As Luckin reportedly moves toward a U.S. listing at a $3 billion valuation, one analyst says Starbucks has a serious challenger in China.
The contrast is stark: On the one hand there’s Starbucks, the global coffee giant, trying to bolster a coffee culture in China, opening stores that include 30,000-square-foot “experience” establishments. On the other, there’s digital- and delivery-focused Luckin, looking to compete with price and speed.
Luckin has raised $1 billion, and, according to The Journal, could go public this year with a U.S. listing, perhaps at a $3 billion valuation—roughly half of Dunkin Brands ’ market capitalization. John Culver, Starbucks’ Group President of International, Channel Development and Global Coffee & Tea, acknowledged China is a “changing consumer economic and competitive environment” in a January conference call with investors.
But investors shouldn’t gloss over the competitive challenges Starbucks faces in China, Stifel analyst Chris O’Cull wrote in a note Thursday.
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