Luckin Coffee is again considering an entry into Persian Gulf markets as it looks for new overseas growth. In an interview with CNBC, Chairman David Li said senior management is evaluating expansion opportunities, including a possible move into Gulf countries.
The renewed interest comes after Abu Dhabi sovereign wealth fund Mubadala became a direct investor in Luckin. In early September, Mubadala and Centurium Capital made a joint $1 billion investment in the company, although neither side disclosed the size of their respective stakes.
Luckin had previously planned to open stores in the Middle East and India in 2019, but those plans never materialized. The company later became embroiled in an accounting scandal after former executives were found to have fabricated hundreds of millions of dollars in sales, leading to a U.S. bankruptcy filing and its delisting from Nasdaq.
The chain is now trying to resume international expansion from a much stronger position. CEO Jinyi Guo told CNBC separately that Gulf markets are attractive because of steady, high-frequency coffee demand and rising consumer interest in low-sugar, health-oriented drinks.
With backing from Centurium, Luckin has staged a sharp turnaround and overtaken Starbucks by sales to become China’s largest coffee chain. Its over-the-counter traded shares now value the company at about $9.6 billion, while Temasek disclosed a 6.4% stake in a May filing.
Luckin’s overseas footprint remains modest compared with its China business. The company operates 23 stores in New York City, 150 in Malaysia and 100 in Singapore, versus more than 36,000 stores across mainland China and Hong Kong combined.
