Luckin has a Starbucks dream

Ask AI · Can Luckin Coffee Leverage Blue Bottle Coffee to Challenge Starbucks in the Global Market?

Produced by | New Product Brief Finance

Author | Wu Wenwu

Luckin Coffee’s major shareholder has acquired Blue Bottle Coffee, seeking brand premiumization. Luckin has a Starbucks dream, and behind this is a new narrative from leading players in China’s coffee sector, but the old coffee wars will not cease.

01 Luckin Welcomes a Wealthy and Handsome Brother

After consistently selling cheap coffee, Luckin has finally welcomed a wealthy and handsome brother brand.

Earlier this month, Luckin Coffee’s major shareholder and actual controller, Dazhong Capital, reached an agreement with Nestlé to acquire the global store assets of Blue Bottle Coffee for a transaction price below $400 million.

Reports indicate that after the transaction is completed, Nestlé will retain Blue Bottle Coffee’s fast-moving consumer goods business, covering categories such as coffee beans, instant coffee, and ready-to-drink beverages.

According to sources close to both parties, the signing process for the transaction has been completed, but formal delivery has not yet occurred.

Although Dazhong Capital only acquired Blue Bottle Coffee’s store operations, it has attracted significant attention and discussion in the industry and the global coffee market, given that Blue Bottle Coffee follows a high-end route.

Founded in 2002, Blue Bottle Coffee claims that its core philosophy is “only selling coffee beans roasted within 48 hours,” emphasizing fresh roasting, hand brewing, and minimalist aesthetics. It is a representative brand in the third wave of coffee, following a high-end specialty coffee path. Currently, Blue Bottle Coffee has only 15 stores in the Chinese domestic market.

Luckin Coffee’s total number of stores has surpassed 30,000, making it a coffee giant, but Luckin follows a value-oriented route. With Dazhong Capital now as the actual controller of Luckin, the acquisition of Blue Bottle Coffee certainly comes with its strategic intent.

A senior coffee industry expert told New Product Brief Finance that Dazhong Capital’s acquisition of Blue Bottle Coffee aims to position Blue Bottle Coffee on a high-end path, creating a business combination effect with Luckin Coffee’s value-oriented approach and different coffee brand positioning.

Dazhong Capital’s acquisition of Blue Bottle Coffee is not only about telling a new story; after all, Dazhong Capital has a coffee brand centered around Luckin Coffee and resources across the entire coffee industry chain, which can empower Blue Bottle Coffee’s future development in China and globally.

Although Blue Bottle Coffee is currently still in a loss-making state, with the support of Dazhong Capital’s capital and Luckin’s industrial chain resources, it is expected to open more stores in more cities nationwide while maintaining brand tone and not diluting brand value.

The aforementioned senior coffee industry expert indicated that Blue Bottle Coffee is likely to maintain independent brand operations and will probably establish a joint venture with Luckin Coffee to jointly manage Blue Bottle Coffee’s business.

Despite differing opinions in the market about Dazhong Capital’s acquisition of Blue Bottle Coffee, it is indeed a landmark investment case of a Chinese investment institution acquiring an international high-end coffee brand.

To outsiders, it appears that Luckin has welcomed a wealthy and handsome brother brand, bringing glory to its shareholder Dazhong Capital, while Luckin can also benefit from the halo effect of Blue Bottle Coffee.

02 Luckin Has a Starbucks Dream

Ten years ago, the internet+ wave swept across the landscape. Luckin Coffee was established in 2017, choosing to adopt an internet coffee model, allowing users to order online and pick up in-store.

In the beginning, Luckin’s pricing was lower than Starbucks, but relying on internet subsidies, celebrity endorsements, marketing battles, advertising promotions, and cross-industry collaborations, it rapidly rose. Later, with the emergence of Cooti Coffee, the two engaged in a coffee price war with prices as low as 9.9.

From the outset, Luckin claimed it would benchmark against Starbucks, rapidly expanding with a small store model, establishing locations across the national market—whether in first- and second-tier cities or third- and fourth-tier cities, even in county towns, Luckin stores could be found.

Although Luckin follows a small store model while Starbucks operates large stores as a third space, the two fundamentally differ in store types and business models, yet the market continues to compare the two.

Just from the perspective of store numbers, by the end of 2021, Luckin disclosed in its annual report that it had 6,024 stores, surpassing Starbucks China’s 5,557 stores at that time. By the end of 2025, Luckin is expected to exceed 30,000 stores, while Starbucks China will have 8,011 stores.

Looking at financial data, Luckin achieved annual revenue surpassing Starbucks China in 2023. That year, Luckin Coffee’s revenue reached 24.903 billion yuan, surpassing Starbucks China’s $3.16 billion (approximately 22.1 billion yuan in the 2023 fiscal year).

