Luckin Coffee Chairman Li Hui Reveals He's a Heavy Coffee Drinker, Consuming at Least Six to Seven Cups Daily

Special Topic: Luckin Coffee Agrees to Pay $180 Million Fine to U.S. SEC to Settle Fraud Allegations

“There’s no one-size-fits-all strategy in this market. The real game-changer comes from relentless focus, full commitment, and the strength of an integrated system—there can be no weak links.”

Luckin Coffee Chairman Li Hui speaks softly and deliberately. The driving force behind China’s largest coffee brand appears reserved at first glance.

Meeting Li Hui in late autumn in Beijing, he had just returned from Shenzhen after an overseas business trip. Despite looking to be in his early forties, he is actually 57—a testament to his disciplined lifestyle, which includes three to four weekly workout sessions lasting one to two hours each, involving running, cycling, and sports.

Throughout the hour-long conversation, Li never set his coffee aside. His assistant brought in an Americano, pushing aside the latte originally prepared for him—but by the end, both cups were empty. Li openly admits to being a heavy coffee drinker, needing it constantly during meetings and even before workouts to boost performance. “On average, I probably drink six to seven cups a day,” he estimates.

Coffee has undoubtedly been a defining element in Li’s life. He holds an undergraduate degree from Renmin University of China and an MBA from Yale School of Management. After graduation, he worked at Morgan Stanley and Goldman Sachs before joining Warburg Pincus in 2002. In 2016, he founded Centurium Capital, which is best known for its investment in Luckin Coffee.

Luckin Coffee was established in Xiamen in October 2017. After leading two funding rounds in 2018, Centurium became Luckin’s largest external investor. In 2020, Luckin faced a financial fraud scandal. During its darkest hour, Centurium injected capital twice in 2021 and 2022, becoming the controlling shareholder.

Over the past five years, Luckin has staged a remarkable turnaround—from facing delisting, losses, and massive penalties to achieving profitability and surpassing Starbucks as China’s largest coffee chain in 2023. On the evening of November 17, Luckin’s financial report showed Q3 2025 total net revenue of RMB 15.287 billion ($2.1 billion), up 50.2% year-over-year, with GAAP operating profit of RMB 1.777 billion and an operating margin of 11.6%. The total number of stores reached 29,214.

Regarding recent rumors of a relisting, Luckin CEO Guo Jinyi stated during the earnings call, “The company currently has no clear timeline for returning to the main board.” Li also declined to comment on speculation that Centurium is considering a bid for Costa Coffee.

In April 2025, Li rejoined Luckin’s board as chairman. Why did he choose to step into the spotlight now? What was the secret to Luckin’s rebound from rock bottom? Are there new expansion plans? What’s the logic behind its mix of company-owned and franchised stores?

In an exclusive interview, Li Hui, Chairman of Luckin Coffee and founder of Centurium Capital, addressed these questions. Below are edited excerpts:

**“Becoming Luckin’s Chairman Was a Natural Progression”** **Q:** You’ve mostly stayed behind the scenes. Why did you decide to step forward as chairman in April 2025? **Li:** It was a natural progression. Although I left Luckin’s board in 2020, Centurium, as the controlling shareholder, has been guiding the company every step of the way. After years of adjustments, Luckin is now at a critical growth stage—whether in domestic expansion or its “go global” strategy. The board felt I could contribute more.

**Q:** How are you involved in Luckin’s management? **Li:** We oversee Luckin from a board level, but our board is deeply involved in operations. We’ve built a modern corporate governance system where shareholders, the board, and management each play their roles. We communicate frequently with the management team, holding monthly meetings. To make informed decisions, we stay close to the frontline. In 2023, I spent two to three months visiting over a dozen regional branches.

Luckin is unique in balancing structured corporate governance with the agility of a startup—essential in China’s fast-moving, competitive market. As chairman, Luckin now demands much of my time, but the entire team shares the management load.

**Q:** What’s your management style? **Li:** Day-to-day operations are handled by the team. But a key aspect of Luckin’s culture is transparency—no unilateral decisions. Issues are openly debated. From the board’s perspective, what sets us apart is staying close to the action. That’s why I’ve visited nearly all our regional branches.

Ultimately, management makes the calls, but guidance is crucial—like whether to prioritize short-term earnings or long-term market positioning. The board provides that direction.

**Q:** With over 20 years in investing, how do you assess Luckin as an investment? **Li:** (Laughs) I’d say Luckin will likely be one of my most significant investments—perhaps the one I’ll reminisce about most in old age. But Luckin’s story is just beginning. I hope it becomes an enduring, truly great company.

**How Luckin Turned Around** **Q:** What key moves drove Luckin’s revival and rapid growth? **Li:** Luckin was founded eight years ago, and its crisis unfolded five years ago. The real transformation happened in these past five years.

