Luckin Coffee makes a remarkable comeback
China's biggest homegrown coffee chain overtakes Starbucks
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Luckin Coffee has overtaken Starbucks in domestic sales in China, according to its quarterly revenue report released last week.
The comeback follows a year of aggressive expansion, pushing low prices and diversified offerings tailored to Chinese consumers.
The 9.9 yuan per cup of coffee deal accelerated Luckin's market expansion. Luckin also made it clear that it plans to continue this. Guo Jinyi, chairman and CEO, said it will be a regular activity, and "continue for at least two years".
9.9元对瑞幸扩大市场份额起到提速作用。瑞幸也明确表态，计划将这一活动继续推行下去。瑞幸咖啡董事长兼CEO郭谨一表示，“9.9元”活动将常态化进行，且“活动将至少持续两年”。 [4]
From April to June 2023, Luckin Coffee earned 6.2 billion yuan ($862 million), an 88% jump on the same period a year ago. The company also surpassed the milestone of 10,000 outlets for the first time.
Starbucks, by contrast, reported a net income for the same period of 5.9 billion yuan ($820 million) from around 6,000 locations across the country.
This marks the first time Starbucks has fallen behind its local competitor in single-quarter earnings.
Founded in 2017, Luckin was once one of China’s most successful unicorns. By 2019, the company had listed on New York’s Nasdaq, raising $600 million through its IPO. But within a year, China’s leading homegrown coffee brand was forced to de-list from the exchange, fined $180 million after admitting it had inflated its earnings and falsified accounting data.
The founders of the business were sacked and a new management team brought in.
In 2020, the founder Lu Zhengyao was removed from Luckin Coffee. The new management immediately cancelled previous large-scale expansion plans and chose to operate in a low-key manner.
2020年，创始人陆正耀被瑞幸咖啡“扫地出门”，新的管理层随即取消了此前瑞幸大规模烧钱扩张的举措，选择低调运营。[2]
This makes Luckin’s turnaround and overtaking of Starbucks even more remarkable.
But its position in China is still precarious. Starbucks remains the dominant brand in China, and there are a number of other domestic coffee chains expanding rapidly.
When it comes to coffee, many people in the past probably thought of Starbucks first, but now Luckin might come to mind. But it may also be Nowwa Coffee or Manner Coffee.
一说起咖啡，过去很多人恐怕第一时间想到的是星巴克，现在可能换成了瑞幸，“也可能是Nowwa（挪瓦）咖啡或者Manner”。 [1]
And there is one competitor that Luckin is really worried about:
The new brand Kudi Coffee, created by the former chairman of Luckin, Lu Zhengyao, and the former CEO, Qian Zhiya, lowered the price of their coffee with its "1 yuan to drink coffee" deal. This is seen as a direct move to take Luckin customers. The two coffee chains are often also directly competing against each other for customers and franchisees in lower tier markets.
由原瑞幸咖啡董事长陆正耀、原CEO钱治亚打造的新品牌库迪咖啡，用“1元喝咖啡”拉低了价格下限，被从业者认为是“转化瑞幸用户”，而且两家也非常“默契”地在下沉市场相遇，争夺小镇客流和加盟商。 [1]
So will Luckin continue its comeback?
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Favourite Five
1. 翻盘 fān pán
turning the tide, reversing the situation
中国咖啡江湖上演着一场翻盘大战 - A battle of turning the tide is unfolding in China’s coffee sector. [1]
Related:
反超 fǎn chāo - overtake, surpass
翻身 fān shēn - make a comeback, turn things around
逆风翻盘 nì fēng fān pán - make a comeback against significant challenges
2. 爆雷 bào léi
exploding mine; major financial crisis
乔南对爆雷前后的瑞幸做过深度复盘，据他总结，是因为瑞幸第一时间针对运营、战略、营销多个层面进行了全方位调整 - Qiao Nan conducted a thorough review of the events before and after the financial fraud incident at Luckin Coffee. According to his analysis, it was because Luckin Coffee immediately made comprehensive adjustments across various aspects such as operations, strategy, and marketing. [1]
Note: Often used to describe financial fraud.
