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After listing in Hong Kong, Kopi Luwak is preparing to speed up its expansion.

Recently, there is news that Kopi Luwak has announced that it will open franchises and officially launch the plan of opening 1,000 stores in 100 cities. A reporter from Nanduwan Finance learned from Kopi Luwak that Kopi Luwak has not just opened franchises, but it does want to speed up the opening of stores, and it is expected that the number of stores will increase tenfold to 3,000 within three years.

Kopi Luwak opened its first store in Guangzhou in 2011, specializing in premium coffee. One of the reasons why it was named Kopi Luwak is that its signature coffee beans are Kopi Luwak. In the first few years after its establishment, Kopi Luwak opened stores quickly. According to Winshang.com, as of September 2015, Kopi Luwak had more than 200 stores. But for a long time afterwards, its expansion slowed down significantly. According to the latest data disclosed by Kopi Luwak, as of now, the total number of Kopi Luwak stores in mainland China has reached more than 300. In other words, in the past 9 years, its net increase in stores has only been about 100.

Kopi Luwak wants to increase the number of its stores tenfold in three years, and will prioritize the Guangdong-Hong Kong-Macao Greater Bay Area this year. A Kopi Luwak official told a reporter from Nanduwan Finance that Kopi Luwak will prioritize the Guangdong-Hong Kong-Macao Greater Bay Area and is actively preparing to open 280 stores in cities such as Hong Kong, Guangzhou, Shenzhen, Zhuhai, Zhongshan, Foshan, and Dongguan, which is expected to be completed this year. In 2025, Kopi Luwak will further expand to Shanghai and the Yangtze River Delta region, and plans to achieve the goal of 3,000 stores within three years.

Before launching the Hundred Cities and Thousand Stores Plan, Kopi Luwak was successfully listed by acquiring shares of listed companies. In September last year, Leung Nai-ming, the founder of Kopi Luwak, acquired a total of 51.13% of the shares of Li Bao Ge (1869.HK), a Hong Kong listed catering company, and became the actual controller of Li Bao Ge. Li Bao Ge's main business is operating Cantonese restaurants. It owns 4 restaurants in Hong Kong and Shenzhen. In 2023, Li Bao Ge's revenue increased by 31.7% year-on-year to HK$179 million, and it turned losses into profits, realizing a profit of HK$7.987 million. In March of this year, the stock name of Li Bao Ge was officially changed to "Kopi Luwak Holdings". Kopi Luwak Holdings said that it will open new coffee shops and develop coffee-related trades, while expanding its catering business.

In terms of franchise business, the relevant person in charge of Kopi Luwak revealed to reporters that the Kopi Luwak brand is currently promoting three different store types of cooperation models, and the matching investment amount has a corresponding gradient, ranging from 500,000 yuan to 2 million yuan overall. Among them, the Kopi Luwak Family Boutique Store is the main store type first launched in 2024. It is the highest-end store type under the brand, integrating coffee product retail and tasting. This model can provide coffee solutions for families, offices, and outdoor travel. It is a new "café + coffee retail" business model. It is reported that among the existing Kopi Luwak stores, the current ratio of directly-operated stores to franchise stores is about 55:45.

Kopi Luwak Boutique

However, if they want to open stores vigorously, there may be many challenges facing Kopi Luwak. Compared with other coffee brands, the investment threshold of Kopi Luwak is not low. According to the company's official website, the minimum initial investment amount of Luckin Coffee is about 410,000 yuan, the minimum investment threshold of Kudi Coffee is about 112,000 yuan, and the minimum initial investment amount of Tianhao Coffee is about 560,000 yuan.

At the same time, the overall pricing of civet coffee is relatively high. The ordering app shows that the price of a single cup of coffee is mainly between 30 yuan and 39 yuan. The coffee beans used are mainly Italian blend beans. The price of hand-brewed coffee is between 48 yuan and 68 yuan, while the price of civet coffee series coffee is 128 yuan and above.

Under such pricing, currently, Kopi Luwak stores are mainly distributed in first-tier cities and new first-tier cities. However, Kopi Luwak also intends to find growth in the sinking market. A relevant person in charge of Kopi Luwak revealed that Kopi Luwak has achieved good market feedback in first-tier and new first-tier cities, and it is also exploring more possibilities. The downward trend of the coffee market is becoming increasingly obvious, and it is also adapting to this development trend. With the rise of coffee culture in third-tier and fourth-tier cities, consumers' demand for high-quality coffee is also growing. "We plan to bring Kopi Luwak's brand concept and products to more places through the franchise model."

Among the coffee brands with more than 1,000 stores in China, only Starbucks has an overall price of more than 30 yuan, while the prices of other brands are all below 20 yuan. Among them, Kudi Coffee and Lucky Coffee, which rank third and fourth in terms of the number of stores, have an overall unit price of less than 10 yuan.

Wang Zhendong, chairman of Shanghai Feiyue Investment Management Co., Ltd., told Nanduwan Finance that boutique coffee is no longer mainstream in the domestic market, and the plan of Kopi Luwak is to go against the trend. Moreover, the current business conditions of coffee brands with the same price and comparable to it are relatively average, and there are no plans for large-scale store expansion. The latest high-end store type promoted by Kopi Luwak can be compared with Starbucks' selected stores, but Starbucks does not have many expansion plans for selected stores.

Written by: Nandu Wancaishe reporter Zhan Danqing