Cracking Luckin’s Growth Code: The Brand Ecosystem and User Growth Mechanisms

Business Management School, 3000 Royal Melbourne Institute of Technology University, Australia

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Abstract

The Chinese coffee market is experiencing a paradigm shift as it is no longer the Third Place luxury experience but high-frequency, functional commodity model. This paper examines the future growth and post-restructuring development of Luckin Coffee in 2021-25 when the brand established itself as a New Retail leader. The study focus is a synergistic effect of joint product introductions, tactical celebrity sponsorships, and hyper-cyclical development and research cycles. Although there was some market skepticism, Luckin has effectively built a Brand Ecosystem where digital private domains and cultural IP are used to sustain market hegemony. This background frames a critical question on the role these mechanisms play in the contemporary user acquisition and retention in an overcrowded retail environment. The study relies on the qualitative single case study approach. The results show that the success of Luckin is predetermined by a flywheel phenomenon according to which the quick innovation of products and semiotic branding transform the cultural perception into the huge volumes of transactions. Particularly, co-branding campaigns such as the Moutai Latte create a social fission, whereas KOL-KOC celebrity matrix generates trust among low-trust consumer groups. The paper concludes that the hegemony of Luckin remains due to the fact that the company has switched to being an advanced digital-first ecosystem rather than a mere vendor. Nonetheless, to guarantee the brand sustainability, the brand will have to shift to emotional loyalty based on a unique brand identity, rather than transactional loyalty based on subsidies.