3. 浴火重生 yù huǒ chóng shēng
rebirth through baptism by fire
2022年11月，就连曾经做空瑞幸的幕后推手雪湖资本，也成了这家公司的股东，其创始人马自铭称，“瑞幸咖啡的浴火重生是中国商业史上的一个奇迹” - Snowlake Finance, who even shorted Luckin Coffee in November 2022, has become a shareholder in the business again. Its founder, Ma Ziming said: “Luckin Coffee’s rising from the flames is a miracle in the history of Chinese companies”. [1]
More: Read more in this week’s The China Project Phrase of the Week.
Related:
卷土重来 juǎn tǔ chóng lái - make a comeback, rise from the ashes
起死回生 qǐ sǐ huí shēng - come back to life from the brink of death
大起大落 dà qǐ dà luò - rise and fall together, ups and downs
东山再起 dōng shān zài qǐ - rise again in the East, make a comeback after a setback
4. 东窗事发 dōng chuāng shì fā
exposed through the east window; a secret or scandal that’s been exposed
2020年瑞幸“东窗事发”后，星巴克在中国市场基本保持着每年净增600家门店的速度 - After the exposure of Luckin's scandal in 2020, Starbucks has managed to maintain a pace of adding around 600 new stores per year in the Chinese market. [1]
5. 旗鼓相当 qí gǔ xiāng dāng
evenly matched
“翻身”后的瑞幸显然更疯狂，两家的门店数从旗鼓相当到差距逐渐拉大 - After the comeback, it's clear that the revitalized Luckin Coffee became even more aggressive. The two companies used to have similar number of stores, but the difference has gradually widened. [1]
Consuming the Conversation
Useful words
6. 惊天 jīng tiān
earth-shattering, shocking
它自曝财务造假22亿，引发商业史上惊天丑闻 - It self-disclosed a financial fraud of 2.2 billion yuan, triggering a shocking business scandal. [1]
7. 崩盘 bēng pán
collapse, total breakdown
公司几乎走向全面崩盘，但过去三年多，它是怎么冲到上万家店的 - The company was on the brink of a complete collapse. But it went on to expand to tens of thousands of stores over the past three years. How did they do it? [1]
Related: 崩溃 bēng kuì - collapse, crumble
8. 蚕食 cán shí
gradually erode
近年来，星巴克中国业绩下滑、市场份额被蚕食，也是不争的事实 - In recent years, it's an undeniable fact that Starbucks' performance in China has declined and its market share has been gradually eroded. [1]
Related: Similar to 吞食 (which is more aggressive and faster).
9. 斐然 fěi rán
remarkable, impressive
瑞幸的创新成效斐然，同时也是在用一种创新的形式积极推广中国传统茶文化 - Luckin has made remarkable achievements through its innovation, which is also a new way to actively promote traditional Chinese tea culture. [4]
10. 撒钱 sǎ qián
scatter money; spending money lavishly
一度是分众传媒大客户的瑞幸，不再撒钱投广告，转头开始做社群化的运营拉新 - Once a major client of Focus Media, Luckin Coffee stopped lavishly spending on advertising and instead shifted towards community-based operations to attract new customers. [1]
Related:
烧钱 shāo qián - burn money, spend excessively
11. 蛰伏 zhé fú
lay low, hibernate, bide one's time
2020-2023的三年间，瑞幸从跌落、蛰伏到重拾野心 - During the three years from 2020 to 2023, Luckin Coffee went from falling from grace to laying low and then regaining its ambition. [3]
Three-character phrases
12. 吹牛皮 chuī niú pí
boast or exaggerate
一种观点是，彼时全球流动性过剩，导致这种“吹牛皮”式的商业思维大为流行 - One viewpoint is that at that time, global liquidity surplus led to the prevalence of this "blowing cowhide" style of business thinking. [1]
Note: The full version of 吹牛.
13. 双寡头 shuāng guǎ tóu
a market situation with two dominant players
星巴克和瑞幸分别是高端和平价的绝对头部玩家，而这种双寡头的局面必然会长期存在 - Starbucks and Luckin Coffee are the absolute top players in the high-end and affordable segments respectively. This duopoly situation is bound to exist for the long term. [1]
Note: 寡 guǎ means lonely or one in classical Chinese.