First, we overhauled management and governance, shifting from a family-style structure to a modern corporate system. This included revamping incentives, rules, talent organization, and underlying business logic.

“Truth and pragmatism” became core values, embedded in operations and enforced through technology. We also adjusted talent, management, and incentives. For example, in early 2021, we allocated ~11% of shares for employee equity, broadening participation.

Second, we rebuilt the business model and unit economics, integrating front, middle, and back offices via digital tools to streamline collaboration. We broke down data silos, digitizing operations end-to-end.

Third, we heavily invested in upgrading the supply chain.

**Q:** What was the biggest challenge in dismantling data silos? **Li:** Organizational structure. Previously, data wasn’t truly interconnected—between departments or between business and finance. We rebuilt the data infrastructure, removing barriers so the entire system speaks one language.

But digitization is just the enabler. Organizational synergy is the foundation. On that base, we digitized every link—from supply chain to stores, customer ops, and talent.

For example, Luckin’s 29,000+ stores now upload real-time data on equipment (espresso machines, ice makers) and ingredients (coffee beans, milk, juices) to the cloud, vastly improving efficiency.

**Q:** Did Luckin close stores during restructuring? **Li:** In 2020, Luckin had 4,000+ stores; fewer than 1/3 remain. Many were opened hastily for scale. We shut the rest, reassessed, and rebuilt.

**Q:** What else was done? **Li:** Beyond store adjustments, we cut costs and boosted efficiency. New products drove sales and per-unit profits. Earlier, promotions were unprofitable. We controlled supply chain costs, reopened in prime locations, and gradually turned stores profitable.

**Q:** How much has efficiency improved since 2020? **Li:** The old model was unsustainable—selling coffee for under RMB 10 when costs exceeded RMB 15. In 2019, sales were ~RMB 3 billion, but losses topped RMB 3 billion.

Now, even at RMB 10 per cup, we profit. Efficiency gains—in operations, site selection, R&D, supply chain, and labor—made this possible.

For example, staffing: Luckin has ~170,000 front-line employees (full/part-time) plus ~100,000 delivery riders. Digital scheduling optimizes shifts, far outperforming peers.

Scale helps, but systemic efficiency is Luckin’s real edge—a reflection of the post-2020 business model rebuild.

**Q:** How long did restructuring take? **Li:** It’s ongoing. We still have 700–800 R&D staff embedded in business units.

**Q:** When did Luckin break even? **Li:** After board adjustments in late 2020, 2021 sales hit RMB 7.9 billion. Excluding legacy penalties, operations broke even that year.

**Q:** Most startups wouldn’t survive such a crisis. How did Luckin hold together? **Li:** Unlike mature Western firms, Chinese companies need governance overhauls in crises. Stabilizing ownership was key—Centurium’s control via debt restructuring and capital injections (2020–2022) ensured strategic continuity.

**Q:** Transitioning from investor to operator is rare. What did this shift mean for you? **Li:** As controlling shareholder, the perspective differs vastly from a financial investor. Centurium is an industrial investor. My goal is building Luckin into a lasting enterprise—the responsibility is greater.

**New Challenges** **Q:** How intense is China’s “coffee war” now? **Li:** Fierce. New factors—models, products, players—ignite fresh competition yearly. This year’s “delivery war” persists but also grows the addressable market.

Luckin had 22,000+ stores early this year; now it’s 29,000+. We accelerated expansion to seize opportunities.

**Q:** When did you hear about JD’s delivery entry? **Li:** Around February. We monitored whether it was a trend or a flash.

We pivoted to open platforms (e.g., third-party delivery), though our platform-sourced traffic remains lower than peers’ (some rely 80–90% on platforms).

**Q:** Who funds delivery subsidies—platforms or Luckin? **Li:** Both. Subsidies are dynamic, varying by product, time, and region. Our digital ops enable precision subsidies.

**Q:** Does this strain fulfillment? **Li:** Yes—it tests coverage, delivery, and experience. Platforms prefer capable partners. We’re leveraging this to widen our lead and store coverage.

**Q:** Did Luckin bid for Starbucks China? **Li:** No. Starbucks China’s localization may sharpen its edge, but China’s market is vast enough for multiple brands. We’ll watch their moves.

**Q:** With rivals like Starbucks, Cotti, and Chagee nearby, how do you view China’s coffee market? **Li:** It’s brutally competitive but nascent. China’s annual coffee bean consumption (~250k tons) is 1/6th of the U.S.’s. This is a long-growth, high-potential market—nowhere near saturation.

**Q:** Does “involution” (over-competition) worry you? **Li:** Pricing pressure exists (e.g., from this year’s delivery war), but our focus is self-improvement—meeting diverse needs while boosting efficiency.

Future competition hinges on efficiency. Earning 20% margins at RMB 12 vs. RMB 15 reflects different capabilities.

**Q:** Can Luckin profit at RMB 9.9/cup? **Li:** It depends on the product, but even with heavy subsidies, we maintain profitability.

