Introduction:Luckin Coffee has officially entered the Malaysian market by signing a long-term franchise agreement with Global Aroma Sdn Bhd, a subsidiary of Dazih Industrial. The company plans to open its first batch of stores in the country in the first quarter of 2025. This 10-year partnership marks not only a significant step in Luckin’s international expansion but also represents a new venture for Dazih Industrial into the food and retail sector. This article takes you behind the scenes to explore the background of the collaboration, expansion plans, and brand development strategies.
Luckin Coffee has recently secured the franchise rights to enter the Malaysian market. Contrary to earlier speculation that it would partner with the successful group BJ FOOD, the collaboration is with Global Aroma Sdn Bhd (abbreviated as GASB), a wholly-owned subsidiary of Dazih Industrial. According to the comprehensive development and operation agreement signed by both parties, GASB will develop, establish, and operate Luckin Coffee stores across Malaysia under the “Luckin Coffee” brand over the next ten years. The agreement also includes options for two consecutive five-year renewals and even an additional extension of up to one year.
The partnership is led by Dazih Industrial’s major shareholder, Prince Ming, who publicly stated that this is a well-considered strategic investment. The goal is to leverage Luckin Coffee, one of the fastest-growing coffee brands globally, to achieve comprehensive expansion in the Malaysian market and replicate its success in other regions. Luckin Coffee CEO Guo Jin Yi also emphasized that entering the Malaysian market is a significant milestone in the brand’s international development. He expressed confidence in Dazih Industrial’s capital strength and management capabilities, which he believes will help the brand quickly establish a strong presence locally.
Although earlier media reports suggested that Luckin might collaborate with BJ FOOD, the operator of Starbucks in Malaysia, leveraging its extensive experience in managing international chain restaurant brands to swiftly penetrate the market, Luckin ultimately chose to work with Dazih Industrial, which had no prior background in the food and beverage industry. Dazih Industrial is a listed company within the group, with main business areas including fertilizer manufacturing, quarrying equipment, tents, and lifting solutions. It has traditionally focused on industrial and agricultural products, and only with this collaboration with Luckin has it officially stepped into the food and retail market.
In response, the board of directors of Dazih Industrial stated that the new food and beverage business will bring diversified revenue streams to the group, helping to reduce dependence on its existing core businesses. By obtaining the authorization to open Luckin Coffee stores nationwide in Malaysia, the group hopes to capitalize on this globally recognized and rapidly growing brand to quickly expand its market footprint. Prince Ming further noted that the partnership with Luckin will not only create new growth opportunities for the group but is also expected to deliver substantial long-term returns.
It is understood that Dazih Industrial plans to launch the first batch of Luckin Coffee stores in Malaysia in the first quarter of 2025, with initial investments to be financed through a combination of internal corporate funds and bank loans. This move not only demonstrates the group’s confidence in the project but also reflects its proactive strategy for rapid brand expansion.
Notably, although Dazih Industrial had no prior experience in the food service industry, its parent company, Hextar Group, has been actively expanding across various sectors in recent years, including energy, technology, health, and consumer goods, showcasing the group’s capability in cross-industry operations. This collaboration with Luckin can also be seen as a crucial step in transforming its diverse experience into competitive strength in a new market.
For consumers, Luckin Coffee’s entry into Malaysia not only means access to familiar signature beverages locally but also the introduction of its digital ordering, self-pickup, and delivery systems, enhancing the overall customer experience. Additionally, Luckin has long been known for its high cost-performance ratio and innovative product lines. Its future product strategies and pricing in Malaysia will also become a focal point of market attention.
The above content is compiled by CoffeeHunters, a coffee news website.
