integrating 14 top global suppliers such as PepsiCo, Nestlé, Fonterra, Yili, Mengniu, and Orion into its supply chain system.
Now, just 8 months after listing, its stock price has risen over 160%. As of 16:00 EST on January 15, Luckin Coffee's market value reached $11.007 billion.
Recently, Luckin launched its intelligent unmanned retail strategy, introducing the unmanned coffee machine 'Luckin Coffee Express' and the unmanned vending machine 'Luckin Pop.'
As a local retail brand, Luckin Coffee has carved a path from being 'looked down upon,' 'not understood,' to 'invisible' in brand growth.
Luckin Coffee deserves to be re-evaluated.
**-01-**
**Re-evaluating Luckin**
Is Luckin Coffee a coffee company? Obviously not just that.
On January 8, Luckin Coffee held its first press conference of 2020, launching the unmanned coffee machine 'Luckin Coffee Express' and the unmanned vending machine 'Luckin Pop.'
'The more, the better; the denser, the better; no upper limit,' emphasized Luckin Coffee CEO Qian Zhiya. In the future, Luckin retail terminals will enter more and more scenarios, covering offices, campuses, airports, stations, gas stations, highway service areas, and communities, complementing and supplementing existing Luckin stores.
According to research data from Guosen Securities, China's coffee consumption is growing at about 15% annually, with per capita consumption cups having 150% growth potential in the next five years, indicating a period of long-term incremental growth.
But Luckin Coffee's ultimate goal is not just to be a coffee company. Qian Zhiya stated at the press conference: 'Luckin is building a smart retail platform with 'own traffic + own products.''
Coffee, a high-frequency, high-margin consumption scenario, is just a powerful entry point for Luckin. Luckin's ambition is to build an intelligent retail ecosystem with massive traffic, a wide range of products, and efficient operations.
As stated in Luckin Coffee's prospectus: 'Our goal is to become part of everyone's daily life; coffee is just the beginning.'
At last year's 'Top Ten Economic Figures of the Year' awards ceremony, Luckin Coffee CEO Qian Zhiya was named one of the '2019 Top Ten Economic Figures.' As an investor in Luckin Coffee and founding partner of Joy Capital, Liu Erhai delivered a speech, saying that Luckin Coffee 'is technology-driven, data-centric, and has pioneered an 'unlimited scenario' operating model, fundamentally changing the transaction structure and user experience of the traditional coffee industry.'
Liu Erhai previously stated in a media interview: 'On the surface, Luckin is a coffee company, of course. But the most important thing is the supply chain and data.' These are Luckin Coffee's two core advantages. With a solid supply chain, product quality is guaranteed; with strong data analysis, marketing and user experience become precise and effective.
Beyond coffee, Luckin is also continuously expanding its categories, including Xiaolu Tea, own-brand products, and third-party FMCG products, all available through offline unmanned coffee machines and online e-commerce.
Well-known tech commentator Yan Yuelong said: 'Luckin Coffee is a SaaS platform. Luckin Coffee's success lies in stepping out of coffee to do coffee, returning to the essence of users, and using technology to innovate the supply chain. Thus, Luckin has transcended coffee; if it can succeed in coffee, it can succeed in other things as well.' Luckin Coffee is accelerating its brand vision: starting with coffee, making Luckin part of people's daily lives.
Meanwhile, Luckin Coffee's store expansion is also accelerating. According to data from U.S. data company Thinknum, as of December 16, 2019, Luckin Coffee had 4,910 stores in China, 600 more than Starbucks during the same period.
Next, Luckin Coffee aims to open 10,000 stores by the end of 2021.
**-02-**
**Brand is the Stable Traffic Pool**
Luckin Coffee's emergence as the world's fastest listed company, setting a global record, is fundamentally due to capturing people's hearts.
From its inception, it sparked a blue wave in elevator TV posters. Besides the strong visual impact of the little blue cup and the little deer head, the highly relatable slogan 'Who doesn't love this cup?' featuring Tang Wei and Zhang Zhen, created a consumer impulse, coupled with its integrated offline and online marketing strategy.
Good brand building relies on super symbols, super slogans, and simple, direct repetition. Behind Luckin Coffee's brand success, there are many lessons to be learned.
First is the heavyweight offline Focus elevator media. Initially, Luckin Coffee had 1 billion yuan in startup funds, invested 300 million in Focus, and only cooperated with Focus Media offline, accounting for up to 90% of the total budget.
Luckin Coffee CMO Yang Fei once explained: 'Offline, we focus on Focus elevator ads, which is the most efficient traditional media model for brand building, with strong compulsion and repeated viewing. In terms of placement, we choose major urban office buildings and communities, regardless of delivery areas. First, our store opening speed is fast, so we can preheat; second, consumers' consumption radii are diverse, so brand placement prioritizes broad coverage.'
Second, online WeChat fission. While placing Focus elevator ads, Luckin Coffee directed traffic online through QR codes on the ads, using tactics like free first order for app downloads and registrations, buy-one-get-one offers, and old users referring new users, leading to explosive growth. This also effectively improved operational efficiency and reduced intermediate costs.
As a result, within just one month, the Luckin Coffee app's download ranking soared from 70th to first in the food and beverage category. Its WeChat index grew more than tenfold and continued to break industry records.
Looking at media development over the past two years, TV viewership has significantly declined, with an aging audience. Internet video paid membership has reached 300 million users, and paying 20 yuan a month to 'remove ads' has become a trend. In a fragmented and dusty media environment, centralized scenario media resources are very scarce. Luckin Coffee seized on the high visibility of Focus elevator media to achieve brand detonation among mainstream urban consumers in a simple, fast, and efficient way.
Luckin Coffee placed a large number of building ads on Focus, concentrating on detonating among the mainstream urban population. This saturation attack tactic, during consumers' commutes to and from work, formed a brand detonation, elevating the company's awareness, recognition, and brand momentum to new heights. As Luckin Coffee CMO Yang Fei said, 'Brand is the most stable traffic pool.'
As Luckin matures, it needs saturated brand exposure even more. First, brand is the strongest moat. The retail industry evolves rapidly; without lasting confidence and ambition, and without long-term investment in the brand to repeatedly reinforce consumer mindshare, long-term victory cannot be achieved.
Second, let the brand accompany users continuously. After gaining a large number of users in big cities, Luckin Coffee persistently uses Focus Media at the elevator entrances of apartment buildings and office buildings that users pass daily to remind them: 'Haven't had a cup made by masters today? Have one,' effectively reminding the entire building population, thereby driving sales and cultivating the habit of drinking Luckin Coffee daily.
Luckin is not just coffee, nor does it stop at coffee. From a disruptor in the coffee industry to China's largest coffee chain brand; from a single coffee brand to multi-category expansion; from online and offline to 'unmanned retail' now. Luckin Coffee is proving that in this era, nothing is certain, and all experience and dogma can be broken.
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## Citation metadata

- Publisher: New Distribution
- Author: New Distribution
- Published: 2020-01-20
- Canonical: https://xinjignxiao.com/en/articles/from-0-to-10-billion-how-did-luckin-coffee-create-its-business-miracle-157d7888/
- Original source: https://mp.weixin.qq.com/s/K0iMb4Sizyrvm6b24qs72g

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