Luckin Coffee, the fast-growing Chinese coffee chain, is set to enter the Malaysian market through a partnership with an undisclosed franchisee listed on Bursa Malaysia.
The company aims to establish a significant presence in Malaysia over the next five years, enhancing its international footprint which currently includes 32 stores in Singapore.
According to sources familiar with the plans, a letter of intent will be signed soon, with a master agreement anticipated by July 2024.
Despite operating over 18,500 stores in China, Luckin Coffee reported an operating loss of RMB 65.1 million ($9 million) for the first quarter ending March 31, 2024. This marks its first quarterly loss in two years, attributed to a decline in sales during the period.
The Malaysian market has attracted a wave of international café operators in the past year. New entrants include the UK-based EL&N, Thailand’s ChaTraMue, US specialty roaster Reborn Coffee, the boutique café and dining concept Café Kitsuné, and Luckin Coffee’s competitor Cotti Coffee, which now operates five stores in the country.
The Malaysian branded coffee shop market, with over 3,300 outlets, is also seeing robust growth in its domestic segment. Notable local brands such as ZUS Coffee, Gigi Coffee, and Bask Bear Coffee have expanded their networks significantly in the past year, reaching 443, 143, and 103 stores respectively.
Projections suggest that the Malaysian branded coffee shop market will grow to 6,100 outlets by the end of 2028.