**Q:** Reports say Luckin nets 13% at RMB 9.9. True? **Li:** Not per product—that’s gross margin. Overall, we offset subsidies via efficiency gains.

**Q:** Q3 2025 operating margin was 11.6% (vs. ~15% in 2024). Will you defend this level? **Li:** Margins have layers: store-level (~20%, peaking near 30% in 2022) and corporate operating margin (~mid-teens), which we manage.

**Q:** How do you balance store growth with per-store profits? **Li:** The board’s guidance prioritizes long-term growth. China’s coffee market is still young. Some unprofitable stores may be “early” rather than “wrong.” We wait for frequency/volume to rise.

**Q:** Is there a final store-count target? **Li:** It depends on customer ceilings. With 420 million users (and growing), we’ll keep expanding.

**Q:** 2/3 of stores are company-owned; 1/3 are franchised. What’s the logic? **Li:** In mature/high-tier cities, we own stores for density. In lower-tier markets, franchisees’ local expertise helps.

Franchisees leverage Luckin’s systems, digital tools, and scale to expand profitably.

**Luckin Can’t Rely Only on Coconut Lattes** **Q:** Has Luckin slowed its co-branding pace? **Li:** Not at all. Co-branding is now industry-standard. We launch collaborations every 1–2 weeks, with major Q4 tie-ups coming.

**Q:** Some say Luckin lacks evergreen hits like its Coconut Latte. Your take? **Li:** We need a broad product matrix—over-reliance on one item is unhealthy. Beyond Coconut Lattes and fruit-infused Americanos, our flavored lattes, light milk teas, and teas have strong repeat rates.

**Q:** What’s the role of light milk tea? **Li:** China’s coffee and tea markets overlap. Like Starbucks’ non-coffee drinks abroad, we cater to varied tastes. Light milk tea is a permanent category.

**Q:** Critics say Luckin resembles milk tea chains. Does this affect global branding? **Li:** Coffee is our core, but we see the broader ready-to-drink market as our arena.

**Global Expansion Isn’t a Gimmick** **Q:** How’s overseas growth progressing? **Li:** We’re serious about becoming a global brand. Our strategy is “steady advancement.”

Singapore (since 2023, 70+ stores, nearing #2 share) was our testbed. Malaysia (2025) uses regional franchises after Singapore’s company-owned success.

We’ve also entered the U.S. (5 NYC stores), though it’s early days in this mature market.

**Q:** What are key localization differences? **Li:** The U.S. poses challenges in labor, supply chain, and compliance. Some ingredients (e.g., “thick milk”) lack local suppliers. We’re learning and adapting.

**Q:** Are overseas and domestic systems the same? **Li:** Overseas, we deploy local systems for data compliance.

**Q:** How do you localize suppliers? **Li:** Sometimes, we bring Chinese suppliers abroad (e.g., for niche items). At small scales, we’ll wait before localizing.

**Luckin’s Growth Flywheel: Systems, Organization, Supply Chain** **Q:** How does Luckin adjust so swiftly (e.g., adding 8,000 stores this year)? **Li:** Operational speed stems from organizational synergy—aligned goals/values plus mechanisms embedded in operations.

For example, in 2022 (3,000+ new stores, 30% store margins), 2023’s market shift forced a choice: protect margins or chase share. We chose the latter for long-term leadership.

Surviving China’s market requires both governance and startup-like agility—Luckin’s hallmark.

**Q:** Luckin’s “big front-end, small middle-office” (2,000 HQ staff vs. 100,000+ frontline) is unusual. What does this demand? **Li:** Luckin’s digital systems create generational advantages. We’re moving traditional coffee/fast-food standardization into the digital age.

**Q:** How will the organization support 30,000–40,000+ stores? **Li:** Rapid expansion isn’t new—we doubled stores in 2023 (8,000 → 16,000). This year’s 35% growth (22,000 → 29,000) is milder.

Years of system-building, especially organizational capacity, prepare us for scaling.

**Q:** What supply chain gaps remain for future growth? **Li:** Many upstream items (e.g., agricultural products) lack mature suppliers. As we innovate and scale, we’re filling gaps.

For example, Luckin uses 70% of China’s commercial-grade coconuts. After shortages during Coconut Latte’s launch, we secured an Indonesian island for supply and are helping suppliers upgrade processing.

Equipment (e.g., espresso machines) is another niche we’re maturing, including domestic suppliers.

Global ambitions mean many areas need work.

**Q:** As the chased (not chaser), what’s Luckin’s next “game-changer”? **Li:** There’s no silver bullet. Lasting success comes from total focus, systemic strength, and no weak links.

Coffee is a complex, offline-heavy business—long chains spanning supply, product, stores, delivery, customer ops, branding, and talent. Any短板 (weak link) caps potential.

Luckin’s goal is systemic superiority—that’s our edge.