14. 风向标 fēng xiàng biāo
weathercock; barometer or indicator
突破万店之后的瑞幸，已然成为中国咖啡界的风向标 - After surpassing the ten-thousand store mark, Luckin Coffee has indeed become the barometer of the Chinese coffee industry. [2]
Idioms
15. 毁誉参半 huǐ yù cān bàn
mixed reviews or opinions
尽管公众对瑞幸的评价毁誉参半，但它是咖啡江湖上一个值得研究的样本 - Despite the mixed reviews from the public, Luckin Coffee serves as a worthy case study in the coffee industry. [1]
16. 轰动一时 hōng dòng yì shí
making a big impact for a short period of time
这起轰动一时的财务造假事件，最终被认为是公司治理的问题，而不是咖啡品类的“锅” - The financial fraud that caused a stir was ultimately attributed to issues in its governance, rather than being a problem with the coffee sector itself. [1]
17. 高枕无忧 gāo zhěn wú yōu
have no worries and live in comfort
但走出造假泥沼的瑞幸，并不是高枕无忧 - However, for Luckin Coffee that has emerged from the quagmire of fraud, it is not a situation where they can rest easy. [1]
Note: Direct translation is “high pillow no worries”. It’s often used in the negative as in this sentence.
18. 崭露头角 zhǎn lù tóu jiǎo
stand out with one's head and shoulders above others; to emerge or make a name for oneself
从2017年-2019年的崭露头角、蒙眼狂奔，2019年-2020年的登陆美股、全面扩张 - From 2017 to 2019, Luckin Coffee emerged and charged forward, then from 2019 to 2020, it went public on the U.S. stock market and expanded aggressively. [1]
19. 前车之鉴 qián chē zhī jiàn
learn from the last car; a warning or example from previous experiences
更重要的是，拥有“前车之鉴”的瑞幸似乎并没有变得更加让人惊喜 - What's more important is that Luckin Coffee, with the lessons from the past, doesn't seem to have become more exciting. [2]
20. 岿然不动 kuī rán bú dòng
remain steadfast or unchanged
与库迪、蜜雪冰城等进行价格战时，星巴克用自身独到的商业模式岿然不动就收获大幅增长 - While engaging in price wars with Kudi, Mixue Bingcheng, and others, Starbucks achieved significant growth by standing firm with its unique business model. [2]
21. 虎视眈眈 hǔ shì dān dān
watching like a tiger; watch closely and attentively with intent
库迪之外，还有更多品牌在虎视眈眈，Manner、M Stand等等，中国邮政、李宁等也跨界而来 - Besides Kudi, there are many other brands watching closely, such as Manner, M Stand, and even brands like China Post and Li-Ning are crossing over. [3]
Phrases
22. 一骑绝尘 yì qí jué chén
ride so fast that the dust doesn't rise; outpace all competitors
瑞幸门店规模领跑，而且在“快咖啡”赛道里一骑绝尘 - Luckin Coffee leads in terms of store scale and is also outpacing all competitors in the "fast coffee" sector. [1]
Note: 骑 can also be pronounced jì.
23. 粉单市场 fěn dān shì chǎng
pink sheet market; stocks of companies that have been delisted from major stock exchanges
目前在粉单市场（从纳斯达克、纽交所退市的公司，可去粉单市场交易）的股价为27美元 - Currently the stock price on the pink sheet market (where companies delisted from NASDAQ and NYSE can be traded) is $27. [1]
24. 低线市场 dī xiàn shì chǎng
low-line market; lower-tier cities or rural areas
进入更广阔的低线市场，还得找一条新路子 - To enter the broader lower tier markets, they need to find a new approach. [1]
Related: 下沉市场 xià chén shì chǎng - "sinking market" refers to lower-tier cities and rural areas
25. 一去不复返 yí qù bú fù fǎn
once gone, never return; something lost or changed cannot be regained
瑞幸在今年二季度好不容易积累的亮眼业绩或将一去不复返 - The impressive performance that Luckin Coffee painstakingly achieved in the second quarter of this year may never be regained. [2]
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