From the perspective of domestic market store numbers and revenue scale, Luckin, which once benchmarked against Starbucks China, has gained unprecedented confidence in the coffee industry.

Luckin has successfully told the story of internet coffee, deeply embedding itself in consumers’ minds, achieving significant development, but its brand image now represents affordable coffee.

Luckin has already reduced its 9.9 coffee offerings and does not wish to engage in a coffee price war, aiming to gradually return to normal product pricing. However, many of Luckin’s consumers are price-sensitive, and if discounts decrease or are eliminated, they will look for alternatives.

For the market and consumers, Luckin has already formed a fixed brand image as affordable coffee, which is difficult to change.

Luckin does not want to only sell cheap coffee, and its shareholder Dazhong Capital also does not want this. Acquiring Blue Bottle Coffee to tell a new story is a new strategy.

Dazhong Capital aims to transform Luckin into a global coffee business empire, preparing for a return to the capital market. It not only needs Luckin but also requires high-end brands like Blue Bottle Coffee to create a combination.

It is said that Luckin Coffee’s total number of stores has surpassed Starbucks, but this is only in the Chinese market.

In reality, domestic media rarely report that as of the end of Q1 of the 2026 fiscal year (December 28, 2025), Starbucks had a total of 41,118 stores globally. From a global market perspective, Luckin’s total number of stores is still less than Starbucks at this stage.

Dazhong Capital not only wants to do well with Luckin’s business, but Luckin also does not wish to sell cheap coffee. Both have a dream of a high-end coffee brand, similar to both having a Starbucks dream. With the support of Blue Bottle Coffee, it may indeed be a good choice.

It is evident that Luckin Coffee once benchmarked against Starbucks, surpassed Starbucks, understood Starbucks, and ultimately still wants to become Starbucks.

03 New Narratives and Old Wars Among Chinese Coffee Players

Undoubtedly, Luckin has successfully told the story of internet coffee. Luckin once fell into its darkest hour due to the 2020 financial fraud scandal, but later staged a miraculous comeback.

Luckin has successfully told a business story across various aspects such as brand storytelling, marketing, product development, store network, and the construction of an upstream and downstream resource ecosystem.

Luckin is accelerating its new narrative, and its major shareholder Dazhong Capital’s acquisition of Blue Bottle Coffee is a significant event. In the past, Luckin relied on a single brand’s rapid growth, pursuing scale and extreme efficiency.

Now with Blue Bottle Coffee’s backing, it cannot be ruled out that Dazhong Capital may also acquire other high-end coffee brands. Clearly, under Dazhong Capital’s management, Luckin is beginning to transition from a single brand to a multi-brand approach, covering the spectrum from affordable coffee to mid- to high-end coffee operations.

Luckin is also beginning to create coffee consumption scenarios, such as opening flagship stores in key cities. For example, Luckin’s 30,000th flagship store was chosen to open in Shenzhen.

This is not only Luckin’s new narrative; it also hides Luckin Coffee’s new ambition to further strengthen its presence in the international market and accelerate the layout of its coffee brand’s comprehensive business map.

The competition in the domestic coffee market is intensifying. Although Luckin has achieved scale, it still faces multiple competitors.

Luckin’s number one competitor is Cooti Coffee, founded by former executives from Luckin, aiming to create a second Luckin.

Cooti has always been a “replicator” of Luckin, closely following its every move.

Now Cooti is also reducing its 9.9 coffee offerings, aiming for brand elevation. Starting March 1, Cooti will pause opening joint operations (franchises) in provincial capitals and above, establishing a number of directly operated model stores to better enhance customer experience.

The aforementioned senior coffee industry expert told New Product Brief Finance that upon seeing Dazhong Capital acquire Blue Bottle Coffee and start brand elevation, it is highly likely that Cooti will also seek to acquire another high-end coffee brand to work on brand premiumization.

The pursuit of brand premiumization has become a new narrative for China’s leading coffee chains, but this does not mean the old wars will end; rather, they will intensify.

In addition to competition among leading brands like Luckin and Cooti, the brother brand of Mixue Bingcheng, Lucky Coffee, is also aggressively opening stores, and Guming is making strides in the coffee race. Even Wallace, jokingly referred to as “the jet fighter” by netizens, has launched a 9.9 American coffee subscription.

The fierce battle in China’s coffee market will continue to unfold in the future.

References:

[1] Exclusive LatePost | Dazhong Capital has signed with Nestlé to acquire Blue Bottle. [2] Luckin’s Major Shareholder’s New Ambition Cannot Be Hidden, New Product Brief Finance

(This article does not constitute any investment advice)

Author’s Statement: Personal views, for reference only.