It took Luckin Coffee less than two years from formation to go public. And since June it has opened nearly 3,000 stores in a total of 40 Chinese cities.
Now the company is trimming down — with bubble tea.
On Tuesday, Luckin announced it would spin off its bubble tea business — just five months after setting foot in the sector. It said it would open separate stores that will focus on selling tea drinks across the country.
Since debuting several tea beverages in April, sales far exceeded expectations, said Liu Jian, the company’s chief operating officer.
Liu said compared to the current Luckin stores that are mainly located in big cities like Shanghai and Beijing, the new tea-focused stores will be located in smaller cities. Compared to its current stores that are entirely run by the company, the tea stores will offer franchise partners special incentives such as access to sales data and tech know-how, Liu said.
But things are not all smooth for the coffee speedster. Last month, it reported substantial overall loses in its first quarterly report since its IPO.
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