Starbucks' China rival Luckin denies using American money to compete
Chinese coffee chain Luckin, which went public on Friday, wants to compete with Starbucks in China. It plans to build 2,400 stores in just eight months.
“We are growing relatively quickly and I think we’ve communicated that we want to get to that target by the end of this year,” said Luckin Coffee CFO Reinout Schakel to FOX Business’ Stuart Varney on Friday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SBUX | STARBUCKS CORP. | 101.51 | -0.95 | -0.93% |
| LK | NO DATA AVAILABLE | - | - | - |
Schakel said the company, which is currently undercutting Starbucks by 25 percent in the market, is not banking on the U.S.-China trade war to drive success. And although nationalism would be a “tailwind,” the fundamentals of its business model along with high-quality, affordable and convenient products will draw customers to shops, he said.
However, the FOX Business host pushed back.
“You can’t ignore that you are raising American money, American dollars, to use against the American champion, Starbucks, in China so you can expand and beat them. There’s a political angle to this,” said Varney.
“I think what we’ve done is [get] a very global investor base,” replied Schakel. “So I think we are trying to get to a place where we’ll be very well capitalized… to be able to continue to grow to continue our success that we’ve since in the last 18 months and really build on that success.”
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Starbucks CEO Kevin Johnson told FOX Business in March that competition in China is boosting demand.