Malaysia-listed Hextar Industries Berhad, through its subsidiary, Global Aroma Sdn Bhd (GASB), has entered into a strategic partnership with Luckin Coffee Holding Singapore Pte Ltd to bring Luckin Coffee brand to Malaysia.

This collaboration grants GASB the exclusive rights to develop, open, and operate coffee shops under the renowned ‘Luckin Coffee’ brand nationwide, introducing Malaysians to a modern coffee experience, Hextar Industries said in a statement on Friday.

Luckin Coffee, founded in 2017, operates 21,343 stores globally as of the third quarter of 2024 (Q3FY2024). In Q3FY2024 alone, the company introduced 1,382 new net stores, a 6.9 percent unit growth compared to Q2FY2024. In Q3FY2024, Luckin Coffee reported a net income of RMB1,302.6 million ($180.06 million)

Luckin Coffee currently operates with a robust workforce, having served over 300 million cumulative customers in China and Singapore. The company’s average monthly transacting customers reached 79.8 million in Q3FY2024, representing a solid 36.5 percent year-on-year growth.

In July 2024, Luckin Coffee celebrated a significant milestone with the grand opening of its 20,000th store in Beijing.

Hextar said the partnership with Luckin Coffee marks a pivotal step for the company as it capitalizes on the rapid expansion of one of the world’s fastest-growing coffee brands. It is also a major step forward for Hextar Industries as it leverages the immense potential in the fast-growing F&B market, opening up new revenue streams and offering consumers a fresh, tech-driven coffee experience.

Eddie Ong, a major shareholder of Hextar Industries said, “The partnership with Luckin Coffee unlocks new growth opportunities and marks a significant milestone for Hextar Industries. Hextar Industries’s expansion of Luckin Coffee brand name into the Malaysian market is a strategic investment that I am confident will deliver excellent returns.”

“We have equally ambitious plans for Luckin Coffee in Malaysia, inspired by the brand’s tremendous growth. We aim to replicate this success by expanding aggressively across the country. We believe that bringing this success story to Malaysia will not only widen our portfolio but also tap into the thriving F&B market here, making it a highly worthwhile investment for both Luckin Coffee and Malaysian consumers.”

“The coffee culture is growing rapidly, and with Luckin Coffee’s value-driven pricing and technology-driven approach, we are confident that this move will drive significant growth for Hextar Industries, positioning us for long-term success.”

Dr Jeff Lim Chee Lip, Chief Executive Officer of Global Aroma Sdn Bhd, added, “Our goal is to make Luckin Coffee a household name nationwide, and we are committed to delivering an exceptional coffee experience that truly resonates with Malaysian consumers.”

Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee, said, “We are delighted to collaborate with Hextar Industries Berhad to jointly facilitate the launch of Luckin Coffee stores in Malaysia, which marks a significant step forward for Luckin Coffee’s international expansion.”

GASB plans to launch several Luckin Coffee outlets across Malaysia by Q1 2025.

These outlets will bring Luckin Coffee’s innovative, tech-driven coffee experience to Malaysian consumers.

By leveraging Luckin Coffee’s data-driven approach and proven business model, Hextar said GASB aims to capture a substantial share of the local coffee market with the aim of enhancing customer experience with convenient, technology-enabled services.

Luckin Coffee’s entry comes at a time when Malaysians are seeing a rising number of local and international coffee chain brands and outlets in the country. Both local and international coffee brands are competing for a larger market share as US brand Starbucks faces ongoing boycott amid the Israel-Gaza war.

Luckin Coffee’s expansion also comes amid a price war in its home market, China, which decimated its profit margin. Luckin Coffee is also planning a US launch in 2025, the Financial Times reported last month.

Luckin Coffee’s net income was RMB1,302.6 million ($185.8 million) in Q3FY2024, representing a net margin of 12.8 percent, compared to net income of RMB988.0 million, or a net margin of 13.7 percent, in the same quarter of 2023, its latest financial results showed.

Total net revenues were RMB10,180.8 million ($1,452.1 million) in the third quarter of 2024, representing an increase of 41.4 percent from RMB7,200.0 million in the same quarter of 2023, the statement published last month showed.

In September last year, Indonesian coffee chain unicorn Kopi Kenangan told Tech in Asia that it has opened 14 outlets in Malaysia. Its CEO Edward Tirnata said in an earlier interview with DealStreetAsia that he expected to open 25 stores in Malaysia by July and 50 by end of 2023. The coffee chain was launched in Malaysia in 2022. Kopi Kenangan counts Tybourne Capital Management, Hong Kong tycoon Li Ka-shing’s Horizons Ventures, Kunlun, B Capital, Falcon Edge Capital among its backers.

Up-and-coming, Luckin Coffee-inspired Malaysian brand ZUS Coffee is also aggressively expanding its businesses. By the end of 2023, ZUS Coffee would have reached a total of 360 locations in Malaysia, with plans to open 250 more in 2024, ZUS Coffee chief operating officer (COO) Venon Tian told The Star in an interview published in January.

ZUS Coffee’s expansion plan also followed the announcement that Choi Garden restaurant group, led by Filipino billionaire Frank Lao, had acquired a 35 percent stake in the company.

China’s Luckin Coffee to enter Malaysian market with local partner – report