At a glance

Luckin Coffee has grown rapidly as a coffee chain by avoiding the expensive and time-consuming business of building stores in favour of kitchens that can fulfil online orders. Word of mouth promotional activity has also been crucial.

Why it matters

Luckin Coffee is an example of a business model that is disrupting traditional market leaders (Starbucks in this case). It’s an approach that taps into current lifestyle trends in China and that uses data to offer a distinctively different proposition to consumers.

Takeaways

  • Understand your core competence.
  • Understand the needs and desires of your target market.
  • Use data to create and deliver the right message at the right time.

Luckin Coffee launched towards the end of 2017 and was taken to an IPO 17 months later with a valuation of $4.2 billion. Not bad for a brand whose name was chosen at random by a lawyer in a rush to register a company born not out of a love of coffee but an understanding of data (and that’s why its stock was floated on Nasdaq, a favourite for tech listings).