Luckin Coffee’s entry into Hong Kong a sign of mainland Chinese brands’ growing dominance

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China’s largest coffee chain opens first outlet in the city as it goes up against US rival Starbucks

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Luckin Coffee, China’s biggest coffee chain, has expanded into Hong Kong. Photo: China News Service via Getty Images

Cheryl Arcibal

Published: 11:30am, 24 Dec 2024

Mainland Chinese brands are ramping up their presence in Hong Kong, using the city to test the waters before foraying overseas, according to analysts.

The debut of Luckin Coffee, which bills itself as the “Starbucks of China” for having the most number of outlets on the mainland, is a sign of things to come for Hong Kong’s retail segment, they said.

Luckin recently opened its first branch at Mira Place in Tsim Sha Tsui, marking its entry into a market that is currently dominated by Starbucks, the US coffee chain. The Chinese coffee chain is set to open another outlet in Tseung Kwan O, according to local media reports.

“We foresee mainland brands continuing their interest to expand to Hong Kong, Southeast Asia and even European markets,” said Lawrence Wan, head of advisory and transaction services for retail at CBRE Hong Kong.

“Hong Kong would be an interesting and strategic market for these mainland brands, especially when high street shop rents have fallen significantly from a peak over the past few years.”

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Hong Kong’s retail sales declined for the eighth consecutive month in October, dropping 2.9 per cent year on year, according to government data. Retail sales in the first 10 months of the year fell 7.1 per cent to about HK$312.3 billion (US$40.2 billion), compared with the same period in 2023.