Chinese coffee company Luckin Coffee reported that its net revenue for the first half of this year increased 106% to RMB 3.1 billion (approximately US $492.9 million) year-on-year.
This financial report, announced on October 1st, is the company’s first normalised one since the incident in April 2020, when the company admitted to reporting fraudulent sale numbers of $310 million. For the past year, the Chinese coffee company settled the financial fraud in hopes of making a comeback with the business, which involved paying a penalty of $180 million and settling a US class-action lawsuit that amounted to a sum of $187.5 million.
Even though Luckin Coffee filed bankruptcy in the US in February this year, the coffee chain has steadily grown in China’s coffee market, under the direction of a more competent Board.
The company’s chairman and CEO Guo Jinyi attributed their growth in revenue to the increased revenue from self-operated stores, higher prices and order frequency, and improved cost structure.
Luckin Coffee plans to grow more partnership stores as part of its plan to shift to an asset-light model. From partnership stores, the company gets 40% of the profits if sales reach an agreed earning threshold. As of June, the company operates 4,018 self-operated and 1,241 partnership stores – this is a 5.8% decrease in the self-operated model and a 50.6% increase in partnership stores.
Shifting to more partnership stores has worked out for Luckin Coffee so far as revenue from partnership stores surged 357.8% to RMB 441.2 million (approximately US $69.05 million) year-on-year. Last year, revenue from partnership stores only made up 6.2% of the company’s total revenue. This year, it jumped to 13.9%.
